The new entry-level price of the major tablet lines may be moving to $200 to $300. Not only are the quickly selling Amazon Kindle Fire and Barnes & Noble Nook Tablet in that price range, there are now rumors across the Web that Apple also will be releasing an entry level model this year for $299.

The new pricing could increase tablets' appeal for businesses as well as consumers. According to the NPD Group, almost 75 percent of small- and mid-sized businesses in the U.S. -- those with 1,000 or fewer employees -- plan to buy tablets over the next 12 months. Seventy-three percent of SMBs surveyed said they would do so, an increase from 68 percent in NPD's second-quarter results.

Free iPad?

The rumors are indicating that Apple will be releasing three models this year, for the emerging high-end, middle and low-end segments of the market. In keeping with its traditional strategy, many observers expect that the $499 iPad entry price will become $399 on a lower end model in the next wave of releases, but if two new, lower models are released, the Cupertino, California technology giant might try to stave off the growing competition from the lowest-priced models.

The reports, based on information from the Apple supply chain, have speculated that high-end and middle models will both have an A6 processor. The higher-end model is expected to have a newer, higher-resolution Retina Display of 2048 x 1536 and an 8-megapixel camera, while the middle-market version would have the same 1024 x 768 screen as the iPad 2 does. The lower end model is speculated as being Wi-Fi only.

There has also been considerable discussion about the possibility of a lower end iPad being offered for free with a two-year contract from one of the carriers, as numerous other phones are currently bundled. This could allow Apple to grab momentum for its cheapest model, since sales would be driven by the marketing muscle of the giant telecommunications partner company.

Despite the rumors, some doubters are pointing out that chasing volume at the cost of profit margin is not typical of Apple.

Google's Tablet

But Apple may soon have little choice, as lower-priced tablets are gaining a foothold. The $199 Kindle Fire burned up the virtual shelves this holiday season, according to Amazon, which said sales for the tablet, the Kindle Touch, and the Kindle e-reader were in the millions over the holiday season. No specific numbers have yet been given. The company said the Fire is the most given, most wishlisted, and best-selling product on the retailer's site.

In addition to Amazon and Barnes & Noble, that end of the market has another fixture for at least the next few weeks, as Research In Motion will keep the price of all three of its PlayBook tablets at $299 until early February. Sales for that tablet were poor until the company dramatically cut its price, and a software update in this quarter is expected to bring much-requested native e-mail functionality to the device.

While Android-based tablets from Samsung and others are also driving down the average price point of tablets, Windows 8 tablets running Intel chips are expected to be released this year from Lenovo and Acer, in addition to ARM-processor Windows 8 tablets from a variety of manufacturers. And all of the price jockeying may be upstaged when Google releases Android tablets under its name or its Nexus brand, with an expected release before the end of the year.

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