China-based PC-maker Lenovo is heading for the tablet market with big dreams of doing what no other tablet maker has done so far; take the lead from Apple’s iPad.
Lenovo has been picking up steam in the PC market, out-pacing Acer as the third-largest manufacturer of desktop personal computers.
According to FT, Lenovo’s chief executive, Yang Yuanquing, has stated that the company, “[W]ill be one of the strongest in this area.” Just how they plan on closing the market share gap with Apple is a mystery, but reduced price tablets are on their minds.
Lenovo’s strategy will be to offer a multitude of tablets for every income bracket, including low-priced ones for low-income segments of the population. Currently, the company offers an attractive looking tablet Called IdeaPad Tablet K1 for $499. Tomorrow, Lenovo will release the ThinkPad tablet for $20 less. If the company thinks that a 4 percent price reduction is enough to attract bargain shoppers, they will be disappointed.
Evidence of the public’s desire to have top-quality tablets at rock-bottom prices can be seen with HP’s recent fire sale. The company liquidated approximately a half million tablets by dropping the price of their 16 and 32 GB TouchPads to $99 and $149 respectively. People don’t want a slightly less expensive tablet. Most will just opt to save their pennies and go for the iPad. What they will scramble to retail stores for is something that tablet makers just can’t produce with the cost of technology at its current rate.
Lenovo has the right idea, offer a low-priced tablet that a broader consumer base can afford and is willing to pay, but minimal price reductions are not enough. Tablet makers have to tighten the belt and take big profit hits if they want to make headway against Apple’s hold on the market.