Report: Tablet vendors to cut prices to trim inventory

Knocked by sluggish sales, non-iPad tablet makers are expected to cut prices to try to get rid of excess inventory, according to a DigiTimes report.

Non-iPad tablet vendors may start cutting prices in September in an attempt to reduce their overstock inventory, according to a story today from DigiTimes.

Demand for the iPad may force rival tablet makers to reduce prices to shrink unsold inventory.
Demand for the iPad may force rival tablet makers to reduce prices to shrink unsold inventory. Apple

Hurt by the popularity of the iPad, rival tablet makers have witnessed sales weaker than expected amid falling demand from retailers, resulting in a lot of unsold inventory. As a result, these companies will cut tablet prices once around the end of next month and again toward the holiday season, according to the DigiTimes report, citing "sources from notebook players."

The cuts could shrink the price of the average tablet to $350 and then again to $300 before the year is over, benefiting consumers and igniting a price war in the industry.

Most rival iPad makers have been hurt by demand for Apple's tablet. Even Asustek, which DigiTimes pointed to as one of the few with a better performance, shipped 700,000 tablets from May to July but sold only 500,000 of them. In June, Asustek CEO Jerry Shen boasted that he would outship all other tablet makers that month, with the exception of Apple.

Samsung and Motorola have both seen weak tablet sales, while Research In Motion and HTC are looking for better results next year, DigiTimes added.

Hewlett-Packard last week slashed the price of its TouchPad by $100 to $399, while earlier in the month, Acer trimmed the price of its low-end Iconia Tablet to $395 from $449. In July, Motorola chopped the price of its Wi-Fi-only Xoom to $499 from $599.

Regardless of whether the recent cuts trigger a price war, one analyst sees price drops as inevitable, as tablet makers struggle to scoop up any customers left over from Apple.

"You know this was eventually going to happen because there are so many players entering the market at the same time," according to DisplaySearch analyst Richard Shim . "And it's the same market opportunity. That is, whatever remains in the market after Apple takes its share. And price is the only advantage these other players have early on."

 

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