Hardware 2.0

Adrian Kingsley-Hughes

HP TouchPad now cheaper than the iPad

By Adrian Kingsley-Hughes | August 11, 2011, 7:22am PDT

Summary: The HP TouchPad just got $100 cheaper.

HP has slashed the price of the TouchPad so that the budget model is now cheaper that the budget iPad.

And it’s a hefty price cut of $100.

The $100 price cut sees the 16GB Wi-Fi TouchPad go from $499 to $399, with the 32GB WiFi model now at $499. Compare this to the iPad, where the 16GB WiFi model is at the original price of $499.

According to HP senior vice president Stephen DiFranco the reason for the price cut is that HP was ‘pleased with customer response’ to a $100 instant-savings promotion that it had recently run.

My guess here is that HP is looking to boost sales rather than profit in order to make the platform more attractive to developers - more developers means more apps, which might lead to more interest from the buying public. Apps are what’s missing on the TouchPad’s webOS platform, and without buoyant sales, developers are likely to stay away, which is bad for the app ecosystem.

I still think that the iPad is the best tablet out there, but the TouchPad is now fast becoming a worthy rival. If you’re not a fan of Apple, then you might want to take a look at it.

That said, a TouchPad price drop is unlikely to affect iPad sales that much … boost in TouchPad sales is likely to come at the expense of Android sales.

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Hewlett-Packard Co., Apple iPad, Adrian Kingsley-Hughes

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

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And now it's gone

J-Hermes 20th Aug

And nine days later after this article was posted the Touchpad is history.

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RE: HP TouchPad now cheaper than the iPad

LoverockDavidson 11th Aug

Take that, iPad! Still overpriced for a tablet though.

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Take what, iPad?

toddybottom 11th Aug

@LoverockDavidson
"That said, a TouchPad price drop is unlikely to affect iPad sales that much ? boost in TouchPad sales is likely to come at the expense of Android sales."

I agree. This will not affect Apple at all. Not one bit. This will do 2 things:
1. Knock HP out of the tablet market after sustaining 2 years of losses.
2. Knock others out of the tablet market while they try to compete with HP on price.

End result? Less competition. Not good for consumers. This is a sick market from a competition viewpoint. From profit share to marketshare, all indications are that this market is not effective. When one company dominates a market so thoroughly, consumers suffer. No other market is like this.

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RE: HP TouchPad now cheaper than the iPad

jgm@... 11th Aug

@toddybottom That's because there is not tablet market; there is only an iPad market. People want an iPad because it's the iPad rather than its fulfilling some need that existed all this time and can be filled by multiple possible products.

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RE: HP TouchPad now cheaper than the iPad

Rob.sharp@... 11th Aug

@LoverockDavidson

All pads are over priced for what they offer. You're buying a large media device that does far less than a laptop. You're buying the cool factor and thats about it...At some point these are going to get good but thats a few years aways. I see mostly praise for apple but i beleive a lot of that is ZDNET bias towards Apple everything. I'm on hold to see what Windows 8 can do. it think its going to usher in a superior OS for tablets, phones and pcs.

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RE: HP TouchPad now cheaper than the iPad

Spidey1 17th Aug

@rob.sharp@...

Windows 8 on a phone = crash in the pan...not one windows mobile phone has taken grip after the lousy experiences people had with them in 2008-2009.

I can only imagine a tablet that needs to be rebooted after every app is used.

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Not if people buy it:)

James Quinn 11th Aug

@LoverockDavidson Just pointing out that an individuals personal opinion while valid for the individual does not necessarily translate to the greater consumer market but rather is limited to that individual. For instance I'm certain you find the iPad overpriced and yet so far millions of others have not and that number so far at least is growing.

Pagan jim

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RE: HP TouchPad now cheaper than the iPad

auntaru 11th Aug

@LoverockDavidson
Java is the number one programming language.
Can u programm in Java for WebOS ?

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RE: HP TouchPad now cheaper than the iPad

jgm@... 11th Aug

@auntaru Number one by what metric and across what demographic?

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RE: HP TouchPad now cheaper than the iPad

Pete "athynz" Athens 11th Aug

@LoverockDavidson Indeed - then again I went the "cheap" route for my tablet with my rooted Nook Color... but this does put HP in a good position to be a rival to the iPad. Given that HP's products are solid, WebOS is a decent mobile OS, and now with a lower price I expect sales of the TouchPad to pick up at the expense of both Apple's iPad and the Android offerings.

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RE: HP TouchPad now cheaper than the iPad

Rama.NET 11th Aug

You could get it for another $100 less. sign up for sprint/verizon/at&t broadband plan with Best Buy and they take out $100 further on tablets (including iPads) and enjoy the the broadband for 30 days for free and don't forget to cancel that on 30th day. That way Touchpad would come for $299 for 16GB and $399 for 32GB. grin

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RE: HP TouchPad now cheaper than the iPad

AdnanPirota 11th Aug

@Rama.NET wow, great news

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RE: HP TouchPad now cheaper than the iPad

opcom 12th Aug

@Rama.NET hopefully that will be easier to cancel than AOL. Sometimes those companies still go on billing and billing.. bad juju.

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Maybe this isn't a good idea after all

Robert Hahn 11th Aug

It's been obvious for some time that a $100 price cut wouldn't hurt any of these non-Apple tablets. Yet except for the occasional one-day sale on Woot, we haven't seen it. That says there really isn't room for such a cut without turning the devices into money-losing propositions.

HP is one of the Deep Pockets that can eat a loss on these things for a couple of years to see if they can make a business out of this. But not everyone can do that. In particular, Motorola probably can't: they are already fighting for their lives in the handset market and don't really need a money-losing distraction. Same for RIM. Samsung can afford to be patient, but Acer, Asus, and HTC might have more trouble.

My guess? This move by HP causes at least two, and probably four, of the existing tablet wannabes to drop out.

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RE: HP TouchPad now cheaper than the iPad

sorli 11th Aug

Oh I think it is a great idea. Look at Asus selling their less then $400 unit like hot cakes. The HP TouchPad with webOS was made for tablets and I'm stoked by this price drop and news of 7" TouchPad on the horizon! Wife and I are looking forward to drop-kicking my Nook Color that is barely usable as a tablet. Sorli...

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RE: HP TouchPad now cheaper than the iPad

Pete "athynz" Athens 11th Aug

@sorli Have you attempted to root your Nook Color? IMHE it runs full Gingerbread very well indeed and has full access to the Google App store and the Amazon App Market... I do find I run the Nook Color more with the stock OS but it is a decent lower end full Android tablet.

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What is their profit margin now?

toddybottom 11th Aug

I bet you that once you factor in R&D, marketing, startup costs and other overhead, HP is losing a ton of money on these. HP will be out of the market in 2 years if Apple doesn't sue them out of the market first.

I also just read that Wal-Mart shut down their music store stating that they simply could not compete with iTunes. Another One Bites The Dust. The markets that Apple competes in are getting sicker and sicker by the day and much of it has to do with Apple's iTunes ecosystem. No one can compete with it and unfortunately, no one can compete *PROFITABLY* in any of the markets that iTunes touches like the MP3 player market, the smartphone market, and the tablet market. Yes, there are competitors in each of these markets. No, none of them make any profit. Sick sick markets and consumers lose.

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RE: HP TouchPad now cheaper than the iPad

Robert Hahn 11th Aug

@toddybottom
We could all have a very long discussion on the subject of whether consumers "win" when cutthroat competition drives prices down to the point that progress slows to a crawl. Aside from some feeds and speeds, what real new functionality exists in a quad-core Windows 7 machine that wasn't in Windows 3.1 on a 386? Point and click. Same old Same Old.

2001 came and went; where was Hal 9000? Where is any real, serious breakthrough? How do consumers benefit when a technology as promising as microelectronics gets driven into a rut that it doesn't escape for thirty years?

Apple is shaking things up. They're causing people to have to think instead of turning the crank one more time on the Same Old Stuff. I say good for them.

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It would be a very short discussion

toddybottom 11th Aug

@Robert Hahn
"We could all have a very long discussion on the subject of whether consumers "win" when cutthroat competition drives prices down to the point that progress slows to a crawl."

It would be a short discussion because I agree totally with you. In fact, I even tried to highlight the word *PROFITABLY* in my post, not sure how that could have been missed.

My argument since the very beginning has been that competition for the sake of competition does not benefit consumers and if I'm reading your post correctly, we are both 100% in agreement on that. People like to point out that competitors do exist in the smartphone and tablet market and that is technically true. However, consumers do not benefit from competitors that are losing money on every unit they sell while 1 company rakes in 90%+ of all the profits. Consumers only benefit when there are several healthy, profitable competitors in a market. No one can objectively look at the smartphone and tablet markets and say that there are several healthy competitors in those markets. There aren't.

At no point am I blaming Apple for any of this. Apple is doing what it must to maximize its profits and it has a duty to act as anti-competitively as it legally can. That involves suing others out of the market and not licensing access to its iTunes ecosystem. That's fine and I congratulate Apple on becoming the biggest company in the world and on doing everything it can to remain so.

That being said, sick markets are not good for consumers. Consumers would benefit if there were several healthy, profitable competitors in the smartphone and tablet markets (and MP3 player market although that one is becoming irrelevant). I'm quite surprised that any of what I'm saying is the least bit controversial.

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RE: HP TouchPad now cheaper than the iPad

Alfred Smithe 11th Aug

@toddybottom We know that the ipad pricing shocked the OEMs in the PC market place and the only way they've been able to match it is to by cutting corners on quality because Apple simply has too much of the supply chain locked down. The margins on this must be getting pretty low for HP - yes, this will drive volume but at what cost? Where's the quality of profit?

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Yes, Apple is choking others out of the market

toddybottom Updated - 11th Aug

@Alfred Smithe
And they are doing the right way. It is illegal to leverage your market dominant position to offer your product below cost for the sole intention of knocking out a competitor. There is nothing wrong with knocking out a competitor by using your market dominant position to negotiate favorable prices from suppliers that no other competitor could ever get. Everyone other than Apple has to pay more and charge less. They are then left with tiny profit margins that can't be used for R&D (and I'm being kind, truth is that they are left with negative profit margins). Who suffers? Not Apple. Consumers certainly do though.

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It's a new market

oncall 11th Aug

@toddybottom

I don't think it's a sick market. The new market is selling a complete ecosystem with the device and supporting it. That's what consumers want, and Apple is enjoying the fruits of its considerable investment of time and money in building it. The sick part is companies trying to use PC ecosystem tactics to combat it: throw together a bunch of cheap hardware, slap any cheap "flavor of the month" OS on it, sell it, and move onto the next model. Consumers want more, they are willing to pay for more, they deserve more and Apple is delivering. The profits are immense, and when there are immense profits to be had competition will come. Someone will step forward, make the investment of time and money and deliver a viable competing platform.

Yeah it's ugly right now as the old business model struggles to hang onto what worked (two years ago) but is no longer valid. I am sure we could think up a few other industries that are currently gasping for oxigen because of new and disruptive business models.

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Mister Content

Robert Hahn 11th Aug

@oncall
Bingo. The only guy we see building a serious ecosystem before launching a tablet is Amazon. Everybody else seems to think that having USB ports and more megahertz than the next guy will sooner or later produce a hit product. Well, that and running ads that say, "Buy mine and a space alien pod will engulf you."

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Thanks for both of your inputs

toddybottom 11th Aug

@oncall
You are both merely reiterating what I wrote. There is a market with only 1 good competitor in it and a bunch of failing (and flailing) competitors. That is not a healthy market. That is a sick market.

I agree with both of you that the only way the market will become healthy is if someone can create a competitor to the iTunes ecosystem. You are both 100% right in what you wrote. What worries me is that this is an EXTREMELY expensive and risky proposition and no one will consider it worthwhile. The playing field is littered with companies that tried to go up against Apple in the iTunes ecosystem market and have utterly utterly failed. I recently read that Wal-Mart just quit because they simply can't compete against Apple. And if it was difficult to compete against iTunes before the iPhone and iPad, I suggest that it is absolutely impossible right now. If Apple ever gets AppleTV right, the market is done. Finished.

So to suggest that all the market needs is a competitor with an ecosystem as good as Apple's is fine to say but impossible (in my opinion) to implement. And no, Amazon does not have an ecosystem as good as Apple's. Not even close. Nor does it appear that Amazon has any interest in competing against Apple in the tablet or smartphone market. Amazon is interested in the Kindle because at $100, it exposes Amazon's store to a much wider audience of people who cannot afford a $500 iPad. Amazon would see absolutely no benefit from creating a $500 iPad competitor. And now that Amazon has the Kindle Cloud Reader, they've effectively side stepped Apple's 30% charge for having a link to the Amazon store.

To recap:
- The market is sick because Apple currently has no effective competition. That is the definition of a sick market. This is a fact.
- The market will not correct itself because no one will be able to create an ecosystem to compete with iTunes. This is my opinion.

Thanks for the input though.

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It's called consolidation

oncall 11th Aug

@toddybottom

It's what happens to any market that is flodded with marginal players.

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RE: HP TouchPad now cheaper than the iPad

Scrabbler 11th Aug

"HP was ?pleased with customer response? to a $100 instant-savings promotion".
English translation: we could not sell any for $500.

It is both good and bad for the consumer. Good as the prices are going down. Bad as the only choice Apple's competitors have is to join the race to the bottom.

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RE: HP TouchPad now cheaper than the iPad

Gromit1704 11th Aug

HP cut the price to increase sales.
Apple increase production to increase sales.

No prizes for guessing the more sustainable sales model.

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Turning Point?

James Quinn 11th Aug

When a big boy like HP does a large price drop like this it means something... But what exactly? I personally want WebOS to be a success in both tablets and phones for I do believe competition is healthy. Android is facing multiple IP suits and I think the end result will also be a turning point for Android for in the end it is unlikely Android will be seen as the cheap alternative OS it originally was. Licensing fee's will be paid. Apple is also going after design issues. I remember when the original bondi blue iMac was such a hit and everyone even such diverse manufacturers as vacume and iron makers were putting colored plastic on their wears:). So a Korean OEM decided to make a PC that looked just like an iMac. Apple went after them and won. Now the Korean outfit did put up a fight. They claime their bondi PC clearly ran Windows. It did not have an Apple logo and in fact on it's body had their logo. Many similar arguments that are being made about Samsung and other Tablets. It does not have an Apple logo on it!!! Why can't they see this!?! happy

. I think as things stand now we are in a turning point for tablets maybe even a shake out. Still it could be good the weak will die as they should. The strong will emerge and everyone will be forced to clearly define themselves in terms of design, features, specs, OS, and use.

Pagan jim