Here comes the Android tablet price plunge

April 8, 2011: 10:13 AM ET

Acer's Iconia tablet looks as good as the XOOM on paper and is up for pre-order for $450.

Iconia A500 via Acer

If you've ever played with an Acer netbook, you'll know the computer maker isn't adept at turning out high end products.  But the Taiwanese company makes a good mid-range product, and they do it with razor-thin margins.  This strategy is part of the reason they canned their CEO Gianfranco Lanci last week, saying they wanted to be more like HTC and Apple (AAPL) rather than HP(HPQ).

But small margins allow Acer to bring to market a tablet that has most of the same components as the $600 Motorola (MMI) XOOM, including Nvidia Tegra 2 processor, 1280x800 display, 5 megapixel/2 megapixel cameras, USB2 and SD card storage expansion a $150 discount.

On paper, this product is much better value than Motorola's offering, which some analysts estimate only sold 100,000 units as of April 1st.

Obviously, most tablet consumers will opt to pay $50 more and get the base model iPad instead.

However, the price war has just begun.  Acer products at Best Buy don't tend to hold their prices well and look for this device to head toward the $399 range pretty quickly.  Once the difference in price between iPad and Android is $100-$200, I'd expect more and more people to opt for Android –which is good for Google (GOOG).

The Iconia A500 Tab is available for pre-order at Best Buy for $450 and will take delivery on April 24th.  I wouldn't expect any lines.

Netbook News fittingly has an unboxing of the Iconia A500 at a Burger King:

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Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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