Because hardware companies like Dell, HP, and Acer have so few advantages over companies that offer content as well, DigiTimes reports that they may be getting out of the tablet game entirely next year.
Content companies like Amazon or Barnes & Noble can subsidise their tablets like crazy — they’ll make their money back after the fact as customers buy content to make the tablets more useful.
Consider the $200 Kindle Fire — Amazon has no problem selling it at a loss because it can pull itself back into the green with e-book sales.
This will essentially turn the tablet market into a game of chicken to see who can price their tablet the lowest. DigiTimes’ sources believe that all the hardware will eventually be free.
Selling tablets at full price without a content platform to continue profiting from, the HPs and Acers of the world will be forced to make their exit.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.