Amazon's Tablet vs. iPad (What Consumers Want) - Slide 2

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Every time Retrevo asks consumers what would get them to buy a tablet, low price comes out on top of the list. In the most recent study, almost half (48 percent) of respondents said that $300 was the price point that would get them to consider an Android tablet over an iPad. Apple has traditionally been able to command a price premium for quality devices, but if someone like Amazon who thrives on low margins can move the playing field, Apple may find it harder to command high prices. Despite the fact that Apple makes a lot of money on companion products like apps, music, and software, Amazon may be in a better position to sacrifice a high profit margin on a tablet or razor in return for revenue from razor blades like books, music, videos and apps. There's even an Amazon App Store whose name Apple was recently unable to legally block them from using.

If Amazon does, in fact, enter the tablet market with a low cost Android tablet this fall, they might be able to change the playing field to a lower margin one where Apple would be less able to compete. Could a low cost Amazon Android tablet present one of the first serious contenders to the iPad? Based on the latest Retrevo Pulse Report, it appears that consumers are ready to buy a low cost tablet and are very keen on one from Amazon.

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