Hardware Based to Software Based Tablets

I was just reading an article which ironically was a required reading for the class I am writing blog posts for; Commerce 296. The article mentioned how the Nexus tablets and Amazon tablets are being sold at a price where they are just breakeven with the costs, whereas, the iPad Mini is well above the cost price for Apple. This leads me to think something might be going on; Apple is focusing on hardware, whereas Amazon/Google is focusing on software.

What I mean by this is that Apple is primarily making money from its application store and their hardware sales. Google is getting their money from the service aspect, where people are using the service and thats where they are making the money, like from advertisements. I believe that the Google way is the way of the future, and we have already seen something more drastic what I believe will lead the way into the future.

Today a basic version which I have seen involves the Amazon Kindle Fire. That tablet can be bought with advertisements for a lower price than without advertisements. It is also my understanding that you can pay the difference to remove those advertisements. This might lead to a way of segregating users based on the device and likewise their income levels.

I believe that tomorrows tablets will be sold at below cost, and the money will be based off the future use of the software. The advertisements which are a key source of revenue would be based off which tablet you bought; the people who bought the more powerful tablets would probably have a greater income level, and thus their advertisements would be suited for them, whereas those who bought a really cheap tablet, have probably a lower income level, they will have advertisements suited to them. All of this will of course be used with the massive amount of data which Google has; to really bring advertisements which are important to me.

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