HP makes $100 TouchPad price cut permanent in bid for No. 2 spot in tablet space

Posted:
in iPad edited January 2014
After receiving positive response to a temporary $100 price cut on its webOs-based TouchPad tablet, HP has decided to make the discount permanent as it aims for the No. 2 spot in the tablet market, behind Apple's iPad.



HP Senior Vice President Stephen DiFranco issued an email announcing the price cut would take effect immediately, "enabling both HP and [its] channel partners to be even more price competitive in the marketplace," as noted by This is my next. The 16GB Wi-Fi TouchPad is now priced eat $399.99 and the 32GB version at $499.99.



According to the executive, the price drop will supersede any other discounts, such as a current $50 instant rebate offer in the U.S. Early adopters who purchased the TouchPad before the discount will be eligible for a $50 credit toward applications in the device's App Catalog.



DiFranco also highlighted the fact that HP released the first over-the-air update for webOS 3.0 last week in North America and Europe. The update resolves a number of issues that the device launched with and is the first of a "steady stream of improvements to optimize TouchPad performance."



The company launched the sale over the weekend, just one month after the device's release. HP has yet to release sales numbers for the tablet, but industry watchers suspect that it has performed worse than expected.







Early reviews of the TouchPad, which features a 9.7-inch touchscreen and a Qualcomm Snapdragon dual-core 1.2GHz processor, characterized it as unfinished and "mediocre," though they did praise the webOS interface as "attractive and different."



HP executive Jon Rubenstein responded to the negative reviews by comparing webOS to Mac OS X, quoting early reviews of Apple's software that called it "sluggish," lacking "quality apps," and "just not making sense."



"It's hard to believe those statements described Mac OS X -- a platform that would go on to change the landscape of Silicon Valley in ways that no one could have imagined," he said in a letter to employees, adding that webOS has the "potential for greatness."



HP has said that its goal is to take second place in the tablet market, rather than compete with Apple for the top spot. ?We think the world of Apple and have the utmost respect for their products,? said vice president Richard Kerris. ?It would be ignorant for us to say that we are going to take it [the market] away from Apple.?



Analysts have warned that iPad competitors are having trouble keeping costs down because they can't match Apple's design efficiency. IHS iSuppli estimates that the bill of materials for the 16GB Wi-Fi TouchPad runs $318, compared to an estimated BOM of $310 for the iPad 2 3G. Forrester analyst Sarah Rotman Epps said on Tuesday that iPad competitors may stand a better chance in Europe, while noting that they will need to cut their prices in order to take on Apple.



Apple itself has indicated that it was "purposefully aggressive" in pricing the iPad, which has lower profit margins than the iPhone.



"Our potential competitors [in tablets] are having a tough time coming close to iPad's pricing. iPad incorporates everything we've learned about building high value products," Apple CEO Steve Jobs said last October. "We create our own A4 chip, software, battery chemistry, enclosure, everything. This results in an incredible product at a great price. The proof will be in the pricing of our competitors' products, which will offer less for more."
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Comments

  • Reply 1 of 99
    HP suddenly realized that they were charging more than their iPad and Android competition on the market.
  • Reply 2 of 99
    aizmovaizmov Posts: 989member
    webOS has the potential for greatness, not only on smartphones and tablets but it could also work on notebooks and desktops, however does HP has the will to see it through?

    I really wish HP all the success with the TouchPad, it could have been much better but they fell short, the hardware is just too plasticky and flimsy.
  • Reply 3 of 99
    mactelmactel Posts: 1,275member
    So while HP lowers their prices competing with existing iPads Apple will release the next generation in the coming months raising the bar maintaining the price position.



    In the meantime iOS 5.0 will come-out in next month improving the usability experience.



    Personally, at this point I'd choose the iPad over any other device.
  • Reply 4 of 99
    deh2kdeh2k Posts: 6member
    Although they're probably selling it for a loss, I expect they plan to make up for it in added volume.
  • Reply 5 of 99
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by deh2k View Post


    Although they're probably selling it for a loss, I expect they plan to make up for it in added volume.



    I fail to see how selling a product at a loss per unit can be made up "in volume".
  • Reply 6 of 99
    ash471ash471 Posts: 705member
    Quote:
    Originally Posted by Tallest Skil View Post


    I fail to see how selling a product at a loss per unit can be made up "in volume".



    The materials costs are lower than the sale price so theoretically they may turn a profit with sufficient number of sales. Although $80 isn't very much to work with, especially if they want to sell through any retailers.
  • Reply 7 of 99
    Quote:
    Originally Posted by deh2k View Post




    Although they're probably selling it for a loss, I expect they plan to make up for it in added volume.



    That only works for the XBox and PS3.



    Microsoft and Sony make it up in licensing fees for those $50 games... and game consoles have a lifespan of 5 years or more.



    For a company like HP that is 99% reliant on hardware sales?



    No way. Selling at a loss is a last resort to clear inventory...
  • Reply 8 of 99
    sflocalsflocal Posts: 4,652member
    Quote:
    Originally Posted by deh2k View Post


    Although they're probably selling it for a loss, I expect they plan to make up for it in added volume.







    I think that's what everyone else is doing too!
  • Reply 9 of 99
    So it's come down to a race for #2?
  • Reply 10 of 99
    Quote:
    Originally Posted by Aizmov View Post


    webOS has the potential for greatness, not only on smartphones and tablets but it could also work on notebooks and desktops, however does HP has the will to see it through?



    I heard the HP is planning to incorporate WebOS in pretty much every product that they sell, from notebooks to printers. If they do it, ther will be tens of millions of WebOS products in the wild.



    I really hope that they come through.
  • Reply 11 of 99
    dluxdlux Posts: 666member
    Gee, who didn't see this one coming?



    Nice feint, HP.



    (Having said that, I agree with Aizmov. Apple needs good competition to keep it moving, and WebOS is just that, given the chance. I think Android tablets are inevitable, so we can count on those, warts and all. But I would much prefer to see WebOS in this space than anything from Microsoft at this point. They've blown their chance to be good competitors in the tablet space.)
  • Reply 12 of 99
    I hate to see Palm go down in flames, but I have serious doubts about HP understanding the consumer market, and bringing a quality product along with a great ecosystem, such as Apple has accomplished.

    Are we going to see a multimedia powerhouse like iTunes, or the 3rd party support available anywhere you go for an HP tablet? Not likely.

    I wish them luck, but I won't be helping them get there.
  • Reply 13 of 99
    Quote:
    Originally Posted by Michael Scrip View Post


    That only works for the XBox and PS3.



    Microsoft and Sony make it up in licensing fees for those $50 games... and game consoles have a lifespan of 5 years or more.



    For a company like HP that is 99% reliant on hardware sales?



    No way. Selling at a loss is a last resort to clear inventory...



    Umm....errr...no. They could sell at a loss to gain market share or at the very least gain respectability. They don't need to make a profit with this iteration, there are other generations of TouchPad or more importantly webOS to think about.

    Look at Sony with their Alpha line of cameras. Came out of no where, bought Minolta, then sold their first DLSR's at a loss just to gain market share...and guess what? It worked. They jumped from nothing straight to 3rd place hopping over camera giants (of yesteryear) Pentax, Olympus etc. etc. HP could, and frankly should do the same.
  • Reply 14 of 99
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by AppleLover2 View Post


    I heard the HP is planning to incorporate WebOS in pretty much every product that they sell, from notebooks to printers. If they do it, ther will be tens of millions of WebOS products in the wild.



    I really hope that they come through.



    Well it's not like people will be buying Apps for their printers. WebOS on printers may improve the UI on multifunction devices, but it won't increase the size of the platform anymore than iOS in ATV currently does.
  • Reply 15 of 99
    WebOS is pretty nice, though I haven't played around with the TouchPad itself (only the Palm Pre). If only the hardware was as nice as the software. I wish them luck.
  • Reply 16 of 99
    Quote:
    Originally Posted by AppleLover2 View Post


    I heard the HP is planning to incorporate WebOS in pretty much every product that they sell, from notebooks to printers. If they do it, ther will be tens of millions of WebOS products in the wild.



    I really hope that they come through.



    Yes! that is the future! Seamless change (to the user) regardless of whether they are driving a truck or a sportscar (ATV, SkiDoo, SkateBoard, etc.)... And all that younger generation stuff I don't understand.
  • Reply 17 of 99
    nvidia2008nvidia2008 Posts: 9,262member
    Let the race to the bottom begin! Muah ha ha ha iPad will be unstoppable through 2012.
  • Reply 18 of 99
    Heck, iPad 1 still rocks. iPad 2 rocks even harder. And iPad 3 is right around the corner. Competitors do not seem to have much of a chance. Maybe the competitors could switch over to a new product, like washing machines. But imagine, just imagine, if Apple started designing cars! They would be the most efficient and last forever. The only reason to upgrade would be to obtain more efficiency, and longer life.
  • Reply 19 of 99
    If the hardware is good on the HP then is the only problem with the software? Sure a plastic case isn't as good as metal but the insides are what count. Does the touch screen work well and look good? If it does and the internals are made of quality parts the the Touchpad will be a great device once the software is improved.
  • Reply 20 of 99
    Quote:
    Originally Posted by MikeSmoke View Post


    But imagine, just imagine, if Apple started designing cars! They would be the most efficient and last forever. The only reason to upgrade would be to obtain more efficiency, and longer life.



    Umm...if they did that, that would be the dumbest thing they have ever done. No one would design a car that would last forever...would would buy a new one then? Just for efficiency? Features? If the cars were dirt cheap then maybe but at a starting price of 10K? No way...
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