The group of companies trying to make an iPad competitor may have learned a bad lesson from the HP TouchPad cancellation and subsequent sell-off. The lines at stores to get a $99 TouchPad and high-volume sales online may convince OEMs that cheap is the feature to garner big sales numbers. I hate to burst their bubble but I do not believe that is the case.
The TouchPad situation was unusual and should not be used to form strategy for other products. Folks went crazy for the webOS tablet not only because it was a mere hundred bucks, but because they knew the TouchPad was worth far more. HP didn't set any sales records at the $500 price at launch, and the $100 frenzy was due to customers realizing it was worth far more than the fire-bin selling price. The TouchPad is a good quality product for $100, and buyers knew that, thus the frenzy.
The fact is there have been cheap, even $100 cheap, tablets for a while. They had unfamiliar product names on them, and they sold in places not known for quality merchandise. Fact is, they were terrible tablets, not surprising for such cheap devices. They haven't sold in any numbers either, and quietly disappear as soon as they arrive on the market.
No, the reality is that buyers clamored to buy a cheap tablet from HP because of the company's reputation for products. HP is a brand familiar to everyone, and that instills a sense of reliability with folks. Once the price was dropped so low that everyone knew HP was selling it at a big loss, thus it was a great deal, and we saw a TouchPad buying frenzy.
Not because $100 is the magic selling price for tablets, but because in the case of the HP TouchPad $100 was an outstanding deal.