Tech watchers expect Google to roll out an entry-level handheld device this year that could sell for as little as $150.
With Apple winning the high-end tablet wars, Google and Amazon are left to fight over the low end of the market.
When a Google-branded tablet finally launches — likely in the third quarter — it will have to be heavily subsidized to carry a $150 price tag, analysts said.
“It will cost more to build than it will sell for, which means Google will pay a heavy subsidy for its tablet,” said analyst Tony Berkman of ITG Research. “There is no choice but to do that, if Google wants to compete.”
Analysts expect the Google tablet will be made by Asus, the Taiwan-based company that already makes the Android-powered Transformer Prime. The Google tablet would likely carry the Nexus name, which it also uses for it proprietary smartphones.
Yesterday, reports out of China suggested Amazon also was working on next-generation Kindle Fire tablets and will continue to undersell the iPad at $200.
Apple’s iPad starts at $499, and the company sells as many as it can build, giving credence to CEO Tim Cook’s claims that his company has been unaffected by inexpensive rivals.
Still, Apple has a cheaper model of its own, the old iPad 2, which it now sells starting at $399, since the new iPad hit shelves earlier this month.
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