Why Is Samsung's New Tablet So Expensive?

Steve Kovach/Business Insider

Today Samsung unveiled the final details for its newest tablet, the Galaxy Note 8.0. (Read the full review here). 

The 8-inch Android tablet was designed to compete with Apple's iPad Mini. But at $399.99, the Galaxy Note 8.0 costs $70 more.

Why?

Samsung's argument is that hardware extras like the stylus and infrared blaster make it more expensive to make.

Here's Samsung's Philip Berne responding to the Galaxy Note 8.0 pricing criticism on Twitter:

@rogerwcheng HD display. Wacom digitizer. IR blaster. Hardware costs money, y'know. You get more with the Note 8.0.

— Philip Berne (@philipberne) April 9, 2013

It's a decent point, but there's another piece to the puzzle.

Samsung makes a lot of different tablets. The Galaxy Note 8.0 and its big brother the Galaxy Note 10.1 just happen to be the company's top-tier devices. There's also Samsung's Galaxy Tab line of tablets. The Galaxy Tabs have weaker hardware specs and fewer software features than the Note tablets. 

But those are the tablets that Samsung prices to compete with the iPad Mini and Google's Nexus 7 tablet. The 7-inch Galaxy Tab 2 starts at $199.99 and the 10-inch model starts at $349.99 (those are the suggested retail prices). It's also been reported that the Galaxy Tab line will get an update later this year. 

So there are really two tiers for Samsung's tablets: the top-of-the-line Notes and the budget-friendly Galaxy Tabs. 

However, that's part of Samsung's tablet problem. It's confusing to offer so many similar-but-different devices at a bunch of price points, especially now that the company is trying to create a worthwhile competitor to the iPad Mini. It's also a tough sell to convince people a pen and an infrared blaster are worth that extra $70 (if you're considering the iPad Mini) or $200 (if you're considering the Google Nexus 7). Pricing is just as important as a bunch of extra hardware features and doodads.



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