iPad 2 Day, Price Wars and Tablet Mania

Unless you're just getting back from your trip to the outer reaches of the galaxy, you know that Apple is set to reveal its highly anticipated iPad 2 today around 1pm Eastern. Thinner, faster and with a better speaker and cameras, the new device is an interim upgrade for the highly popular tablet.

Those improvements bring it to feature parity with some of the newest Android tablets like the Motorola Xoom, which at present appears to be the "flagship." LG, RIM, Samsung, HTC, HP, and others all announced and are soon releasing competitive tablets, most based on Android; however WebOS in the case of HP-Palm and QNX in the case of RIM. (RIM will run Android apps as a way to stay relevant given the limitations of its own "App World.")

The Xoom has been reasonably well reviewed but, despite many of its superior features, (vs. "iPad Classic") has not been pronounced superior overall. Part of the problem with Xoom is its $799 price (lower with carrier subsidy). Most of the tablets now coming out are trying to match similarly equipped iPad pricing. But Xoom has made a serious pricing error and will see lost sales as a result.

Motorola Mobility CEO Sanjay Jha said that Xoom sales have gone "relatively well" (read: disappointing). However if iPad 2 matches its features, as expected, you can expect that any sales momentum that Xoom has to abruptly end -- unless Motorola cuts prices. 

Only a small number of "high-end" Android tablets will exist by the end of this year. The market will support several winners but not a dozen. The iPad will likely capture much of the high end of the market as Apple has historically with Macs. There may be several viable tablets at the sub-$300 price range that can survive on price competition alone. It will be interesting to see if "good enough" Android tablets at the low end put pressure on the higher end Android tablets to cut prices themselves. 

We'll see what Apple shows up with later today and how it's priced.

Apple surprised everyone when the original iPad was introduced with a WiFi-only "entry level" version for $499. That pricing helped propel interest in the iPad and generate over 15 million unit sales to date (we'll hear an update on those numbers today I'm sure).