Padfone: Two for the Price of One?

After more than one year after Apple Inc launched the iPad, manufacturers are still announcing new launches of their own iPad killers, as seen on the first day of Computex, held in Taipei, Taiwan which started on May 31, 2011.

Taiwan-based AsusTek Computer Inc, who singled handedly created the netbook category in 2007, showed off an insipidly named tablet phone, Padfone. The Padfone is an Android smartphone that comes with a dockable 10” screen, which converts the smartphone into a tablet. The concept draws some parallel to a tablet launched by Asus early this year, the Transformer. The Transformer tablet also offers consumers a dockable keyboard, which transform the tablet into a netbook.

The immediate challenge for Asus is the product positioning for its Padfone. Apple Inc’s iPhone 4 is priced at US$199 with contract while the iPad retails at an unsubsidized price of US$629 in the US. Marketing the Padfone to smartphone users necessitates a low price point and potentially negative profit margin. The bill-of-material (BOM) of the Padfone would definitely be higher than the iPad and unfortunately, Asus does not command the same brand index as Apple.

If Asus can work out a suitable pricing strategy with the network operators, the value offering of a smartphone and a tablet for the price of one product will draw its own appreciative niche audience. Failing which, the harsh reality that awaits the Padfone is defeat, at the hands of iPad.

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