I think the products that compete with iphones and ipads point to a fundamental shift in how Apple do things these days: Apple now compete on price.
I'm not saying they've given up on their high margins on everything policy. Like other commenters have said, they probably use purchasing power to make up the difference, but they are using price nonetheless.
We're so used to Apple being the premium option that we keep on being surprised that they aren't being beaten on price and then assume it's temporary. Well, it's several years into iphone and they aren't the macbooks off mobile phones yet. You actually need to pay for a non Apple alternative.
They still feel like the premium option though so it seems just silly to pay a $100 premium for the non-apple alternative, like paying a premium for an ipod knock-off.
It's quite a strategy. Build a company around products need to command a premium. Then remove the constraint. It's like having a runner run with stones in his pocket all his life then suddenly remove them.
I think what we're seeing is that Apple always did compete on price. We just didn't know it until we saw competitors trying and failing to match their prices.
I'm not a hardware expert, but I don't think so. There are two ways to think about this:
a- What would it cost to build a more or less exact hardware replica?
b- What would it cost to build a decent substitute?
I don't even think they were competing on price in the 'a' sense.
But either way, 'b,' is, I think, the important one and Apple certainly weren't competing on price in that sense pre-iphone. You could always get a decent mp3 player or laptop roughly as good as but different to an Apple for a big discount. Still can. If you want to run Windows or Linux, you can do it without hassle on 1/2 - 3/4 of the budget. If you want a music player for jogging, an ipod nano knockoff will do the trick just fine.
If you want an android tablet or phone, you seem to need to pay more for (arguably) less.
You can get Tegra2 tablets running Android for half the price of the cheapest iPad for roughly the same techie mucking around effort as putting Linux on a netbook right now.
I personally wouldn't buy one till it was confirmed you'd be able to get Honeycomb on it, but they've been out there for a few months now, mostly held back by Google's lack of approval for shipping with the Android Market unless you're selling a phone. I believe that policy's about to change though.
To amplify this point, remember that when the iPod was first released, it was relatively expensive at $399 for the 5 GB model. Today they have entries at every price point, starting from the $49 iPod Shuffle up to the $399 64 GB iPod Touch.
I'm not saying they've given up on their high margins on everything policy. Like other commenters have said, they probably use purchasing power to make up the difference, but they are using price nonetheless.
We're so used to Apple being the premium option that we keep on being surprised that they aren't being beaten on price and then assume it's temporary. Well, it's several years into iphone and they aren't the macbooks off mobile phones yet. You actually need to pay for a non Apple alternative.
They still feel like the premium option though so it seems just silly to pay a $100 premium for the non-apple alternative, like paying a premium for an ipod knock-off.
It's quite a strategy. Build a company around products need to command a premium. Then remove the constraint. It's like having a runner run with stones in his pocket all his life then suddenly remove them.