HP's TouchPad: Dead on Arrival

HP's TouchPad: Dead on Arrival

Summary: At $499, HP's highly-anticipated TouchPad isn't going to get many takers.

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TOPICS: Hewlett-Packard
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At $499, HP's highly-anticipated TouchPad isn't going to get many takers.

My Mobile News colleague James Kendrick reports that the HP TouchPad, which is going on sale next month with several major retail partners, is the "Last Stand" for iPad competitors.

I'm right there with James' excellent analysis, but unfortunately I have to disagree with the "Last Stand" part. To have a Last Stand, you have to be packing heat. By pricing the entry-level TouchPad at $499, HP is just walking out into the gunfight buck-naked with "Shoot me now" painted on its chest.

Also Read: HP TouchPad, Last Stand for iPad Competitors?

The only way the iOS tablet ecosystem can be disrupted by a competitor is to come in substantially cheaper. I've said this as well about Android tablets -- without a comparable ecosystem, you have to come in as more value-priced.

With nearly identical on-paper specifications as the iPad 2, and launching at the same price, HP isn't doing itself any favors. There is absolutely nothing this product has that could be considered an advantage -- not its display, its CPU, nor its front-facing video conferencing camera (which, by the way, is one less than the iPad 2, which also includes a rear camera).

Oh and by the way, it's heavier and thicker than the iPad 2. It also appears to have a bigger battery. Does that mean that the TouchPad has longer battery life or its design is more inefficient? That remains to be seen.

Look, I'm not saying WebOS doesn't appear to be extremely nice from a pure user experience perspective. It's a gorgeous-looking OS that has a great multitasking UI. It also appears to have some advantages in that in utilizing existing web standards for its APIs, developers might be able to get some apps off the ground fairly rapidly.

The problem is, HP is about 65,000 tablet apps short of its largest competitor (300,000 if you count the entire iOS ecosystem) and it's got the chutzpah to sell their product without any key differentiators for the same amount of money.

What does that spell? Dead on Arrival.

Here's what I would do if I was HP. Ready for it? Sell it cheaper. A LOT cheaper.

There are a bunch of folks -- a large amount of folks -- that have not jumped into the tablet world yet because they just don't have $450+ to burn on a tablet, whether it's an iPad 2 or a half-assed Android Honeycomb 3.x-based competitor.

These folks want something cheaper. It's a huge untapped market that Apple and even its Taiwanese, Korean and Chinese frenemies are going to find difficulty reaching, at least for the time being.

Here's the problem -- The BOM on something like the iPad 2 is estimated to be around $325, according to research firm iSuppli.

That's a conservative estimate, since Apple is known to be very adept at managing supply chain costs and purchases a lot of its own inventory up front, so it's probably getting better discounts on consumer electronics components than most if not all of its competitors.

However, let's just say for the sake of argument that the HP TouchPad costs somewhere between $280 and $310 to produce.

I'm reducing manufacturing costs because I'm assuming it's a less difficult device to manufacture than iPad 2, and HP won't have a problem getting components out of Asia that Apple hasn't otherwise cornered the market on.

If the BOM is around $300, then HP doesn't have a lot of leeway on pricing. Getting it out into the channel at $350 would allow HP to get its name out there, and secure a decent amount of market share, but they wouldn't make a ton of money on the devices.

They'd have to get it on the back-end with their app ecosystem, or have some value-added integration with other HP products or compelling Cloud service to go with it.

Honestly, what I'd be really thinking about doing now is getting a 7" version of the device out, and quickly. And pricing it so that it would be a knockout blow to RIM's PlayBook and a large portion of the Android tablet wannabes: $299.

A 7", cheaper TouchPad would do a number of things. First, it would add a key market differentiator to iPad and the Honeycombs, which are larger devices.

Second, it would take away any of the perceived advantages with RIM's PlayBook, as it would have comparable performance, it would cost less, and HP would be able to truly market it as the "Executive" iPad, which the PlayBook was supposed to be.

And unlike RIM's tablet, it wouldn't have the PlayBook's BlackBerry handset co-dependency issues.

In addition to releasing a cheaper TouchPad, I would also corner the market on productivity apps for Tablets. This week, I learned that QuickOffice will be releasing a port to WebOS around the TouchPad's launch time.

If HP purchased QuickOffice, it could kill the iOS and Android versions (a product which has been preloaded on over 30 million Android handsets) and keep the technology to itself, much like RIM did with DataViz's Docs to Go.

[Note: Docs to Go still ships on other platforms besides PlayBook, but it's my guess that all of the development is currently being poured into QNX right now.]

Of course, HP won't do any of these things, because it makes too much sense. I expect the TouchPad to hit the market like a lead balloon. If the HP TouchPad is the "Last Stand" for iPad competitors, I fear that it is more likely to be a Last Whimper.

Is HP's TouchPad going to be Dead on Arrival? Talk Back and Let Me Know.

See related coverage:

Topic: Hewlett-Packard

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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145 comments
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  • RE: HP's TouchPad: Dead on Arrival

    Well, there's no use arguing with someone when they turn out to be right. Jason's spot-on. People underestimated Apple again on iPad. The time to have acted was when netbooks were starting their little boom.

    Of course the market will become more democratic, but Apple will own the mindshare. Even today many people still refer to photocopiers in general as Xeroxes. Same with tablets, or should they be called Pads?
    ShamooToo
    • RE: HP's TouchPad: Dead on Arrival

      @Angrypug Not sure I'd say he's right. His concerns are a bit suspect... bigger battery = less efficient? C'mon, now. Even more importantly: HP is not aiming to unseat the iPad with the TouchPad. If the metric of success/failure is based on that, then we should all just call it a day right now. HP is squarely aiming for a solid 2nd place with the TouchPad, with room to grow in the future. HP is a very methodical company and runs marathons, not sprints. Only time will tell how this pans out, but again it's foolish to call this a sales footrace with the iPad2.
      vara411
      • Message has been deleted.

        DDERSSS
      • RE: HP's TouchPad: Dead on Arrival

        @vara411 - HP has run a number of "marathons" over the years and lost most of them. Remember the PDA, the HP camera line, and the HP TV sets? All dead and gone, even after HP tried kept them around for years. How about HP MP3 players? Phased out in favor of an HP-branded iPod that also failed. Then there was the HP home theater system that shipped a few hundred units before it was quickly killed. <br><br>What's really sad is that I think that someone at HP knew all this, and still chose to come out with an also-ran product. That's the real failure.
        terry flores
      • @ DeRSSS: But how is the experience?

        @vara411

        WebOS is actually nice to use. I have friends that sear by it and will bet dollars to donuts they will pick one up. WebOS demographics are closer to iOS demographics in the users are willing to actually pay for content. This will help.
        Bruizer
      • RE: HP's TouchPad: Dead on Arrival

        @vara411
        It is a goner. many types of droids tried it from all corners and couldn't move iPad2 a bit. If someone is going for entry level Tablet, they look at entry level iPad 2 instead of entry level at $499 for hp Touch Pad. And entry level iPad2 and iPads sold more than any other tablet (including other configurations of iPads and clones with Android OS) in the market since its introduction. The advantage of iPad vs. the rest is the availability of apps, battery life and the mostly the content. They have every type of bookstore + iBooks. I am not saying Androids doesn't have bookstores, but the experience on them will not be equaled with iPad. iPad experience is one thing that Android didnt get it right, even though they borrowed most of it. They should have gone with different type of UX instead of copying others. Look at Microsoft they just redid the experience totally with a different style instead of copying. Google should have done that. They got a chance with Honeycomb and just screwed it. WebOS is powerful, but I am not sure hp knows how to use it properly. They should have just made it available for $399 for an entry level tablet. That would have made entry level consumers to look for it eventhough it misses apps and sucks at battery life.
        Ram U
    • RE: HP's TouchPad: Dead on Arrival

      @Angrypug

      Well he stated in this article:

      "There is absolutely nothing this product has that could be considered an advantage "

      Which is absolutely not true. Anyone who has used WebOS can tell you that it's not only light years ahead of iOS but light years ahead of Android and BB OS as well. It's easy, elegant and fast. That is its biggest advantage. Obviously the lack of apps is its biggest problem at this point. However, you can't neglect the power that HP has. Imagine that they bundle Touchpads with computers at a significant discount? Imagine if they forge partnerships and even allow WebOS on non-HP devices. I think that HP has something bigger planned at this point. Will they ever be as big as Apple's iPad/iPhone? Probably not - but I for one am excited to see what they offer.
      southflguy
      • An OS is not the only factor on a tablet.

        @southflguy Lets put it this way, Android tablets have 1000 times the eco-system that WebOS has today and they are failing miserably.

        WebOS is only an advantage when it has a real and strong eco-system. Maybe 10 years ago, WebOS had an eco-system ... today all they have is a name.
        wackoae
      • RE: HP's TouchPad: Dead on Arrival

        @wackoae. How ignorant to say webOS had an eco-system 10 years when webOS did not exist. Get your facts straight, you probably have not used webOS and you are posting your opinion.
        riceldi
      • RE: HP's TouchPad: Dead on Arrival

        @southflguy <br><br>Let's stipulate that it is light years ahead, which I doubt. Here is your problem. It is isn't light years ahead in any menaingful way. People don't care about "true multitasking". All people want to do is run music and browse and get that chime that says email has arrived. And one they check email, go back to the book or page they were browsing and have it come back to the right spot.<br><br>iOS does this. Almost no one cares about being able to run a video while browsing email. WebOS isn't any faster with respect to the GUI. It doesn't have the content, it doesn't have the third-party support, it doesn't even have the history. At best, people would go, "What's a Pre?"<br><br>I say this a a 16 vet of software development in java,C/C++ and C# with experience on wide range of RDBMS including Oracle, DB2, SQL Server and Postgres. I'm an expert and I still like and use iOS.<br><br>WebOS, I don't think, won't be a factor. The problem is that there is no tablet that does it better than the iPad in enough ways to make them compelling to people outside of the truly ideology driven and the truly ideology driven people either lack the numbers or the willingness to put their money where there mouth is.
        dhmccoy
      • RE: HP's TouchPad: Dead on Arrival

        @dhmccoy - Interesting - I was thinking about this very concept just this morning. You make a great point about the fact that maybe it doesn't matter whether a product is "better" if it's not better in a way that matters to people (betamax, anyone?).

        I am a die-hard webOS user/fan, so I am not disparaging webOS in any way, shape, or form--just trying to logically consider the evidence. The reason *I* was attracted to webOS is twofold: (A) The OS just seems to "think" like I do--I just "got it" from day one with not more than a 5 minute instructional session (I consulted the forums for more advanced stuff, but you get the point). This is something that I can't necessarily use to sell it to other people, because not everyone thinks like me, so others may not feel that the OS "thinks" the way they do. (B) Unlike a good many people, I actually *LIKE* the form factor of the Pre (-/+/2). I don't like holsters, so I carry my phone in my front pocket. This is one of the most pocketable phones of all time, and that was very important to me. I have grown accustomed to it enough that I could handle a little larger unit, but the general shape is comfortable, and also I am one of those people for whom a hard keyboard is a must--and I love the portrait slider concept.

        That being said--I think the author is absolutely correct on competing with Apple. The manufacturers must face hard truths, one of which is that Apple OWNS the tablet space--all the mindshare belongs to them. If you don't assess your situation properly, you won't be able to develop a strategy that works. Facing the fact that Apple is the king of the tablets, the most effective (and only?) way to get people to look your way is through a low price point. It's the pricing equivalent of a woman showing some skin--sure, she may not be the *most* beautiful woman in the room, but if she's at least attractive, showing some skin will get her more looks than the turtleneck-wearing supermodel. Had the shown some skin early on by using some cut-throat pricing, HP would probably be in a different situation at this point.
        Big Daddy D
    • RE: HP's TouchPad: Dead on Arrival

      @Angrypug Why does everyone come at this as having to be an ipad killer. why must we always have to set our sights to kill? and when it comes to items that HP stepped out of, what company hasn't ? The tablet is a long play market, this is not the netbook market. the pads will last and evolve and morph into so many other devices. The real market is only just starting. If we go back in history.... where would we be if Thomas Edison gave up after a few tries ? if you remember we did have light before the development of the thing they called the light bulb, by the same analogy, should he had given up because the gas light was in existence ? Should Google have staid out of I.E.'s way ? Should Google have even tried to make its own operating system ? 3 years ago, would you have bought an Android phone?

      If you have tried webOS, it has some fantastic qualities. The journey of a thousand leagues starts with but just one foot step...and if we had refused to take those steps in the past, where would we be now ? We have a player in the market with a great and solid new O/S, if you have tried developing for it, you will see it is an easy start up, with great support. HP has offered a new product to developers with an O/S that is also open to any developer to play and create, and I think that is pretty darn great in a world with people trying to control development and kill open source. It doesnt take much to turn the industry on its ear. But depends on your views, is the glass half empty?.... or half full? for me, I just want to get busy and develop, and choice is a good thing. I think we have a solid product, with great potential, I am looking forward to seeing the market evolve, and for those who wish part of it, we can. The rest can sit back and poke holes. Mr Clemens reported that "The news of my death has been greatly exaggerated."
      relkind
      • RE: HP's TouchPad: Dead on Arrival

        @relkind I may have missed it but who is talking about this having to be an iPad killer? HP most definitely has the potential for success here but the point of the article still stands, it's going to be hard to be a big success pricing the same as the iPad without giving advantages that the average user is going to want. You and many others might prefer webOS but is that enough to make is a success, time will tell.
        non-biased
  • RE: HP's TouchPad: Dead on Arrival

    This is exactly the same way the PC market matured, almost exactly. Apple had the GUI OS first, then Windows came about, people called it DOA and then it crushed Apple.

    In other words, while you may be right, far far too early to tell. The market is 2 years old, regardless of how long the tablet pc has been out.
    hoaxoner
    • RE: HP's TouchPad: Dead on Arrival

      @hoaxoner

      Perhaps? That was said in 2003 about the 'then' 2 year old 'credible' digital file format media player market, made credible by our Cupertino Fruit Co. How did that go, almost 10 years later?

      Truth is likely something in between will happen, but Apple will remain the dominant player and prime mover for quite some time. Also, unlike the PC market this is a market consumers really care about and Apple has nailed their requirements beyond expectation. The bar is high and it's set by apps & services integration.
      ShamooToo
      • RE: HP's TouchPad: Dead on Arrival

        @Angrypug
        People said the same thing about the iPhone my friend. Only 2 years and only 26 million tablets sold is nothing to overcome. Most people cant even see a need for a tablet when they already have a smartphone. This market is far from being solidified by Apple.
        timotim
      • RE: HP's TouchPad: Dead on Arrival

        @Angrypug
        The device was not the primary mover of the media player market, it was the media market -- iTunes. iTunes was really only compatible with the iPod, or at least so people thought so people bought the iPod. The iTunes dominance is eroding and so too is Apple's. Especially because iTunes has become so bloated people don't want it on their machines anymore.
        hoaxoner
      • RE: HP's TouchPad: Dead on Arrival

        @Angrypug

        When I look back on the digital music scene, I really think of Creative Labs. They were about to release a new line of MP3 products when Apple managed to get a deal (which Creative Labs had been working on) for the hard drives that were in the original Ipod.

        Regardless, I remember the Nomad Jukebox, Zen, etc... expanding the digital music market before Apple weighed in.

        Apple has done a brilliant job of marketing and certainly expanding the digital music scene. I agree with some of these comments already made that iTunes is seriously bloated and I do not like using it, so I use a 3rd party program to sync my iPhone.

        I do not see Apple as being the clear winner in the tablet market, and sometimes being the first player in the game ends up being a downfall. I have seen a handful (and then some) of amazing tablets with Android and windows on them. Let's wait and see how it all turns out.
        Fan_of_Tech
      • RE: HP's TouchPad: Dead on Arrival

        @timotim

        Big difference between the iPhone and 2007 and the iPad 2 and 2011. When the iPhone out the App Store didn't exist and AT&T was the only carrier plus it was expensive. When the iPhone 3G came out, there was already "clone" smartphones running Symbian and WinMo dubbed "iPhone killers" and buzz about Android (plus AT&T still was the only pony show in town). With the iPad, Apple has already sold "only" 26 million and competitors are dropping left and right with their "iPad killers" except this time Apple has a BIG headstart with the App Store and iOS familiarity plus it's carrier neutral with the WiFi model hitting $499. I'd disagree with the notion that Apple hasn't solidified the market for tablets.
        jmiller1978
      • RE: HP's TouchPad: Dead on Arrival

        Here's a scary thought: Apple have an even stronger hand to play in this market than they ever did in the decade of iPod+iTunes. A much stronger ecosystem. The #1 music/media store. #1 App Market. #1 earning. An insane accessory and aftermarket, market. Apple's own Mac developers developing solid iLife apps for iOS. Something you won't find on other platform. They control the supply chain by investing early and big. And even with their lead they continue to do what no other is able to, that's investing in a new development plant in Brazil. Tell me when another competitor is putting in the same effort.<br><br>One thing to remember is the tablet is not the phone market. With the slow sales of competing tablets I think it's becoming apparent.
        dave95.