Pre iPad 3, rivalry hots up; HP TouchPad in tablet price war

HP TouchPad
By Richi Jennings (@richi ) - August 11, 2011.

[Updated to stare into the crystal balls]

HP (NYSE:HPQ) slashes the price of its TouchPad, in anticipation of the Apple (NASDAQ:AAPL) iPad 3 release date. What was a temporary $50 promotion became a $100 promotion, which is now "permanent". In IT Blogwatch, bloggers weigh up the pros and cons.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: The real truth behind BlackBerry and the London looting...

Sean Hollister verges on the breaking:

[T]his last weekend [HP] offered some deep discounts on its flagship HP TouchPad. ... HP’s Stephen DiFranco just made that deal permanent. ...[T]he company’s publicly decided to compete on price...[so] you can pick up a 16GB HP TouchPad for $399.

...

[W]ith [this] substantial price drop and a sizable software update...it’s not a bad deal.   
M0RE

    Sean Ludwig adds:

The steep discount comes only about a month after its debut [implying it's] not selling very well. ...[T]hat whole iPad thing...combined with a slew of recent Android-based tablets, makes it an especially challenging time to launch a new tablet.

...

Knocking $100 off the price of the base unit means the tablet undercuts the market leader, Apple’s iPad, which starts at $499. ... TouchPad [has] decent specs and interesting features. ...[A] dual-core 1.2-GHz Snapdragon processor...a front-facing camera [and] runs the very cool WebOS, which puts...the iPad 2 to shame when it comes to multitasking.   
M0RE

But Chris Nerney ain't so impressed:

There's more than a whiff of desperation to HP's decision. ... [T]he only way the TouchPad can [sell] is to price itself below Apple's superior tablet. ... The TouchPad was being set up to fail. ... Which HP quickly discovered, offering a $50 instant rebate in late July.

...

[N]ow at least the TouchPad is closer to its proper weight class. Against the iPad, it was outgunned.   
M0RE

Kevin C. Tofel ferrets further financials:

[T]his is the list price of HP’s tablet...so it’s possible consumers will see TouchPads priced even lower [at retail]. ... Based on the bill of materials, HP can still make a profit on these tablets, although not much.

...

[But] it’s not profit that HP needs to generate...right now: It’s sales. The more TouchPads sold, the more attractive the platform can appear to third-party developers. ... [A]pps are the real missing piece...and developers won’t build apps for a platform that isn’t growing.   
M0RE

Meanwhile, Marin Perez thinks lateral:

I have to wonder how this will impact sales of the next TouchPad. ...[T]his strategy may backfire...as those who were already on the fence will just wait a few months for the inevitable price drop. On the plus side,...[w]ith this price drop and the software updates to fix many issues, the TouchPad is definitely now one of the top tablets out there.   
M0RE

And Jared Newman jokes now:

Maybe if you wait long enough, HP will just start giving them away.   
M0RE
 

Update: Price war? What price war, asks Edward F. Moltzen:

During its most recent quarter, Apple reported selling 9.25 million iPads. ...Apple has seen competitors, like Motorola...launch Android-based tablets and cut pricing post-launch, [but]...continue to struggle while Apple moved on to triple-digit growth.

...

[People] that will buy tablets on price may become very similar to [those] that bought netbooks: broad, excited…and short-lived. ... [HP] may be targeting the wrong part of the market with an aggressive pricing move.

...

HP shouldn’t count on Apple meeting it on a price-war battlefield any time [soon]. ...[A] price war here would likely come at the expense of innovation...and that risks giving Apple even greater leadership.   
M0RE

  Update 2: Kevin C. Tofel ponders what's next from HP/Palm:

HP bought a platform. ... I think the company is betting that a one-size-fits-all approach isn’t the best strategy.

...

If the [next HP tablet] is indeed a 7-inch...it could help spur webOS device sales for those who don’t want to carry a larger slate. ...I actually prefer a smaller tablet device for portability and ergonomic reasons. A 10-inch slate is great...but eventually, it gets heavy to hold. My experience with a 7-inch Samsung Galaxy Tab shows the device can easily be used...longer periods of time. ... Heck, if HP added cellular voice capabilities to a 7-inch slate, I’d consider using it to replace a smartphone.   
M0RE

        And Finally...
The real truth behind BlackBerry and the London looting
[warning: look carefully and there's a very naughty word] 
 
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Richi Jennings, your humble blogwatcher

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. He's the creator and main author of Computerworld's IT Blogwatch -- for which he has won American Society of Business Publication Editors and Jesse H. Neal awards on behalf of Computerworld. He also writes The Long View for IDG Enterprise. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com. You can also read Richi's full profile and disclosure of his industry affiliations.

Copyright © 2011 IDG Communications, Inc.

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