The most surprising part of the iPad launch was the price. People expected a 10" (okay, 9.7") Apple tablet to be extremely expensive. In fact, Asus and MSI planned their whole tablet release pricing strategies based around the idea of an expensive Apple tablet. Digitimes reports that their original plan was to launch comparable tablets priced 20%-30% below the iPad.
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Since the iPad proved to have a reasonable pricing structure, competitors are being forced to re-evaluate their pricing strategies. Unfortunately, it's proving difficult to launch a solid tablet PC for less than $499. Vendors are starting to worry that they may kill the nascent device category's profitability if they slash prices to a competitive level.
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MSI and Asus (and any other tablet manufacturers) are going to have to find a way to compete with Apple other than lower prices. Fortunately, this should be fairly easy with the iPad. They just need to launch more capable, more open devices for the same/slightly lower price points than the iPad. If MSI launches a 10", multi-tasking capable tablet with a camera and 3G for $500, they'll be leaps ahead of the $600+ 3G packing iPads.