US$2000 tablet a perfect fit for Apple, says analyst

Reports of an OLED-based tablet in 2010 fit pattern of high-profit luxury tech

Reports that Apple will produce a $2,000 tablet next year fit the company's historical pattern of going for the luxury end of the technology market, an analyst agreed today.

According to reports from Asian component makers, Apple will push back the release of its long-rumored tablet into the second half of the year, in part because it plans to introduce a 9.7-in. model featuring an OLED (organic light emitting diode) display, Taiwan-based DigiTimes said today.

Component manufacturers in Taiwan and China told the publication that Apple will launch a pair of tablets in the latter half of 2010, one sporting a 10.6-in. TFT-based display, the second a smaller OLED screen.

Previously, talk about Apple and a tablet had centered around a ship date in the first half of next year, perhaps as early as February 2010 . Apple would probably use an iPhone-esque two-stage launch that pre-announced the hardware, a strategy that would give developers time to create applications or tweak existing iPhone software, said analysts. The retail price most often bandied was somewhere between the $200 of the iPhone and iPod touch, and the $1,000 of Apple's lowest-priced MacBook notebook, with an in-between price of $800 favored by many.

Ezra Gottheil, an analyst with Technology Business Research, admitted he's as uncertain as anyone about the validity of the DigiTimes report, but said both the delay and a high-priced model made sense, given Apple's history.

"I don't think a delay would cost them much," Gottheil said today. "It's not like someone else is stepping in and snarfing up the tablet market. And a delay fits a life-long pattern for the company, which likes to wait to get things right."

So it goes with the talk of an OLED-based tablet, which DigiTimes ' sources estimated would cost Apple between $1,200 and $1,700 to make, with about a third of that going toward the 9.7-in. OLED screen. Those costs would put the retail price of the device at around $2,000, although by partnering with wireless carriers -- which would bundle the tablet with long-term data plans, as they do currently with the iPhone -- Apple could reduce consumer up-front costs somewhat.

"Apple doing a luxury, top-end tablet is quite reasonable," said Gottheil. "They've done that many times before."

In mid-2007, when Apple launched the original iPhone, it priced the smartphone at $599 , significantly above rivals' devices and triple what it now charges for its iPhone 3GS when customers sign up for a two-year data plan.

"Coming up with a high-margin, high-priced tablet is something that Apple would love to do," Gottheil opined. "The quad-core iMacs, for example, have put a terrible hurt on the Mac Pro, just as the lower-end MacBook Pros have on the 17-in. MacBook Pro. Those moves have significantly reduced the sales of their top-end hardware."

That's one reason why a $2,000 tablet, with a correspondingly high margin, has to look attractive to Cupertino, Gottheil added.

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Gregg Keizer

Gregg Keizer

Computerworld (US)
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