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What HP's TouchPad Fire Sale Teaches iPad Rivals
Hugh Pickens writes "Christopher Williams writes that the success of HP's fire sale in unloading hundreds of thousands of TouchPads at heavily discounted prices may provide clues to other Apple competitors hoping to loosen the iPad's stranglehold on the tablet computing market. The main Google Android tablets, made by Samsung and Motorola, are pitched at around the same price point as the iPad but, put together with all the other Android tablets, it's estimated the iPad outsells them eight to one so 'the problem becomes circular: the user base is too small for app developers to invest in,' writes Williams, 'so users buy an iPad because there are more apps and the user base gets even smaller relative to Apple's.' According to Williams, Android tablet makers must find a way of breaking the cycle to avoid the TouchPad's fate. 'No doubt acutely aware of this is Amazon, which is rumored to be preparing to release an Android tablet this autumn,' writes Williams, adding that Amazon must price their 'iPad killer' at break-even or a loss to succeed. 'Its online retail empire and the Kindle brand mean Amazon has the marketing clout to take on the iPad, but on the evidence of HP's successful TouchPad sell off, the question is whether it has the courage to put its money on the line. '"
Do they really need an in-depth analysis for something that bloody simple?
Yeah sure, you can beat the iPad if you offer similar features and sell it for $100--no shit. How is that in ANY way analogous too offering your pad for $50-$100 cheaper than an iPad? Oooh, let's all run out an buy the Amazon maxiPad because it's $650 instead of the iPad's $700!! Unless you're prepared to absolutely bleed money on every maxiPad sale, you're not going to soak up even a single percentage point of the iPad's market dominance.
SJW: Someone who has run out of real oppression, and has to fake it.
It's obvious that if you offer a tablet with similar features to an iPad but substantially cheaper, even if it lacks in some areas (such as apps or polish), people will buy it. It doesn't take a genius to realize that. Thats pretty much what's happening with the iPhone and Android phones already. The question that interests me more is whether a worse tablet (worse specs) at a substantially reduced price point will sell well.
What Apple's rivals should do is not just learn a lesson. They should leverage the TouchPad. Get Android working on the TouchPad which just sold hundreds of thousands of units, and keep building the Android app userbase.
Apple has had the advantage of leveraging what was originally the iPod consumer base into a mature ecosystem which has turned out to be one of the iPad's main advantages over its would-be rivals. Here's a golden opportunity for Apple's rivals to influence the future purchasing decisions of hundreds of thousands of consumers.
Light a fire for a man and he'll be warm for a day. Light a man on fire and he'll be warm for the rest of his life.
$100 is the right price point for an adequate tablet with Wifi or 3g. At $700, any pad is a bad joke, especially when a netbook is $300 and $150 readers can be rooted and made to function as tablets. $100 seems too low? Remember what laptops used to cost? Manufacturers will just have to get over it. The high margin time window just gets shorter and shorter.
Please do not read this sig. Thank you.
Selling a product at a loss doesn't help unless you have some other revenue stream.
Console makers get away with it because they license developers. Besides, the production cycle on a console is long enough to actually put them into the black over the long run.
Cellular companies get away with it because customers are locked into a contract, and have to pay a large sum to get out of it.
Tablet makers though? I guess Apple has their app store and other developers can do the same, but most they would have to sell a lot of apps to make up the difference (since most apps are significantly cheaper than most console games, if you're using that model). The service model may work, but I honestly don't know how many people are going to be willing to pay for yet another internet connection. After all, the people who buy tablets are likely already paying for home internet and cellular internet service.
They have 50% of all the profit in the smartphone industry. They are printing money. How does that equate with getting their clock cleaned?
The same pattern keeps appearing. iPhone vs Android a few years ago and then an oddball player called the Pre came along which never drew in a lot of developers and never had the level of apps Android and iPhone enjoy. Pre failed. WebOS was later put on what was priced as essentially a feature phone, the Pixi.
Now, we're playing this game again. iPad vs Honeycomb Tablets and then WebOS appears again. Not a lot of interest, still no developers, still no apps, and HP just decided to call it quits when their forecasts said this thing was going to be another Pre.
In operating systems there tends to be a natural monopoly and natural duopolies because of the scales involved and because people really don't crave that much choice. This is yet another example of this reality.
Most likely, someone will released some half-assed 2.3 ROM for this tablet and it'll suck. Shame google isn't releasing 3.2 for this thing via a side-channel. Honeycomb really is on par with ipad and makes for incredible experience.
Since you are ignoring all the component and manufacturating costs that it actually takes to make these things--what the hell? why not go all the way.
The question isn't whether $500+ for a tablet is feasible in the market--it has been 100% proven that this is a feasible price point because Apple is selling tens of millions of iPads. The question is why can't anyone else replicate what Apple is doing with tablets?
I think part of the problem is that Apple has an even larger headstart on tablets than they had on smartphones. It also seems that the 'ecosystem' is an even more important differentiater for tablets than for smartphones. I expect Android tablets to slowly catch up in terms of hardware/software quality (just like they are slowly catching up in smartphones) and ecosystem (although this ramp is even slower).
The real question is what the next plateau will be; will it be like smartphones where Apple is happy to have 50% of the industry-wide profit (and let everyone else fight over the scraps)?
Every single day. On the long trainride to/from work, in the can, as a quick and dirty hotspot when needed, as a backup for my home internet when the cable goes down, as a halfway decent game platform, watching netflix (until 3.1 broke it...mutter...) to IM back and forth with the wife and kids, handy camera, general internet browsing, reading mail, and reading books and magazines with Kindle and Nook software etc.etc.
It is a form factor that (unlike a laptop) is actually viable to haul around with you just whenever.
--- Mercutio was right.
Who are as dedicated to android as the apple fanbois are to the shit that apple sells.
Yes, I'm an android fanboi and I don't even own one (yet). I do know that I will NEVER buy an apple product.
So not so much a fan then, more a zealot.
iPad ... have devout worshipers that purchase as soon as their products come out. Android people are a bit pickier when it comes to buying something, they actually take time to evaluate the products instead of the hipsters who buy a label.
It simply boggles my mind that people continue to hold on to this gibberish. Here's a secret: Apple makes products people want. You can try to portray it as an army of mindless zombies shambling along giving Apple their money but the truth of the matter is that people buy products they want. Apple is succeeding (to say the least) because they have invested a lot of effort into figuring out what people want and making that product.
There's a reason why the typical geek has zero capacity to predict future trends and accurately determine what consumers want - because they hold onto falsehoods as if they're gospel and stick their heads in the sand when the truth is shown to them.
You don't have to like Apple (and your comments make it perfectly clear that you don't) but you're a blind fool if you ignore the reasons for Apple's success. You complain about Apple "worshipers" yet your disdain for Apple and its customers is the only fanatical thing I see here.
A device that can't play your original files is a bother. Whatever is a bother for a geek, may be pretty impossible for a mundane consumer.
Anything that's a video player should "just work" for a wide range of media files.
A Pirate and a Puritan look the same on a balance sheet.
I don't think a loss-leader hardware platform is going to work at this point, unless it's so cheap it's practically free ( $50), or the supplied software is absolutely fantastic and locked to the hardware.
I don't think the touchpads would have flown off the shelves as fast if they couldn't have other software loaded on them. With no support from HP, no one is going to buy something with no support, no upgrades, no bug fixes, unless they're pretty confident they can put something else on it fairly easily.
Give me a tablet with GPS, compass, gyroscope, accelerometer, camera, multi-touch hi-res screen, 802.11n, bluetooth, perhaps an infrared interface, a dock/USB connector for anything else (perhaps including external video), a microSD slot for boot/system software, and two standard SD slots (one for user data, including all settings; the other for importing data (e.g. camera card) or doing backups). No built-in storage, microSD stores all the system software plus whatever apps you want to put there. I guarantee you that there will be software to put on it if you sell the raw device (only firmware needed is what's necessary for initial boot off of the microSD card).
If you can sell the raw device for $200 or less, with no software development, no software support costs, I think it will sell like crazy. You'll be able to buy a microSD card pre-loaded with a system for it, add in another SD card and you're ready to go - Best Buy could sell it as a package for $300, make money off of it, and still sell tons of them.
I don't think that millions and millions and millions of people buy Apple products based purely on marketing. I believe that the vast majority of initial iPad sales (since we're discussing tablets) occurred to people who enjoyed Apple's products in general and the "touch" products (iPhone/iPod Touch) specifically and had a "mobile computing device" (more than an iPod Touch but less than a laptop) need. Then, once the early adopters started telling their "on the fence" friends of their experience, more people bought in. Then, those people who never buy 1st generation products bought in because Apple released the iPad 2. Then the iPad continued to sell well.
People don't plunk down $500 because it's cool. They plunk down $500 because they're confident that they're going to get the product they want. They plunk down $500 because it's the right price for a product they want or need.
You don't have to like Apple and you don't have to like the iPad but you'd be foolish to ignore how and why the iPad is succeeding where other tablets are absolutely, utterly failing. No, really - the HP TouchPad is fire saled. The Blackberry Playbook is utterly floundering. The stories of failed tablet products abound. A _BLACKBERRY_ tablet is failing horribly while Apple can't keep iPad's in stock. Figure out why that's happening and don't stop analyzing why once you get to "marketing" because there are more reasons than that.
I don't think such a system would sell well at all, especially outside of the geek market. One of the reasons a lot of people like tablets is that they take a lot of the hard work out of computers. Need a new app? Go to the store, select and buy it, and the system takes care of the rest. No installing needed on your part. Same thing with OS updates. In most cases, they're either OTA or just need to be plugged into the computer. You don't actually have to do it.
Compare it to if your idea takes off: Now the user has to know what peripherals are on their device. They also have to know where to get the software. They have to know how to download the software. They have to know how to install the software. And that's just if things go smoothly. And you're still not sure if there's actually going to be support for it, or if you'll get any updates.
40. They changed it to 40.
HP just unwittingly and probably unwillingly just handed the game to Android.
While the sell off of $99 tablets is certainly going to hurt Samsung, etc in the pocketbooks in terms of lost sales, the fact is almost all the people who bought the Touchpads are going to install Android on them.
In a blink of an eye, the Android tablet market just grew by over a million units sold.
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