Would You Buy a Best Buy Brand Tablet?

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Best Buy storeIf you can't beat 'em, you may as well join 'em. That's Best Buy (BBY) is reportedly doing. A source is telling Reuters that the struggling consumer electronics retailer will roll out its own Android-based tablet.

Insignia Flex will sell for $239 to $259, giving the company a play at the booming tablet market. It is expected to be available exclusively at Best Buy beginning on Nov. 11, giving the chain ample time to win over holiday shoppers.

Is the Price Too High?

The initial reaction is that Best Buy may be pricing itself out of the entry-level market if Insignia Flex doesn't offer substantially better specs and features than Google's (GOOG) Nexus 7 and Amazon.com's (AMZN) Kindle Fire HD.

Both of those seven-inch tablets are Android-based and start at $199 apiece.

An important distinction is that the Insignia Flex will be a 9.7-inch tablet, putting it in the same size category Apple's (AAPL) iPad and Microsoft's (MSFT) upcoming Surface. Those gadgets cost roughly twice as much, but they are also proprietary operating systems. Only Apple can make an iOS tablet that feeds into its rich ecosystem. Microsoft licenses Windows 8 for third-party tablets, but it's ultimately in control of where it goes.

Android may have been developed by Google, but the open source nature of the platform makes it easy for anyone to crank out an Android device.

That's where Best Buy will have a problem. It sells plenty of Android tablets, including some models for less than $100. However, Amazon.com -- and possibly even Google -- are believed to be selling their tablets at a loss. They can afford to do that. Google is raising the profile of Android and benefiting from the Android marketplace. Amazon.com has digital music, movies, books, and software to sell.


Recognize the Insignia?

Insignia is Best Buy's own consumer electronics brand. It slaps it on TVs, digital photo frames, and even light bulbs. It's a private label, but it's largely seen as a commodity.

Folks buy an Insignia monitor or a speaker system because it's cheaper than the name brands. If this tablet hits the market with similar specs but at higher price points than the Nexus 7 or the Kindle Fire HD, that value proposition obviously won't apply.

The solution for Best Buy, naturally, is to find a way to make the Insignia Flex stand out on its own.

Unfortunately for the retailer it has surprisingly been more of a laggard when it comes to digital media. It sold off its Napster assets to Rhapsody last year, so it's not much of a player in streaming music. CinemaNow gives Best Buy some skin in streaming video, but it isn't a top player in its niche.

However, what Best Buy does have is clout. It can work with the labels, studios, publishers, and developers that rely on the retailer to sell their wares to create content for the Insignia Flex.

Toys R Us is hoping its new Tabeo tablet will woo parents because of dozens of preinstalled apps. Best Buy will have to bring something similarly big -- and something that only Best Buy can offer -- to its buyers if the Flex is to fly.

Best Buy has a shot here, and if the Nov. 11 release date is accurate we will find out soon enough if Best Buy is serious about making its proprietary tablet foray count.

It doesn't have much of a choice at this point. If shoppers are going to swear off Best Buy's CDs, DVDs, books, and video games, it may as well find a way to make sure that its tablet-tethered customers are still relying on Best Buy for their media needs.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Best Buy, Amazon.com, Google, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Google, Amazon.com, and Apple. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft and a bull call spread position in Apple.



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25 Comments

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Sekinu2

It wont work. Best Buy would have to release a $299 or less 10" tablet that has 3G and lte capability. Cant use the Insigna brand as thats known as junk as far as electronics. Has to be stock vanilla android no Best Buy bloat or added apps from the get go. Has to be unlocked any carrier, dual cameras, wifi and wireless streaming hd. HD lcd,have at least 32 GB ram and 2 GB onboard with at least a quad processor as thats gonna be minimal starting point. best Buy tends to take an item add few hundred to the price compared to competitors so that means if the tv is online for $450 its at Best Buy for about $850.They priced themselves out of the market place and then Geek Squad lying and stealing has ruined the name even more.

October 19 2012 at 7:15 PM Report abuse rate up rate down Reply
scorpian777

Sure why not! if ya don't like you can always return it!!

October 19 2012 at 12:30 PM Report abuse rate up rate down Reply
Torpecker

Whoa folks, slow down, Best Buy is useful for a while longer. BB still serves a purpose - or two:

1) As a de facto "showroom" for buyers who ultimately purchase what they want from Amazon - or any number of other web-based vendors.

2) Local TV reporters will miss interviewing those zombies who build campsites in front of BB several days before Black Friday, asking them what they expect to get a "wicked deal" on.

We will miss BB almost as much as Circuit City or Monkey Wards, and all the other B&M emporiums which couldn't/wouldn't modernize their business plans or please their customers.

October 19 2012 at 2:45 AM Report abuse rate up rate down Reply
Patrice

Awhile ago I bought a portable dvd player from Best Buy on a friday on my way home from work. When I got home and opened the box the headphones were missing.That monday oafter work I went back to Best Buy with the item and reciept to get the missing headphones. I was asked if the box was sealed I told them it was so the clerk said they were in the box , then he asked me what took me so long to return the item (3 days) then he said as far as he knew the head phones were in the box and I had taken them. I asked for the manager, he said he was the manager so they weren't going to do anything about the missing item. So. I ended up going home calling Sony and getting the replacement from them a week later in the mail . The dvd player cost me about $250.00 all i wanted was what I paid for , instead I was treated like a thief. That was my last trip to Best Buy.

October 18 2012 at 8:16 PM Report abuse rate up rate down Reply
James G. Banks

All I see here are people who really have had no experience with Best Buy. Get Amazon and Ebay to take back or honor a warranty on anything the hawk. Laughable at best. I don't know about you, but when you get Polk Audio speakers and a 7.1 3D component system (not worthless box systems) for half what you pay at Amazon and Ebay, I say shop at Best Buy. When you get a nice digital Canon camera at Best buy for a quarter less than you do at Amazon and Ebay, I say buy Best Buy. I say when you can get a computer with 2TB hard drive with two recordable Blu-ray drives (one of them being 3D), built in DVR, and much more including a respectable 3 year warranty for $1000 less than Amazon and Ebay with no warranty, I say buy Best Buy. Those are written in stone facts, not the heresay that I see here in the comments. Best Buy might not be for tablets, and maybe they will, but for the most part, Best Buy gets the job done better than Ebay or Amazon in its market.

October 18 2012 at 7:01 PM Report abuse rate up rate down Reply
2 replies to James G. Banks's comment
mnbigbuddy

Wait until you need service on anytining you buy at Best Buy, you will change your opinion. See my experience with "Worst Buy" when they lost my computer I took back to them for service.

October 18 2012 at 7:18 PM Report abuse -1 rate up rate down Reply
Sekinu2

I guess your either not a good shopper or have not used ebay or amazon as they come with full warranties on new items. You can add multiple year warranty extentions via square trade for couple bucks more. Then if you use paypal or a credit card your automatically covered. maybe if you used these places and had basic knowlwedge youd have know these things as it is common knowledge. If you shop Best Buy your just lazy or rich as they double the price of almost all same competitors and good luck getting a Best Buy refund after it leaves the store.

October 19 2012 at 7:19 PM Report abuse rate up rate down Reply
budwsr25

Big Box electronics stores are done. The only way Best Buy will come back is if they get with the manufactures and get a internet price match policy. I don't know how people on Amazon and Ebay are able to get all the stuff they sell and then sell it so cheap and make a living at it. Let me know so I can start a business.

October 18 2012 at 6:30 PM Report abuse rate up rate down Reply
donrfisk

Big Box electronics stores are done. The only way Best Buy will come back is if they get with the manufactures and get a internet price match policy. I don't know how people on Amazon and Ebay are able to get all the stuff they sell and then sell it so cheap and make a living at it. Let me know so I can start a business.

October 18 2012 at 6:28 PM Report abuse rate up rate down Reply
mnbigbuddy

My name for Best Buy is "Worst Buy" since they lost a computer I bought from them that I broughr to them for a minor repair. They replaced it with a new computer that they said was "equivalent" but it wasn't. It didn't have the programs on it that were on the one I had previously purchased from them and they wouldn't give me the programs, I had to buy them if I wanted them. It cost me a lot of money for Worst Buy to replace the computer that they lost that was under warranty. Never again would I ever st foot inside of one of thier stores.

October 18 2012 at 6:10 PM Report abuse rate up rate down Reply
rolando4rocks

FIRST OFF...Best Buy has HORRIBLE service...SECOND of all,how could Amazon & Google be selling the tablets at a LOSS??!!..How could they get ahold of that many???..Wouldn't you think that Best Buy would MARKET the tablet in a way that allows CONTROL of the tablet and thereof the price!!??....People believe that BIG companies have BIG minds doing their thinking,and from what I see,they are NO DIFFERENT from you and I.

October 18 2012 at 4:46 PM Report abuse rate up rate down Reply
rjggoldstandard

Best Buy will never come back. It's over.

October 18 2012 at 4:40 PM Report abuse rate up rate down Reply