Uh, you have to sell the thing first, in order to get any app revenue. You do understand this, right?
Yes, hence the sell it at cost thing. They went straight to 100 from the original price and it sold like crazy, if it was the first big tablet at 200 ish I'm sure it would have sold well too.
We don't see many explanations from the "Android kicks iOS' butt" crowd as to why Android tablets can't seem to get off the ground. They seem happy to stick to the smartphone market share argument for some reason. They also don't seem too enthused to compare total iOS vs Android device market share either. "An inconvenient truth" to quote a former VPOTUS?
I'm a Android user but not a fandroid and do not get into childish arguments of iOS vs Android but I will say this Android tablets are at best a joke. They were rushed out too quick because of the iPad. I will get a Galaxy Nexus but I will also get an iPad as my tablet.
Yes, hence the sell it at cost thing. They went straight to 100 from the original price and it sold like crazy, if it was the first big tablet at 200 ish I'm sure it would have sold well too.
They would have to sell a shitload of apps and dev tools to make it worthwhile to sell at cost and expect to have a viable business on the back end.
What you are proposing isn't ridiculous. It is exactly them model Amazon is trying with the Kindle Fire. Sell the device at cost and make it up on the backend with content. But selling content is one of their core businesses, so it makes sense for Amazon. Breaking even (or a little less) on hardware is ok for them, since they make their money on content anyway and the hardware is then just a control avenue to encourage that revenue stream, through sales of app and movies and music and ebooks and subscriptions and cloud services. RIM (and HP with the Touchpad) had/have no such infrastructure or agreements to make that a viable business model for them. Very few companies have the scale, infrastructure, agreements and experience to even try. Apple would be the most obvious, but they do well enough not having to sell their devices at a loss. Amazon is going to try, we'll see how it works for them. Maybe Google and MS and possibly Sony have the pieces in place to even think of trying this. Can't think of any other companies that could even try with any hope of viability. Certainly not HP or RIM.
What's amazing is that anyone is surprised, including RIM. They released a tablet that had to be tethered to a blackberry, didn't support their messaging/e-mail service natively, had an inferior screen and user experience, and was priced like an iPad. Oh, but it ran flash. Got it.
However, RIM has reiterated that it is committed to the PlayBook, and the company remarked that deep discounts on the hardware, selling it for as little as $199, have spurred sales.
They were selling it as low as $99 to staff this week, with a limit of 5-10 per employee depending on which model. This in turn spurred a sudden demand of people looking for RIM employees across Canada to buy them. I expect they probably moved another 50-100k this week through the staff promo, but that was at significant loss.
Between HP and RIM, the expected price consumers will pay for non-iPad tablets is being pushed to insanely low prices. Now that the bar has been set twice, as to what price will actually result in sales, the other manufactures have all got to be thinking it's time to get out of dodge.
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
At least, the naysayers say so, so it's probably right.
My comment regarding "beleaguered" was a sly reference to the '90s when you couldn't read an article without that adjective describing Apple; they went together like peanut butter and jelly.
In fact, old guys like me refer to the 1990s as "the beleaguered years".
Oh man. Canada has had a rough go of it in the tech industry. When I was taking electrical engineering in university back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling for the great white north. But it looks like big brother south of the border has given little brother north of the border a big can of whoop-ass. No wonder Canadians always have this inferior complex when compared to their neighbour.
Oh man. Canada has had a rough go of it in the tech industry. When I was taking electrical engineering in university back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling for the great white north. But it looks like big brother south of the border has given little brother north of the border a big can of whoop-ass. No wonder Canadians always have this inferior complex when compared to their neighbour.
Yeah, but you aren't going broke trying to pay for your healthcare.
While that is technically correct (the inventory provision is non-cash), it's worth pointing out that there was plenty of cash wasted - the cash to buy components and pay for assembly.
Quote:
Originally Posted by tipoo
Considering that, maybe the Touchpad firesale wasn't as bad a decision as we thought. I still think it could have done ok if sold at-cost and the money was made up with dev tools and app revenue though.
I still think the Touchpad sale was a bad move. Not the discount to clear them out, the the size of the discount. Tons of people (including me) made a bunch of money by buying $99 and $149 Touchpads and selling them on eBay for $200-300. If HP had dropped them to $199 and $249 (or even $149 and $199), they would still have sold all of them but had tens of millions of dollars smaller loss.
Quote:
Originally Posted by Tallest Skil
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
At least, the naysayers say so, so it's probably right.
I think you have it backwards. Apple is 'beleaguered'. It was nearly impossible to read an article about Apple in the 90's and early part of this century that didn't use that term.
Quote:
Originally Posted by Tulkas
They were selling it as low as $99 to staff this week, with a limit of 5-10 per employee depending on which model. This in turn spurred a sudden demand of people looking for RIM employees across Canada to buy them. I expect they probably moved another 50-100k this week through the staff promo, but that was at significant loss.
Between HP and RIM, the expected price consumers will pay for non-iPad tablets is being pushed to insanely low prices. Now that the bar has been set twice, as to what price will actually result in sales, the other manufactures have all got to be thinking it's time to get out of dodge.
RIM hasn't panicked as bad as HP. First, the PlayBook is inherently less attractive due to its more limited feature set and need to be paired with a RIM phone for full functionality. Second, they didn't cut the prices as much as HP did - a special deal for employees isn't the same as offering $99 across the board to the whole world.
RIM hasn't panicked as bad as HP. First, the PlayBook is inherently less attractive due to its more limited feature set and need to be paired with a RIM phone for full functionality. Second, they didn't cut the prices as much as HP did - a special deal for employees isn't the same as offering $99 across the board to the whole world.
Correct, RIM has shown more restraint in their pricing, but they are still selling it at or below cost when selling it at $200 to the public. That sets the bar far below profitability for tablets in general, excluding the iPad. As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.
I smell a shareholder lawsuit coming. Two quarters ago they were committed to earning $7.50 per share, and now they admit they won't even get to $5.25.
Comments
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
I always thought it was FedEx --
http://www.youtube.com/watch?v=NmZRDUO1wGQ
Uh, you have to sell the thing first, in order to get any app revenue. You do understand this, right?
Yes, hence the sell it at cost thing. They went straight to 100 from the original price and it sold like crazy, if it was the first big tablet at 200 ish I'm sure it would have sold well too.
We don't see many explanations from the "Android kicks iOS' butt" crowd as to why Android tablets can't seem to get off the ground. They seem happy to stick to the smartphone market share argument for some reason. They also don't seem too enthused to compare total iOS vs Android device market share either. "An inconvenient truth" to quote a former VPOTUS?
I'm a Android user but not a fandroid and do not get into childish arguments of iOS vs Android but I will say this Android tablets are at best a joke. They were rushed out too quick because of the iPad. I will get a Galaxy Nexus but I will also get an iPad as my tablet.
Yes, hence the sell it at cost thing. They went straight to 100 from the original price and it sold like crazy, if it was the first big tablet at 200 ish I'm sure it would have sold well too.
They would have to sell a shitload of apps and dev tools to make it worthwhile to sell at cost and expect to have a viable business on the back end.
What you are proposing isn't ridiculous. It is exactly them model Amazon is trying with the Kindle Fire. Sell the device at cost and make it up on the backend with content. But selling content is one of their core businesses, so it makes sense for Amazon. Breaking even (or a little less) on hardware is ok for them, since they make their money on content anyway and the hardware is then just a control avenue to encourage that revenue stream, through sales of app and movies and music and ebooks and subscriptions and cloud services. RIM (and HP with the Touchpad) had/have no such infrastructure or agreements to make that a viable business model for them. Very few companies have the scale, infrastructure, agreements and experience to even try. Apple would be the most obvious, but they do well enough not having to sell their devices at a loss. Amazon is going to try, we'll see how it works for them. Maybe Google and MS and possibly Sony have the pieces in place to even think of trying this. Can't think of any other companies that could even try with any hope of viability. Certainly not HP or RIM.
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
Correct. Apple is doomed.?
I will get a Galaxy Nexus but I will also get an iPad as my tablet.
That seems somewhat inefficient from the standpoint of managing/using/enjoying your content, but whatever.....
But...but...it runs flash! I thought people would be lining up to buy it after experiencing the flash-less horror that is the iPad!
Next.
What....My iPad does not run Flash.....Back to the Apple Store!!!
However, RIM has reiterated that it is committed to the PlayBook, and the company remarked that deep discounts on the hardware, selling it for as little as $199, have spurred sales.
They were selling it as low as $99 to staff this week, with a limit of 5-10 per employee depending on which model. This in turn spurred a sudden demand of people looking for RIM employees across Canada to buy them. I expect they probably moved another 50-100k this week through the staff promo, but that was at significant loss.
Between HP and RIM, the expected price consumers will pay for non-iPad tablets is being pushed to insanely low prices. Now that the bar has been set twice, as to what price will actually result in sales, the other manufactures have all got to be thinking it's time to get out of dodge.
The appropriate term, I believe, is "death spiral".
I thought it was "beleaguered".
Dropped like an elephant turd!
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
At least, the naysayers say so, so it's probably right.
My comment regarding "beleaguered" was a sly reference to the '90s when you couldn't read an article without that adjective describing Apple; they went together like peanut butter and jelly.
In fact, old guys like me refer to the 1990s as "the beleaguered years".
In fact, old guys like me refer to the 1990s as "the beleaguered years".
Yep, I remember that. Good times.
Oh man. Canada has had a rough go of it in the tech industry. When I was taking electrical engineering in university back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling for the great white north. But it looks like big brother south of the border has given little brother north of the border a big can of whoop-ass. No wonder Canadians always have this inferior complex when compared to their neighbour.
Yeah, but you aren't going broke trying to pay for your healthcare.
Yeah, but you aren't going broke trying to pay for your healthcare.
Actually... yes we are.
RIM doesn't have a monopoly on incompetence up here...
The mostly non-cash inventory provision
While that is technically correct (the inventory provision is non-cash), it's worth pointing out that there was plenty of cash wasted - the cash to buy components and pay for assembly.
Considering that, maybe the Touchpad firesale wasn't as bad a decision as we thought. I still think it could have done ok if sold at-cost and the money was made up with dev tools and app revenue though.
I still think the Touchpad sale was a bad move. Not the discount to clear them out, the the size of the discount. Tons of people (including me) made a bunch of money by buying $99 and $149 Touchpads and selling them on eBay for $200-300. If HP had dropped them to $199 and $249 (or even $149 and $199), they would still have sold all of them but had tens of millions of dollars smaller loss.
No, no, Apple is doomed. They have exclusive rights to being 'doomed'.
At least, the naysayers say so, so it's probably right.
I think you have it backwards. Apple is 'beleaguered'. It was nearly impossible to read an article about Apple in the 90's and early part of this century that didn't use that term.
They were selling it as low as $99 to staff this week, with a limit of 5-10 per employee depending on which model. This in turn spurred a sudden demand of people looking for RIM employees across Canada to buy them. I expect they probably moved another 50-100k this week through the staff promo, but that was at significant loss.
Between HP and RIM, the expected price consumers will pay for non-iPad tablets is being pushed to insanely low prices. Now that the bar has been set twice, as to what price will actually result in sales, the other manufactures have all got to be thinking it's time to get out of dodge.
RIM hasn't panicked as bad as HP. First, the PlayBook is inherently less attractive due to its more limited feature set and need to be paired with a RIM phone for full functionality. Second, they didn't cut the prices as much as HP did - a special deal for employees isn't the same as offering $99 across the board to the whole world.
back in the early 90's, a dream job would have been to work for Nortel. Then in early 2000, RIM became the next tech darling
Now it is Apple's turn.
RIM hasn't panicked as bad as HP. First, the PlayBook is inherently less attractive due to its more limited feature set and need to be paired with a RIM phone for full functionality. Second, they didn't cut the prices as much as HP did - a special deal for employees isn't the same as offering $99 across the board to the whole world.
Correct, RIM has shown more restraint in their pricing, but they are still selling it at or below cost when selling it at $200 to the public. That sets the bar far below profitability for tablets in general, excluding the iPad. As I said, between HP and RIM selling at or below cost (and Amazon now too) the price consumer are willing to pay is dropping for all tablets that aren't iPad. That has to make the other manufacturers wonder whether it is worth playing anymore.