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.
What good is market share? Bragging rights?
I see what you're saying... sell a couple million at a loss to gain mindshare with customers... but that doesn't really work with these kind of electronics.
It works with game consoles because you gotta buy games for them... that's kinda what they're for. And like I said... game consoles are on the market for years.
But cell phones, computers, tablets... no one sells them at a loss.
(Having said that, I agree with Aizmov. Apple needs good competition to keep it moving...
right... Because they've stood still for the first nearly two years of zero competition.
This old "they need competition to keep them on their toes" thing gets trite after a while.
Apple makes great products because it's what they do. Jobs built a company in his perfectionist image. THATS what drives them, not incompetent, stumbling footsteps far behind them.
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.
HP's handling of Palm is like a Gorilla with an iPhone. (OMG too many puns in this sentence)
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...
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
I fail to see how selling a product at a loss per unit can be made up "in volume".
Economy of scale could make up a bit but I'd wager HP is just trying to get a user base going so it can then get developers which will give an ecosystem for which it can make the TouchPad a viable option.
To be fair, i'd like to read an updated review of TouchPad with its updated OS. to see if they fixed the fatal flaws at least. i'll look around ...
and no doubt HP will release a new model that is slimmer and lighter, its hardware fatal flaw. but when?
too soon to write them off tho.
but yes, this price cut is obviously needed to unload the unsold inventory of the V.1 TouchPad. their problem is, the race to the bottom with all the Android tabs is now well underway, including them. and it's going to get worse for the Holiday season! they won't ever be able to bring the price of their improved V.2 model back up to iPad levels like they hope.
HP really needs to focus on the enterprise market. they could take over RIM's spot there if they put it all together. but they have to hurry up. if they don't, next year some one else will.
HP brings an interesting mix to the fray. They are behind Google in development and their phone business is almost non-existant, despite being in the market for quite some time. However, HP has enormous potential for manufacturing and distributing tablets. And, like Apple they have a combined hardware-software approach.
Google has the opposite problem. They are further along in development (but not quality) and they have really good phone distribution. However, they have horrible prospects for tablet distribution. Google distributes through cell phone providers. When was the last time you logged onto ATT.com to buy a computer? And, the cell phone manufacturers have no experience making and selling PCs or the peripherals that go with them. Google also has a major problem with hardware optimization because their software isn't integrated, which means their software always feels half-baked when it is released. To boot, Google is under immense pressure from IP litigation and since they don't sell a product, they have to pass through the licensing costs.
Microsoft has different problems. MS is really behind in development and MS takes an eternity trying to integrate software with their partners hardware (with mediocre success). However, MS has huge potential to partner with both tablet and phone manufacturers. If you take into account phone and tablet distribution MS is only second to Apple. MS's biggest problem is actually producing a product and making it work on real hardware in a reasonable timeframe. MS is so slow their partners will be selling last years model for the foreseeable future. Their software is so resource intensive a new device will feel like last years model even if it has this years cost.
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
HP has potential, but their problem is that they will get caught in the middle. They can't take the low end becaues there will always be a cottage industry of non-integrated manufacturers that reduce profits to nothing. They won't be able to beat Apple on the high end and they won't be able to beat the malware sold at the low end. At best they help Apple by beating up the low end, which is what is going to happen with the $100 price reduction.
The next quantum leap by Apple is to tie the phone, tablet, and PC together with iCloud (and the iPod). Here again, Apple is the only one poised to make such a move. Apple is the only one with major distribution in phones, tablets, and PCs that can be seamlessly synced.
I predict the move to iCloud is where Apple will leave Google in the dust. Google's approach to the cloud is just dead wrong. Nobody wants to be dependent on an internet connection. They just want their devices synced up (and maybe backed up) when their internet connection is available. Google's cloud is beneficial if you have poor computer performance, and you have a really really fast and reliable Internet connection for all your devices. Apple's Cloud is usefull if you have good computing power and poor internet service. It doesn't take a rocket scientist to figure out who is going to win this one. Google lost before they started.
Interestingly, the cloud is where MS could come back. MS has the capability of partnering with PC, Phone, and Tablet manufacturers. Also, HP is strong in this category because they have the strongest PC precense of anyone and they have an integrated approach. If people demand syncing between all their devices who better than HP to provide an integrated approach. Interestingly, the best positioned competitor right now (Google) looks to be the worst positioned competitor in the cloud wars. All I can say is Google better adapt quickly or they are going to get hammered. Maybe Apple will play its cards correctly and keep HP, MS, and Google at each other's throat while Apple syncs up the world to an array of Apple devices.
Any way you look at it, Apple is the clear winner in the near term. Apple has an integrated approach that gives them speed to market and high performance. Apple has a killer phone, killer phone distribution, a killer tablet, and killer tablet distribution channels and the ability to tie it all together. Apple's biggest risk is that they are conciously choosing not to sell to the low end market. If Apple doesn't sell to the low end market and the low end market subsumes the rest of the market.........good bye Apple. This has nothing to do with who is servicing the low end market (Google or MS). It will simply be the consequence of servicing a market that disappears. Hopefully it won't happen and/or Apple will adapt.
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
I think Apple took a hit on profitability in the hopes that they could make it up on volume. The winners in the PC wars were the volume sellers. I think Apple decided to try it with the iPad. Volume pricing is a really hard thing to do with a high end product and even harder with an allegedly new category of product. Volume pricing is usually a strategy to take with an established market starting with the bottom up. The reason Apple was succesful is because they knew there wouldn't be any competition in the first year. The market was completely Apple's. Capitalizing on their lead was their only chance for market dominance, unless they wanted to compete in the low end. Once you come to this conclusion, the answer is simple. The only way to get volume in the first year of a new product is a rock bottom price. As you may recall, some speculated the iPad would debut at $1,000. The $500 price point was nothing short of shocking.
I'm sure losing the first PC war had a lot to do with the carefully calcuated approach Apple took with the iPad. I don't think it was luck. I think they planned it this way. When Steve Jobs announced the iPad he said it was the most important thing he had done. He obviously had a vision of how things would play out. Most couldn't see it even when he spelled it out for them.
To be fair, i'd like to read an updated review of TouchPad with its updated OS. to see if they fixed the fatal flaws at least. i'll look around ...
and no doubt HP will release a new model that is slimmer and lighter, its hardware fatal flaw. but when?
too soon to write them off tho.
but yes, this price cut is obviously needed to unload the unsold inventory of the V.1 TouchPad. their problem is, the race to the bottom with all the Android tabs is now well underway, including them. and it's going to get worse for the Holiday season! they won't ever be able to bring the price of their improved V.2 model back up to iPad levels like they hope.
HP really needs to focus on the enterprise market. they could take over RIM's spot there if they put it all together. but they have to hurry up. if they don't, next year some one else will.
RIM doesn't have a spot in anything and certainly not the Enterprise market. No business person is going to buy a tablet that doesn't have push email. Seriously, RIM's device was dead on arrival.
I agree, HP is positioned to compete with Apple, but will get beat up from the bottom (i.e., Android malware).
Hey, knock another hundred off and you will even get a more positive response. Make it free, even better yet.
PS:
Mr. Rubenstein it is true OSX at version 10.0 received the pretty poor reviews described (rightfully so). Yet, those reviews largely applied to the Beta, which Apple released publically. About 4 months later, Apple preinstalled 10.0 on new machines, but didn't make it the default. Apple didn't ship OSX as the default on its Macs until over a year after the public beta when it released 10.1 (a massive free update). Even when people were running OSX, they could also run System 9 in emulation and have access to all the prior applications. In a nut shell, customers didn't have to rely on OSX intially. So with all that in mind, what is the default OS on HP Devices?
Quote:
Originally Posted by AppleInsider
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.
Some good points. HP, however, has two other advantages that should not be underrated. First, it has a huge patent portfolio. HP isn't going to get squeezed like Google's hardware manufactures. Eventually there will be a day of reckoning for Android manufacturers. Some might even prefer licensing WebOS from HP, as HP has said it is open to the possibility. Apple will not sue HP as the companies respect each other (HP even sold an HP branded iPod at one point).
Second, HP can take an Apple approach like when Apple released OSX for the first time. It can preinstall WebOS on dual boot computers while having a familiar OS like Windows as the default. That is a huge customer base. This will allow customers to play with the OS and become accustomed to it. Unlike Microsoft, HP can afford a slow start with WebOS.
I see HP as the strongest challenger to Apple if HP can hold it together and play its cards right. With that said, I played with the HP Tablet. Currently, it isn't worth the money even with the discount compared to the iPad.
Quote:
Originally Posted by ash471
HP brings an interesting mix to the fray. They are behind Google in development and their phone business is almost non-existant, despite being in the market for quite some time. However, HP has enormous potential for manufacturing and distributing tablets. And, like Apple they have a combined hardware-software approach.
Google has the opposite problem. They are further along in development (but not quality) and they have really good phone distribution. However, they have horrible prospects for tablet distribution. Google distributes through cell phone providers. When was the last time you logged onto ATT.com to buy a computer? And, the cell phone manufacturers have no experience making and selling PCs or the peripherals that go with them. Google also has a major problem with hardware optimization because their software isn't integrated, which means their software always feels half-baked when it is released. To boot, Google is under immense pressure from IP litigation and since they don't sell a product, they have to pass through the licensing costs.
Microsoft has different problems. MS is really behind in development and MS takes an eternity trying to integrate software with their partners hardware (with mediocre success). However, MS has huge potential to partner with both tablet and phone manufacturers. If you take into account phone and tablet distribution MS is only second to Apple. MS's biggest problem is actually producing a product and making it work on real hardware in a reasonable timeframe. MS is so slow their partners will be selling last years model for the foreseeable future. Their software is so resource intensive a new device will feel like last years model even if it has this years cost.
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
HP has potential, but their problem is that they will get caught in the middle. They can't take the low end becaues there will always be a cottage industry of non-integrated manufacturers that reduce profits to nothing. They won't be able to beat Apple on the high end and they won't be able to beat the malware sold at the low end. At best they help Apple by beating up the low end, which is what is going to happen with the $100 price reduction.
The next quantum leap by Apple is to tie the phone, tablet, and PC together with iCloud (and the iPod). Here again, Apple is the only one poised to make such a move. Apple is the only one with major distribution in phones, tablets, and PCs that can be seamlessly synced.
I predict the move to iCloud is where Apple will leave Google in the dust. Google's approach to the cloud is just dead wrong. Nobody wants to be dependent on an internet connection. They just want their devices synced up (and maybe backed up) when their internet connection is available. Google's cloud is beneficial if you have poor computer performance, and you have a really really fast and reliable Internet connection for all your devices. Apple's Cloud is usefull if you have good computing power and poor internet service. It doesn't take a rocket scientist to figure out who is going to win this one. Google lost before they started.
Interestingly, the cloud is where MS could come back. MS has the capability of partnering with PC, Phone, and Tablet manufacturers. Also, HP is strong in this category because they have the strongest PC precense of anyone and they have an integrated approach. If people demand syncing between all their devices who better than HP to provide an integrated approach. Interestingly, the best positioned competitor right now (Google) looks to be the worst positioned competitor in the cloud wars. All I can say is Google better adapt quickly or they are going to get hammered. Maybe Apple will play its cards correctly and keep HP, MS, and Google at each other's throat while Apple syncs up the world to an array of Apple devices.
Any way you look at it, Apple is the clear winner in the near term. Apple has an integrated approach that gives them speed to market and high performance. Apple has a killer phone, killer phone distribution, a killer tablet, and killer tablet distribution channels and the ability to tie it all together. Apple's biggest risk is that they are conciously choosing not to sell to the low end market. If Apple doesn't sell to the low end market and the low end market subsumes the rest of the market.........good bye Apple. This has nothing to do with who is servicing the low end market (Google or MS). It will simply be the consequence of servicing a market that disappears. Hopefully it won't happen and/or Apple will adapt.
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."
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
Well QNX is actually pretty Good. Sure playbook tanked, but so did android and everyone else. I think QNX is equal to webOS on tablets. Of course RIM "borrowed" some design elements from webOS, but overall both are innovative in terms of gestures and are fairly intuitive.
If RIM pushes QNX on phones as well and gear them in a laser focus on enterprise only they will keep their niche and will be very successful.
HP has to succeed in the consumer market (at least touchpad was aimed at consumer market). In this segment we have techies, gamers, old people, music / video / photo geeks, facebookers and students. Apple has all of those categories in the bag.
Google made an appeal to techies and low end which made it successful. I'm not sure what HP has. Maybe printing enthusiasts.
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
Umm, I think you misunderstood me. Apple making quality products is of course good. Same if they started creating cars. But designing a car that lasts forever on the other hand (forever, not 5 years or 10 years) is a bad idea. Well, of course people buying to get better fuel efficiency would be a great incentive to buy new even if their 500 yr old car works just as new
I see what you're saying... sell a couple million at a loss to gain mindshare with customers... but that doesn't really work with these kind of electronics.
It works with game consoles because you gotta buy games for them... that's kinda what they're for. And like I said... game consoles are on the market for years.
But cell phones, computers, tablets... no one sells them at a loss.
But it can work that way (assuming they do it right). You lose in the short term (i.e. the current generation of the product) but with the mind share, assuming it stays strong, would lead to greater opportunity of them buying the newer generation (sold at a profit).
This old "they need competition to keep them on their toes" thing gets trite after a while.
Fast User Switching. Flash lamps on camera-phones. Multi-button mice. iOS 5 integrated notification. Ebooks.
Perhaps you've heard of them?
Not everything Apple does is necessarily their own original idea or motivated internally. Competition - good competition - benefits you whether you want to acknowledge it or not.
Comments
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.
What good is market share? Bragging rights?
I see what you're saying... sell a couple million at a loss to gain mindshare with customers... but that doesn't really work with these kind of electronics.
It works with game consoles because you gotta buy games for them... that's kinda what they're for. And like I said... game consoles are on the market for years.
But cell phones, computers, tablets... no one sells them at a loss.
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...
right... Because they've stood still for the first nearly two years of zero competition.
This old "they need competition to keep them on their toes" thing gets trite after a while.
Apple makes great products because it's what they do. Jobs built a company in his perfectionist image. THATS what drives them, not incompetent, stumbling footsteps far behind them.
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.
HP's handling of Palm is like a Gorilla with an iPhone. (OMG too many puns in this sentence)
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...
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
.... not incompetent, stumbling footsteps far behind them.
Vivid imagery. Perfectly put.
I fail to see how selling a product at a loss per unit can be made up "in volume".
Economy of scale could make up a bit but I'd wager HP is just trying to get a user base going so it can then get developers which will give an ecosystem for which it can make the TouchPad a viable option.
So it's come down to a race for #2?
Well, we pretty much know that iPad 3 has been decided by Apple as to what it will be.
So let's all start talking about iPad 4 rumors!
That'll make HP et. el. moan!
/
/
/
and no doubt HP will release a new model that is slimmer and lighter, its hardware fatal flaw. but when?
too soon to write them off tho.
but yes, this price cut is obviously needed to unload the unsold inventory of the V.1 TouchPad. their problem is, the race to the bottom with all the Android tabs is now well underway, including them. and it's going to get worse for the Holiday season! they won't ever be able to bring the price of their improved V.2 model back up to iPad levels like they hope.
HP really needs to focus on the enterprise market. they could take over RIM's spot there if they put it all together. but they have to hurry up. if they don't, next year some one else will.
Google has the opposite problem. They are further along in development (but not quality) and they have really good phone distribution. However, they have horrible prospects for tablet distribution. Google distributes through cell phone providers. When was the last time you logged onto ATT.com to buy a computer? And, the cell phone manufacturers have no experience making and selling PCs or the peripherals that go with them. Google also has a major problem with hardware optimization because their software isn't integrated, which means their software always feels half-baked when it is released. To boot, Google is under immense pressure from IP litigation and since they don't sell a product, they have to pass through the licensing costs.
Microsoft has different problems. MS is really behind in development and MS takes an eternity trying to integrate software with their partners hardware (with mediocre success). However, MS has huge potential to partner with both tablet and phone manufacturers. If you take into account phone and tablet distribution MS is only second to Apple. MS's biggest problem is actually producing a product and making it work on real hardware in a reasonable timeframe. MS is so slow their partners will be selling last years model for the foreseeable future. Their software is so resource intensive a new device will feel like last years model even if it has this years cost.
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
HP has potential, but their problem is that they will get caught in the middle. They can't take the low end becaues there will always be a cottage industry of non-integrated manufacturers that reduce profits to nothing. They won't be able to beat Apple on the high end and they won't be able to beat the malware sold at the low end. At best they help Apple by beating up the low end, which is what is going to happen with the $100 price reduction.
The next quantum leap by Apple is to tie the phone, tablet, and PC together with iCloud (and the iPod). Here again, Apple is the only one poised to make such a move. Apple is the only one with major distribution in phones, tablets, and PCs that can be seamlessly synced.
I predict the move to iCloud is where Apple will leave Google in the dust. Google's approach to the cloud is just dead wrong. Nobody wants to be dependent on an internet connection. They just want their devices synced up (and maybe backed up) when their internet connection is available. Google's cloud is beneficial if you have poor computer performance, and you have a really really fast and reliable Internet connection for all your devices. Apple's Cloud is usefull if you have good computing power and poor internet service. It doesn't take a rocket scientist to figure out who is going to win this one. Google lost before they started.
Interestingly, the cloud is where MS could come back. MS has the capability of partnering with PC, Phone, and Tablet manufacturers. Also, HP is strong in this category because they have the strongest PC precense of anyone and they have an integrated approach. If people demand syncing between all their devices who better than HP to provide an integrated approach. Interestingly, the best positioned competitor right now (Google) looks to be the worst positioned competitor in the cloud wars. All I can say is Google better adapt quickly or they are going to get hammered. Maybe Apple will play its cards correctly and keep HP, MS, and Google at each other's throat while Apple syncs up the world to an array of Apple devices.
Any way you look at it, Apple is the clear winner in the near term. Apple has an integrated approach that gives them speed to market and high performance. Apple has a killer phone, killer phone distribution, a killer tablet, and killer tablet distribution channels and the ability to tie it all together. Apple's biggest risk is that they are conciously choosing not to sell to the low end market. If Apple doesn't sell to the low end market and the low end market subsumes the rest of the market.........good bye Apple. This has nothing to do with who is servicing the low end market (Google or MS). It will simply be the consequence of servicing a market that disappears. Hopefully it won't happen and/or Apple will adapt.
Should be interesting.
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
I think Apple took a hit on profitability in the hopes that they could make it up on volume. The winners in the PC wars were the volume sellers. I think Apple decided to try it with the iPad. Volume pricing is a really hard thing to do with a high end product and even harder with an allegedly new category of product. Volume pricing is usually a strategy to take with an established market starting with the bottom up. The reason Apple was succesful is because they knew there wouldn't be any competition in the first year. The market was completely Apple's. Capitalizing on their lead was their only chance for market dominance, unless they wanted to compete in the low end. Once you come to this conclusion, the answer is simple. The only way to get volume in the first year of a new product is a rock bottom price. As you may recall, some speculated the iPad would debut at $1,000. The $500 price point was nothing short of shocking.
I'm sure losing the first PC war had a lot to do with the carefully calcuated approach Apple took with the iPad. I don't think it was luck. I think they planned it this way. When Steve Jobs announced the iPad he said it was the most important thing he had done. He obviously had a vision of how things would play out. Most couldn't see it even when he spelled it out for them.
To be fair, i'd like to read an updated review of TouchPad with its updated OS. to see if they fixed the fatal flaws at least. i'll look around ...
and no doubt HP will release a new model that is slimmer and lighter, its hardware fatal flaw. but when?
too soon to write them off tho.
but yes, this price cut is obviously needed to unload the unsold inventory of the V.1 TouchPad. their problem is, the race to the bottom with all the Android tabs is now well underway, including them. and it's going to get worse for the Holiday season! they won't ever be able to bring the price of their improved V.2 model back up to iPad levels like they hope.
HP really needs to focus on the enterprise market. they could take over RIM's spot there if they put it all together. but they have to hurry up. if they don't, next year some one else will.
RIM doesn't have a spot in anything and certainly not the Enterprise market. No business person is going to buy a tablet that doesn't have push email. Seriously, RIM's device was dead on arrival.
I agree, HP is positioned to compete with Apple, but will get beat up from the bottom (i.e., Android malware).
PS:
Mr. Rubenstein it is true OSX at version 10.0 received the pretty poor reviews described (rightfully so). Yet, those reviews largely applied to the Beta, which Apple released publically. About 4 months later, Apple preinstalled 10.0 on new machines, but didn't make it the default. Apple didn't ship OSX as the default on its Macs until over a year after the public beta when it released 10.1 (a massive free update). Even when people were running OSX, they could also run System 9 in emulation and have access to all the prior applications. In a nut shell, customers didn't have to rely on OSX intially. So with all that in mind, what is the default OS on HP Devices?
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.
And if you think they won't be cheap, just look at Android.
Second, HP can take an Apple approach like when Apple released OSX for the first time. It can preinstall WebOS on dual boot computers while having a familiar OS like Windows as the default. That is a huge customer base. This will allow customers to play with the OS and become accustomed to it. Unlike Microsoft, HP can afford a slow start with WebOS.
I see HP as the strongest challenger to Apple if HP can hold it together and play its cards right. With that said, I played with the HP Tablet. Currently, it isn't worth the money even with the discount compared to the iPad.
HP brings an interesting mix to the fray. They are behind Google in development and their phone business is almost non-existant, despite being in the market for quite some time. However, HP has enormous potential for manufacturing and distributing tablets. And, like Apple they have a combined hardware-software approach.
Google has the opposite problem. They are further along in development (but not quality) and they have really good phone distribution. However, they have horrible prospects for tablet distribution. Google distributes through cell phone providers. When was the last time you logged onto ATT.com to buy a computer? And, the cell phone manufacturers have no experience making and selling PCs or the peripherals that go with them. Google also has a major problem with hardware optimization because their software isn't integrated, which means their software always feels half-baked when it is released. To boot, Google is under immense pressure from IP litigation and since they don't sell a product, they have to pass through the licensing costs.
Microsoft has different problems. MS is really behind in development and MS takes an eternity trying to integrate software with their partners hardware (with mediocre success). However, MS has huge potential to partner with both tablet and phone manufacturers. If you take into account phone and tablet distribution MS is only second to Apple. MS's biggest problem is actually producing a product and making it work on real hardware in a reasonable timeframe. MS is so slow their partners will be selling last years model for the foreseeable future. Their software is so resource intensive a new device will feel like last years model even if it has this years cost.
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
HP has potential, but their problem is that they will get caught in the middle. They can't take the low end becaues there will always be a cottage industry of non-integrated manufacturers that reduce profits to nothing. They won't be able to beat Apple on the high end and they won't be able to beat the malware sold at the low end. At best they help Apple by beating up the low end, which is what is going to happen with the $100 price reduction.
The next quantum leap by Apple is to tie the phone, tablet, and PC together with iCloud (and the iPod). Here again, Apple is the only one poised to make such a move. Apple is the only one with major distribution in phones, tablets, and PCs that can be seamlessly synced.
I predict the move to iCloud is where Apple will leave Google in the dust. Google's approach to the cloud is just dead wrong. Nobody wants to be dependent on an internet connection. They just want their devices synced up (and maybe backed up) when their internet connection is available. Google's cloud is beneficial if you have poor computer performance, and you have a really really fast and reliable Internet connection for all your devices. Apple's Cloud is usefull if you have good computing power and poor internet service. It doesn't take a rocket scientist to figure out who is going to win this one. Google lost before they started.
Interestingly, the cloud is where MS could come back. MS has the capability of partnering with PC, Phone, and Tablet manufacturers. Also, HP is strong in this category because they have the strongest PC precense of anyone and they have an integrated approach. If people demand syncing between all their devices who better than HP to provide an integrated approach. Interestingly, the best positioned competitor right now (Google) looks to be the worst positioned competitor in the cloud wars. All I can say is Google better adapt quickly or they are going to get hammered. Maybe Apple will play its cards correctly and keep HP, MS, and Google at each other's throat while Apple syncs up the world to an array of Apple devices.
Any way you look at it, Apple is the clear winner in the near term. Apple has an integrated approach that gives them speed to market and high performance. Apple has a killer phone, killer phone distribution, a killer tablet, and killer tablet distribution channels and the ability to tie it all together. Apple's biggest risk is that they are conciously choosing not to sell to the low end market. If Apple doesn't sell to the low end market and the low end market subsumes the rest of the market.........good bye Apple. This has nothing to do with who is servicing the low end market (Google or MS). It will simply be the consequence of servicing a market that disappears. Hopefully it won't happen and/or Apple will adapt.
Should be interesting.
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."
If that is how it works, ouch.
RIM is dead. The only thing they have done right is an integrated approach. RIM has strong (but dwindling) phone distribution channels, but no phone to distribute. RIM has a mediocre tablet at best; but even if they could produce a good tablet, they have no place to distribute a tablet. The only interesting thing about RIM is whether someone will buy it or whether it will go belly up and sell off its assets.
Well QNX is actually pretty Good. Sure playbook tanked, but so did android and everyone else. I think QNX is equal to webOS on tablets. Of course RIM "borrowed" some design elements from webOS, but overall both are innovative in terms of gestures and are fairly intuitive.
If RIM pushes QNX on phones as well and gear them in a laser focus on enterprise only they will keep their niche and will be very successful.
HP has to succeed in the consumer market (at least touchpad was aimed at consumer market). In this segment we have techies, gamers, old people, music / video / photo geeks, facebookers and students. Apple has all of those categories in the bag.
Google made an appeal to techies and low end which made it successful. I'm not sure what HP has. Maybe printing enthusiasts.
Apple has always been about quality. And they have figured out how to pull it off and make a profit. Last I heard, they are the most profitable corporation on the planet. And there are many, myself included, who like it and participate.
The iPad seems to be a new era in the Apple saga. Previously, Apple products where pretty much higher priced than PC's, based on specks per money. But they seemed to have figured out how to design and manufacture at better price points, while still maintaining their quality standards. The new MacBook Pros and MacBook Airs are further evidence of this trend. But at the same time, my 2008 C2D Macbooks still hold up, still rock, and are still very usefull.
Umm, I think you misunderstood me. Apple making quality products is of course good. Same if they started creating cars. But designing a car that lasts forever on the other hand (forever, not 5 years or 10 years) is a bad idea. Well, of course people buying to get better fuel efficiency would be a great incentive to buy new even if their 500 yr old car works just as new
What good is market share? Bragging rights?
I see what you're saying... sell a couple million at a loss to gain mindshare with customers... but that doesn't really work with these kind of electronics.
It works with game consoles because you gotta buy games for them... that's kinda what they're for. And like I said... game consoles are on the market for years.
But cell phones, computers, tablets... no one sells them at a loss.
But it can work that way (assuming they do it right). You lose in the short term (i.e. the current generation of the product) but with the mind share, assuming it stays strong, would lead to greater opportunity of them buying the newer generation (sold at a profit).
This old "they need competition to keep them on their toes" thing gets trite after a while.
Fast User Switching. Flash lamps on camera-phones. Multi-button mice. iOS 5 integrated notification. Ebooks.
Perhaps you've heard of them?
Not everything Apple does is necessarily their own original idea or motivated internally. Competition - good competition - benefits you whether you want to acknowledge it or not.