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June 28, 2012

The Making of the Tablet Economy: How Big is the Market

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With the Launch of Google’s official Tablet , Nexus ,the question that is doing the round across the tech industry is   “ does the Tablet market big enough “ for everyone  to have some share of the pie ..  or this is another consumer electronics bubble in making .

Google tablet market foray  has no doubt raised the stakes for everyone.. and  as its just a matter of time before Tablets replace PC as the computing device of choice .However the truth is that Not everyone is making money by selling tablets .It’s not lost on Google that Amazon’s $199 Kindle Fire was the only slate to grab a sizeable chunk of the market beyond Apple’s iPad last year.

But the price at which Amazon kindle’s were sold barely covered the cost of manufacturing.. and the situation is unlikely to change soon

With Apple winning the high-end tablet wars, Google and Amazon and now Microsoft  are left to fight over the low end of the market.

When a Google-branded tablet finally launches — likely in the third quarter — it will have to be heavily subsidized to carry a $150 price tag, analysts said.“It will cost more to build than it will sell for, which means Google will pay a heavy subsidy for its tablet,” said analyst Tony Berkman of ITG Research. “There is no choice but to do that, if Google wants to compete.”

Yesterday, reports out of China suggested Amazon also was working on next-generation  Kindle Fire tablets and will continue to undersell the iPad at $200.