If you can’t beat ‘em, undercut ‘em.

It’s the new slogan of tablet and smartphone manufacturers trying to push products into an already packed space.

Companies are attempting to compete in today’s crowded tablet market by slashing product prices to undercut rivals. The iPad, the front-runner in the field, set the entry-level price for tablets at $500. It’s the price to beat.

And many companies are trying hard to beat Apple. Toshiba’s recently debuted Thrive tablet starts at $430, while Acer’s Iconia Tab A500 costs $450. As recently as last week, HP announced steep discounts on its TouchPad tablet...