Citing economic theories, Deustche Bank analyst Chris Whitmore answers no, saying that competitors can’t come close to Apple’s tablet experience, but we’ll let you decide for yourself. According to Whitmore, Apple’s first to market gives it a competitive advantage over competitors from Android and others. With its prior experience in developing iOS for the iPhone, the iPad’s iOS operating system gives Apple an advantage in usability, which Whitmore thinks Apple’s rivals will “fall flat from a user experience standpoint while struggling to materially undercut the iPad on price.”
Additionally, when it comes to pricing, Whitmore cites the economy of scale model for Apple’s aggressive price point with the iPad. While traditionally known for charging users a premium for strong industrial design and its tight hardware-software integration within the Apple ecosystem, the Cupertino, California company has kept the iPad’s price low, and there are several reasons why the company has been able to do this.
First, in terms of NAND storage, Apple is the largest consumer of memory chips, buying large amounts of flash memory for its iPod, iPhone, and iPad products. When negotiating price, Apple can leverage its buying power here.
Because Apple is leveraging its iPod and iPhone buying power in the tablet market, the traditional PC vendors will not have the same buying power and scale advantages enjoyed in the traditional notebook market…. Apple is the world’s largest buyer of FLASH by a wide margin. We estimate Apple buys about 20-25% of the world’s FLASH due to its large iPhone and iPod FLASH needs
The second advantage Apple has, according to Whitmore, is that the company was an early adopter in capacitive touchscreen technologies. Again, with touchscreens, Apple does have buying power as it purchases large number of glass displays for its portables (MacBooks, MacBook Pros), as well as iPod, iPhone, and iPad products, giving it a scale advantage over rivals who are just entering the tablet arena.
Finally, due to its early investment in capacitive touch technology and lead in selling touch devices, it’s difficult to believe any vendor buys more square footage of capacitive touch technology than Apple.
Some of Whitman’s arguments in All Things D may have merit as the rival Android-based Galaxy Tab tablet from Samsung is rumored to cost more than the iPad. However, Whitman’s comment about usability is subjective.