7 inch tablet: $200 or less.One of these four does not look like the others. The smartphone price is so much higher in relation to the basic hardware content. You can buy a Nexus 7 tablet and a Google (GOOG - Get Report) laptop for $400 combined, or 35% less than a single iPhone 5! It makes absolutely no sense. Then add the fact that all the Microsoft (MSFT - Get Report) PC licensees are feeling the heat from a failing Windows ecosystem, and are seeking new revenue opportunities. Microsoft is making its own PC now -- the Surface -- and perhaps soon its own smartphone. If you are Acer, Asus and Lenovo, just to mention a few obvious ones, why not focus more on Android smartphones as you did on Windows PCs? Yes, it was hard until now because keeping up with the spec war was difficult, with Apple (AAPL), Samsung, HTC and a few of others such as Nokia (NOK - Get Report), RIM (RIMM) and Sony (SNE) duking it out for the high end in a fast-moving spec race. But if the race is now reaching something of a plateau? Then the game changes. The hardware race to radically cut the relative high-end smartphone price will be mated by a reduction in service cost. Why and how? There are two reasons: 1. At some point, the hardware becomes so relatively cheap -- unsubsidized high-end Android smartphones probably approaching $199 a year from now -- when subsidies won't seem as attractive anymore.
10 inch tablet: $400 or less.
Laptop: As low as $200.
High-end smartphone: $350 to $650 (unsubsidized)
Next Smartphone Revolution Will Be Price
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