IPad Pushing Tablets PC To $299

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Since its April release, Apples iPad has been delighting customers-and wreaking havoc on its competitors. The sleek tablets threat is widely believed to have pushed e-reader makers to slash prices twice already-in May and then again in July.

The iPads effect on the netbook and tablet computer market is less clear. Recently, I asked whether the just-released gadget was knocking down netbook prices, noting that Amazon data appeared to point to some early disruption. I have been tracking Amazon prices since then, however, and have not identified a distinct trend.

Now an analysts report indicates that the iPad is indeed squeezing other tablet manufacturers. In an Aug. 10 research note about Intel, Barclays Capitals Tim Luke says the iPads momentum has pushed rival PC suppliers to release their ARM, Atom and Android-based alternatives in the first quarter of 2011-perhaps later than planned. Some of these companies have shifted their focus to the Chinese market because Apples dominant position in content is less pronounced there, writes Luke. And several manufacturers appear to be targeting a price of $299, particularly for tablets running Android.

That is a pretty low price for a computer, even one based on a free, open-source operating system. In comparison, the iPad sells for $499 to $829, depending on the amount of memory and bundled wireless service.

Back in May, chipmaker Freescale said that a number of tablets would be delayed until January 2011. Lukes report seems to back up that assertion.

A strategy shift affects not just the tablet manufacturer, but also the various component makers, software suppliers and retailers that contribute to the tablets packaging, assembly and sale. Given the potentially wide reverberations, this will be an interesting trend to watch over the next six months.