HP single-handedly destroys non-iPad tablet market

HP single-handedly destroys non-iPad tablet market

Summary: After getting a taste for $99 tablets, will consumers continue to stomach $500 price tags?

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After less than two months on sale, HP has pulled the plug on the TouchPad tablet and is so desperate to get rid of them that it is having a firesale, selling the 16GB TouchPad for $99 and the 32GB model for $149. But not only has HP killed the TouchPad, it has also single-handedly destroyed the entire non-iPad tablet market.

So what went wrong with the TouchPad? I think that several factors contributed to the death of the TouchPad:

  • No app ecosystem
  • An OS that people didn't care about
  • HP's own lack of confidence in the product - I agree with John Gruber: HP's new CEO, Léo Apotheker, has no interest in playing in the consumer market at all
  • The iPad effect - Probably the biggest reason that the TouchPad withered and died on the vine is the iPad

Let's look at that 'iPad effect' in a little more detail.

Apple sell millions of iPads every quarter, and it seems that most tech companies have no idea why it sells. In order to try to compete with the iPad, HP developed a tablet with a design and the tech specs similar to that of the iPad, priced it like the iPad, spent a ton of money on commercials featuring celebrities, and pushed the tablet out to big retailers in huge quantities.

And still no one cared about the TouchPad.

The reason: People are buying the iPad not because it's a tablet, but because it is an iPad. Apple has NOT carved out a market for tablets, Apple carved out a market for the iPad. Think about it: When Apple released the iPod back in 2001, did this create an enormous market for media players? No. It created an enormous market for the iPod.

And why should the iPad carve out a market for tablets? Apple doesn't even refer to the iPad as a tablet! Sure, Apple refers to them as amazing, magical, even revolutionary, but not as tablets.

Price is another factor. When Apple unveiled the iPad, tech pundits were bowled over by the price. $499 was seen as cheap. And it was cheap - for an Apple product. Was $499 cheap for a tablet? Well, the TouchPad (which, remember, was a pretty decent tablet) didn't sell at $499, and even a drop to $399 didn't invigorate sales much. However, once HP dropped the price to $99 as part of its firesale, this move resulted in overwhelming demand for a product that was essentially dead and that HP would no longer release updates for. This price drop was enough to push the TouchPad to the top of Amazon's electronics chart, above the Kindle.

So there you have it. Unless you're selling iPads, the stampede-inducing price point for a 16GB tablet is $99. OK, maybe this is a little on the low side, but the price definitely lies between $399 and $99, maybe around the $250 mark. But according to iSuppli, the bill of materials and manufacture of the 16GB TouchPad comes in at $298.

Which is why HP has destroyed tablets. The demise of the TouchPad has uncovered the dirty truth - the $500 tablet price point is too high ... way too high. This applies to webOS tablets, Android tablets, and it will likely apply to Windows 8 tablets, although the Windows might have a bit more oomph than webOS and Android and might be able to sustain this price for a while -- but eventually OEMs will engage into a race to the bottom and prices will fall.

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Topics: Tablets, Hardware, Hewlett-Packard, Laptops, Mobility

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343 comments
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  • RE: HP single-handedly destroys non-iPad tablet market

    it would have all been different if HP was making tablets with Windows OS, I want a tablet with Windows ...
    AdnanPirota
    • RE: HP single-handedly destroys non-iPad tablet market

      @AdnanPirota HP should have invested the money they wasted on Web/OS on the HP Slate and Windows. They should have tried to get the price of the HP Slate down to at least the same price as netbooks. You didn't need a rocket scientist to tell you that Microsoft was going to improve touch in Windows.
      rwalrond
      • No, Slate would be dead even faster; as to non-iPad tablet market, it is,

        @rwalrond: ... of course, not dead.

        Samsung sold about 1 million SGT 10.1 in two months, all the others sell also few hundred thousand per quarter. So in <b>non-iPad tablets sell up to 1.5 million units per quarter</b> (some "analyst" firms give nonsensical figures such as 2.5 million, but this additional million is pure fantasy).

        It is not like 1 million per week sales of iPad, but still some value, which will grow.

        The key question is whether this volume will grow as fast as some predict, or slower.
        DDERSSS
      • RE: HP single-handedly destroys non-iPad tablet market

        @DeRSSS: With all that Best Buy in the US is giving away 10.1 tablets if you buy a new Samsung TV. If the sales are that hot I doubt they would be giving them away (Sammy is footing the cost not Best Buy)
        tymiles
      • As folks here often point out...

        ...there have been Windows tablets available for years and years now, and they don't sell. Why does anyone think this would have suddenly changed with HP?
        pdq
      • RE: HP single-handedly destroys non-iPad tablet market

        @pdq: If they don't sell, why have they been around for years and years? That just doesn't make sense. They've always been around and targeted at specific applications. It doesn't mean they can't be modified for consumer-centric uses.
        joshandrebekah
      • Enterprise

        @pdq
        These were focused on enterprise use, not consumer use.
        You cannot really match these to tablets of now.
        I bought one (price = ouch!) and found it to work perfectly fine just that the portability factor was not really there.
        Heavy with minimal battery life. OS was fine.
        At work we have a few (lab) and they work great there!

        Now if I could load Win7 on my iPad2 or Transformer that would be sweet ;)
        rhonin
      • RE: HP single-handedly destroys non-iPad tablet market

        @DeRSSS

        There's a big difference between shipped and sold.

        250,000 Galaxy Tabs 10.1's were shipped to best buy. Only around 26,000 sold. That isn't even close to Apple, which sells millions of iPads a quarter. >:(
        liquidmark
      • RE: HP single-handedly destroys non-iPad tablet market

        @joshandrebekah <br><br>"If they don't sell, why have they been around for years and years?"<br><br>Because they thought that moving 20,000 units of (insert windows tablet name here) a year was good for a Tablet until the iPad came out and crushed their combined sales over the last ten years... In one month.
        liquidmark
      • RE: HP single-handedly destroys non-iPad tablet market

        @rwalrond
        HP did invest with Windows tablets and realized they were DOA for at least two more years until Win 8 showed up. By that time it will probably be too late and even if it wasn't, HP would still have to compete with all the el cheapo Win 8 tablet OEMs and be stuck with 5% margins like their PC business.
        HP should have made at least a three year commitment to developing Palm OS and they should have got the first Pre upgrade out the door at least six months ago to keep the ecosystem moving. The tablet idea was probably a distraction this early in their timeline. PalmOS simply wasn't ready.
        Synthmeister
      • DeRSSS, why would you consider that fantasy?

        @DeRSSS
        Because you do not like the tought of that, or do you have some knowledge that these analysts do not?

        :|
        Tim Cook
      • pdq, because of their costs, nothing more.

        @pdq

        Many of those tablets are full features computers in tablet form, at a cost of 2000 or more.

        A very niche product as it is not an item someone purchases just to "play around with".

        Indeed, even with the iPad, only a very tiny percentage of people have justified the need for one, even at the price of 499 dollars, in which they have purchased one.
        :|
        Tim Cook
      • Because in Q2 SGT10.1 was only in sale for a months, and tablets producers

        @Mister Spock: ... like Motorola and RIM reported sales of just few hundred thousand units, and the likes of Acer and Asus slashed their sales goals for tablets.

        If you add all of those sales together, you can not count more than like 1.5 million non-iPad tablets sold in Q2.
        DDERSSS
      • RE: HP single-handedly destroys non-iPad tablet market

        @Mister Spock

        [i]Indeed, even with the iPad, only a very tiny percentage of people have justified the need for one..[/i]

        That argument can be applied to everything other than food, clothing and shelter to some degree. It's always interesting how it is manipulated in tech discussions. Is an MP3 player necessary? Or a game console or a television?.. How do you justify anything you like using that is not vital to your life or livelihood? You enjoy it, you use it. It's that simple.
        My iPad has subsumed 90% or more of my non work-related computer use. I very rarely turn on my home computer anymore except to do home-content creation (photos etc.) that I can't do as well on the ipad.
        Tigertank
    • RE: HP single-handedly destroys non-iPad tablet market

      @AdnanPirota
      GET an iPad 2 and install Splashtop, that gives you windows on the iPad and is by far the very best app I've ever purchased, now I can browse Google news on my iPad using Chrome, simply amazing!
      Hasam1991
      • RE: HP single-handedly destroys non-iPad tablet market

        @Hasam1991 Why in the name of God would you want to sully up your iPad with Windows? I would put Android on it before I'd let Windows anywhere near it.
        clokverkorange
      • RE: HP single-handedly destroys non-iPad tablet market

        @Hasam1991 You neglected to mention that Splashtop is a remote desktop app similar to GoToMyPC or LogMeIn. The statement that it "gives you windows on the iPad" is totally misleading.
        NameRedacted
      • RE: HP single-handedly destroys non-iPad tablet market

        ((@Hasam1991 I agree. I do the same.))
        Excellent article. I wasn't in the market for any non-iPad device until I heard about the $99 price. I immediately tried to get one but was too late. $100 to $200 is really what I want to pay for a tablet. I paid $400 for my iPad and feel it was a good purchase, but it really is different than the non-Apple tablets. I haven't handled (or owned) an Android tablet yet that operates the way my iPad does. But for $100 I'm willing to put-up with the little problems that the Android tabs seem to be plagued by.

        I personally have been bewildered by anyone who has purchased a non-iPad for the same price they could get it for! A man at my work bought the Xoom for $800 at the same time I bought the iPad for $400. After six months, mine is still getting tons of use while his hardly ever gets picked-up off the desk.

        Give me a $100 tablet and I won't care if I use it or not!!
        camcost@...
      • A simple answer, clokverkorange

        @Hasam1991

        Acording to recent sales figures, Windows is still the top selling OS, easilly outpacing other operating systems.

        That is because people see the need for Windows, Android on a tablet, according to recent sales figures, shows no so much for Android.
        :|
        Tim Cook
      • RE: HP single-handedly destroys non-iPad tablet market

        @Hasam1991 Splashtop is AWESOME and comes FREE with ASUS Transformer Tablets. BOOYA! ;)
        eLearner