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Prices of digital tablets likely to drop

Jan. 6, 2012 at 1:23 PM
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NEW YORK, Jan. 6 (UPI) -- U.S. consumers are finding the price of digital tablets dropping sharply, a trend that could continue, market analysts say.

"If you have an uncompetitive product, you're going to have to take it and move the inventory. And one way to do that is to lower price," said Avi Greengart, an industry analyst at Current Analysis.

Greengart said RIM lowered its prices -- down to $299 for the 64-gigabyte BlackBerry PlayBook -- because the firm was planning to exit the market.

Prices will also come down as software upgrades become available and because prices for electronic devices trend downward as production costs per unit drop when demand picks up, USA Today reported Friday.

In effect, said Roger Entner of Recon Analytics, some tablet makers have been overcharging.

"BlackBerry and Sony have cut their price point from ridiculous to mildly amusing," he said.

While Apple has a huge advantage in costs per unit because of the popularity of the iPad, Amazon's Kindle Fire and Barnes & Noble's Nook Tablet, which sell for $199 and $249, respectively, have a different advantage.

They can be sold below cost because they spur sales of other items, such as movies and books, the newspaper said.

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