Carriers Slash Galaxy Tab Prices, But the Buzz on iPad 2 Is Already Loud

Last Updated Jan 18, 2011 3:17 PM EST

Verizon (V) and Sprint have slashed prices on the Samsung Galaxy Tab as they enter the inevitable price war that will help determine how long Apple's (APPL) iPad can dominate the tablet market, and which competitors can take the biggest shares of a burgeoning market.

But if a lower price was the right move, the timing is way off. The company should have set a lower price on the well-designed tablet, one of several built on Google (GOOG)'s Android platform, in the first place. Demand for the impressive tablet is already withering under the buzz surrounding iPad 2, even though its debut is at least 2 months away.

It's clear that the wireless carriers providing 3G service for the Galaxy Tab have wised up. Verizon now offers the no-contract Tab for $499 (from $599) ; Sprint offers it for $299 (from $399) with a two-year commitment. But these moves are too late to really affect the market.

A galaxy of missteps
The Samsung Galaxy Tab launched last November at $599. Not only was it one hundred dollars more expensive than the $499 iPad, but the product was only half the size. Apple had already set a high bar and established a big lead, with sales of several million iPads since its debut about six months before, in April 2010.

The decision to cut the price on the Galaxy now is, ironically, similar to Apple's decision to lower the iPhone's cost by $100 just a few weeks after its launch. But there are big differences. Apple handed out $100 vouchers to make peace with bitter early adopters; Samsung and its affiliates show no signs of doing the same. Second, the so-called Jesus phone had the market to itself for a while. Now every tech company seems to be getting involved in the Android tablet market in some form. The only leverage Samsung had was price, and it missed the moment to use it.
All eyes on the iPad 2
And then there's the impending iPad 2. The recent Consumer Electronics Show was bursting at the seams with iPad 2 peripherals, even though neither Steve Jobs nor his lieutenants were at the expo and there has been no public statement confirming the existence of iPad 2. Apple adheres to an annual schedule, which means the new iPad will probably be announced next month and released in late March or early April.

Despite the strategic mistakes, the Samsung Galaxy Tab already moved an impressive million units, a testament to its nice design and availability across all four major wireless carriers.

But the iPad 2 was just a speck on the horizon when the Tab launched. Now it's very real to consumers and critics, and competitors will have an increasingly hard time capturing anyone's attention for the six months or so that the iPad 2 will be center stage.

The Galaxy may be a great product and an inspiration to other, wiser companies. But Samsung and its carriers shouldn't count on the price cut making a difference this late in the game.

Photo courtesy of sdsessums // CC 2.0

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