Why is the Padfone Infinity hybrid so much more expensive than the Fonepad phone/tab combo?

This year’s MWC is set to go on for a couple more days, so there are still plenty of exciting things to happen, but so far Asus has stolen the Barcelona show. The Taiwanese have been in the spotlight not just with crafty marketing and wacky presentations, but quite simply with the most attractive new gadgets – the Padfone Infinity and Fonepad.

And yet we don’t really expect the two to become mainstream hits. The Padfone Infinity because of its premium pricing and likely limited availability and the Fonepad mostly due to its wackiness. And, in some part, also due to pricing.
I know what you’re going to say. How the heck is the Fonepad too expensive at $249 when it can act both as a regular tablet and a super-sized phone? Simple – because it is pricey compared with the tab competition (the $200 Nexus 7, first and foremost), while its usability as a smartphone is close to zero.
But the unveiling of the Fonepad has also called Padfone’s luxurious pricing into question. After all, if a 7-inch phone can be sold for $249, why couldn’t a 5-incher that can turn into a 10-inch tab go for $400 or $500 instead of over 1,000 bucks? And taking things further, why can’t smartphones in general cost less off-contract?

The answers are again very simple and come straight from Asus. On one hand, small devices need more “engineering, development, and testing required to shrink down the components without affecting the heating, for example, and still offering the best performance.”
Second and equally as important, it’s a matter of the “bill of materials”. As much as we’d like to think otherwise, the Fonepad, like most other “affordable” 7-inch tablets, can’t compare with high-end phones in terms of performance.
Whereas the Padfone Infinity makes no compromises and packs a state-of-the-art Full HD screen and a Qualcomm 600 CPU among others, the Fonepad cuts a few corners with a 1,280 x 800 pix res panel and a single-core Intel Atom processor.
Everything about high-end phones has to be cutting edge, “the best ID, best feature spec, the latest and greatest of every component”, while many tabs just have to “deliver an optimal experience at an affordable price”.

Everything sounds legit so far, but that huge pricing gap is still not fully accounted for. Which brings us to one explanation Jonahan Santaub, regional director at Asus, may have forgot to offer Cnet, but that we know is true and valid – supply and demand.
2012 saw both smartphone and tablet shipments rise, but the gap remained huge – there were 722 million handhelds sold and only 128 million tabs. Also, a big chunk of the slate pie went to Apple, so there wasn’t much left for Android.
That said, you obviously need to sacrifice your winning margins in the tab market in order to gain traction, whereas when it comes to smartphones you have a lot more room to push both the performance and pricing boundaries.
And that, my friends, is how the cookie crumbles.

SOURCES Cnet

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