The Galaxy Tab is set to be released next week, but it appears that Samsung has put itself at a disadvantage against the iPad that will be difficult to overcome.
When Samsung's tablet arrives, it will have to make a very compelling case against the iPad to compete. Today we learned that the Galaxy will not cost $199 with a long-term contract, but $399. That fact alone swings the pendulum back to Apple's (Nasdaq: AAPL ) favor and may make the Galaxy Tab a tough sale.
Samsung had planned to be aggressive in its pricing against the iPad. That shouldn't be a problem, since Samsung manufactures virtually all of the Galaxy Tab's expensive and critical components. However, new reports suggest that the tablet will actually be more expensive than the iPad in Europe. Without subscriptions, prices in Europe will vary between $900 and $1,100. The iPad, meanwhile, sells for $695 in Europe.
It appears that the Galaxy Tab will also offer less consumer choice and require a two-year contract. With the iPad, consumers can choose whether they want to pay for 3G service. Rumors suggest that only a portion of iPad buyers want 3G anyway. If so, that could be a rather bad sign for the Galaxy Tab, especially if it's going to cost $399.
The release of the Galaxy Tab will be a critical indicator for the value of iPad rivals and the Google (Nasdaq: GOOG ) Android ecosystem. The Samsung device will have to provide many more features and much more tangible value than the iPad offers, given the perceived value of the status that the iPad provides. We're unsure whether the Galaxy can meet the challenge. At $199, the Galaxy Tab sounds like a good value, but at $399 many people are likely to consider going with an iPad that costs $100 more but offers the flexibility of Wi-Fi and/or 3G, different configurations, and an App Store that has now close to 275,000 applications.
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