Apple's ability to deliver the iPad as cheap as $500 has surprised some competitors, who thought they were safe below a $1000 floor on Apple pricing. Netbooks, previously priced to sell are now in direct competition with a sleek piece of high-end hardware offering an innovative UI and well-designed software, may face the choice to lower pricing or lose share.
Display panel supplier AUO sees client inquiries on iPad-like display panels, and foresees the possibility that the device could sell many more units than the previously-predicted three or four million or fewer.
With Apple's margins difficult to calculate due to the unknown component cost of its self-designed system-on-a-chip, its unclear how much wiggle room Apple has for competition. Apple may plan sucking the air out of PC manufacturers by competing at multiple price points as it does in the music player space.
If the iPad proves serviceable as a stand-alone computer and not a companion device requiring additional computing infrastructure, Apple could sell quite a few of these tablets.