The challenge that HTC, Samsung, Nokia and others will now have is that they will compete against two Silicon Valley giants, Apple and Google, who can design great hardware and sell it at low margins. Apple will recoup its costs with apps and content and Google with ads and apps. Instead, all other hardware makers will have to think of how to monetize after the hardware is sold or they will have a hard time competing. A proof of this is that nobody has come up with a product that competes with the iPad at $499 yet. No hardware makers can turn their hardware into a post-sales cash machine as Apple can. Now Motorola will be able to make Android/Honeycomb tablets at low margins because Google will milk them with post-sale profits from ads, apps and probably soon content as paid versions of Youtube and music services get going.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

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Mark Cheshire on August 17, 2011  · 

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