Low priced tablets will cause some problems to supply chains, as the pressure increases and so does the number of units that need to be shipped. Prices keep dropping, so part suppliers also drop their prices, but who will make profit if this goes on? Tablet PC vendors are competing against each other and pulling the prices down, for whole units and parts too.
7 inch products are predicted to be the most popular items in the second half of the year, with emerging countries preferring them thanks to the lower pricing. Slate vendors insist on getting the cheaper components or the best parts at the best prices, thus making life harder for component makers. It’s an interesting situation: part makers fear getting into the cheap tablet biz, but they also fear missing out on the opportunity. It’s a big gamble, but if millions of units are sold, you stand to make a profit.
Then again, it takes one faulty chip to take it all back to the drawing board and profits can dip at any time. However, chip makers, for example can take their business to multiple companies, but there’s only a few names that supply the tablet makers with components, so it’s easy to be the one handling minor hardware, than the one that assembles all of it and sales it, hoping for profit.