I think there are two Android tablet niches/markets or price points. Here is my reasoning (I hope it doesn't sound pretentious...I was taught to "lay out my assumptions"!):
$100 - $300 = Ereaders
$300 - $400 = netbooks
$400 - $500 = mainstream Android tablets???
$500 - $700 = iPad w/wifi
$700+ = notebooks
(a) Ereaders. The new price-point (e.g., Amazon's move on the Kindle yesterday) looks like sub$200. More expensive models have optional features, e.g., color, touch screen, 3G, etc.
(b) Netbooks. In functionality, a netbook and an iPad are pretty comparable. The rationale that puts the iPad at a higher price point is probably based on the Apple "ooh" factor plus the capacitive touch screen. It's very hard to find a reliable netbook (e.g., EEEPC, HP, Dell) under $300 (though refurbs can be found for $200), so I guess this is an industry-imposed floor on pricing.
(c) iPad. What can I say? Gorgeous device, great software. Personally I'm not interested in owning one, but let's see if it transforms the playing field like the iPhone has.
(d) Notebooks. $700 is a pretty arbitrary line for a notebook. For example, I own an Asus thin-and-light that just squeezed under that price point. There are lots of machines out by HP, Toshiba, even Lenovo with dual-cores, HD displays, wireless 11n...pretty good specs for $500-$700. But you probably need to move toward $1000 if you want a machine with decent (a) portability (<4 lbs), (b) battery life (>8 hours), or gaming potential.
OK, so now my prediction: I'm looking into my crystal ball, and what I see is HP, Microsoft, Dell, and others pricing their entry-level tablets at $399. Specs should come close to an iPad, if not slightly better (e.g., dual-core ULV processor).
What about the $100-$300 price point? Right now, there are several Chinese-made Android tablets that come in just under $200 (check Amazon). While I can't disparage an entire nation, I will say I am pretty wary of these machines, esp. the chances of firmware updates, build quality, customer support, and whether they even have the guts to run Android 2.0.
Where does that leave us? I see two options. First, we wait until Q4 to see what the Android tablet market looks like. As I already predicted, I think those machines will come from mainstream U.S. manufacturers (e.g., HP), perform well, and run around $400.
The only other option afaik is the $100-$200 price point, which leaves the Pandigital and the Augen. And since I've already made the case for the Pandigital, I won't rehash the comparison. Remember, the Pandigital is not a dedicated EReader--it's an Android tablet with a built-in UI that emphasizes ebooks. It's not hard to mod it into something generic. The bottom line is....for about $150, you get what you pay for: a low-end machine with pretty weak hardware, that's able to run Android 2.0. If I wanted something with better specs or reliability, I'd expect to dish out another few $100.
-Matt
