When Samsung Electronics unveiled its Galaxy Tab in the U.S. in November of last year, Apple held 95 percent of the U.S. market for tablet PCs with its iPad. Verizon and other telecoms that had been worried about Apple's monopoly welcomed the Galaxy Tab, but so far it has made no great inroads. Samsung supplied about 1 million Galaxy Tabs to Verizon and T-Mobile, but Verizon has not earned much from selling them.

It has been about a year since the iPad was unveiled in April 2010. Samsung entered the race in October, and now details of the competitive landscape are emerging. Apple sold 14 million iPads and unveiled the iPad 2 last Wednesday. Samsung sold 2.5 million Galaxy Tabs, just one-sixth of Apple's sales.

◆ Apple Continues Dominance

The New York Times on Sunday said no competitor is able to match the iPad for price. The cheapest among the six models costs US$499, compared to the Galaxy Tab's $599.

Apple has traditionally manufactured cutting-edge products at lower prices by simplifying the range of models, which allows it to order components in bulk to keep production costs down. Apple then markets its products through a wide range of outlets, including telecoms, electronic appliance shops and shopping websites as well as directly-operated Apple stores, which make fat profits since no money is lost on middlemen. 

According to market research firm iSuppli, $229.35 worth of components go into a single iPad 16G. Techrepublic, an on-line publication for IT professionals, said the retail price is $499, which means more than half of the sales at Apple's own stores translate into profits.

◆ Samsung Hopes to Catch Up

Rivals like Samsung are still having a tough time catching up with Apple and have weak market power. They usually sell their products to U.S. telecoms for half market price. This is why it is difficult for Samsung to make the amount of profits that Apple does.

"We are having a tough time gauging sales volume," said one industry source. "When we say that 2.5 million Galaxy Tabs were sold, that is based on the number of products supplied to telecoms, and it's difficult to determine exactly how many units were actually sold to consumers." Industry insiders here estimate that around 200,000 of every 500,000 Galaxy Tabs in the Korean market end up gathering dust in inventory.  

But Samsung plans to continue with its strategy of encircling Apple by launching a range of tablet PCs to meet the various needs of customers. A key example is the Galaxy Tab with a bigger 10.1-inch display set for release in the first half of this year. Shin Jong-kyun, head of the company's mobile business, said the company aims to sell 7.5 million tablet PCs this year featuring a wide range of screen options.