Tablet prices decline 21 percent in first quarter

The average selling price of a tablet computer was $386 in the first quarter of 2012, declining 21 percent compared to a year earlier, according to a report from IMS Research.

The research firm notes that increased competition and the emergence of low-price, low-end tablets has contributed to this decline. Apple®, for one, lowered the prices of its earlier tablet models, which forced many other manufacturers to do likewise.

Meanwhile, low-end tablets have proven to be popular in emerging countries and have pulled down the devices' average selling price as a result. According to IMS, this market segment has been dominated by smaller manufacturers and vendors that are more focused on lower costs than the user experience.

Gerry Xu, market analyst and report author, explains that price has been one of the key differentiators in the tablet market, as many vendors struggle to include significant innovations in their devices. To date, Apple's $499 has been the price to beat, and few have succeeded without sacrificing functionality. However, as the competition continues to heat up, more manufacturers are likely to introduce fully functional tablets at prices that undercut the iPad®.