Tablets are cheap to make :
Screen
Mainboard (including connectors)
Battery
Cables
(maybe a few buttons)
(maybe a camera)
Compared to a car, or a laptop, the limited amount of components makes them a manufacturer's dream. With fewer adjustments in assembly and manufacturing, or in region based customization, there is a net reduction in production costs compared to full notebooks or smartphones with keyboards.
However, the prices asked for tablets were nothing more than coopetition. Would a manufacturer make a straight launch with a 150$ far better than the iPad, it would not have the prestige, nor the guarantee that it will sell in sufficient volumes to be profitable.
Regardless, there is reason to think that the tablet fad is over: other than flash games or netflix, they have yet to be useful.
UPDATE: I guess I was wrong. Price point is a really important thing to consider. The HP touchpad is selling quite well.
However the more I try using tablets, or touch screens in general, I find the navigation of touching the screen rather distracting. I like my keys, mouse wheel etc. I can see the screen the whole time!
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