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Old 08-22-2011, 09:09 PM   #1
tubemonkey
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Did HP Ruin Tablet Pricing?

HP's TouchPad fire sale: The fallout

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Tablet pricing is shot. If the TouchPad—a flawed device that still managed to have a lot of redeeming qualities—calls for an exit after a few weeks and a $99 to $149 price tag what does that say for all the other Apple iPad rivals? It’s no wonder retailers initially balked at HP’s prices. If the TouchPad is ultimately worth $99, what’s an Android tablet worth? How about $250 max? HP’s TouchPad experiment showed what price matters to consumers and the path to market share gains on Apple. The rub: No tablet maker can make money at HP’s fire sale prices. Something has to give. BetaNews’ Joe Wilcox argued that tablet pricing is ruined after HP’s fire sale. I’m inclined to agree.
I sure hope so. Tablets are overpriced to begin with. It'll be interesting to see if this fire sale will affect Amazon's pricing on its forthcoming tablets.
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Old 08-22-2011, 09:22 PM   #2
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This will be a very good long term strategy. Tablet PC are future thats beyond any doubt and almost every mobile manufacturing company is coming in competition, that will ultimately drive a mad competition and ultimately end users will benefit from it
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Old 08-22-2011, 09:28 PM   #3
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HP's TouchPad fire sale: The fallout
Tablets are overpriced to begin with.

No they are not. ----- is selling every ------ that it can manufactur at $---+.

Customers want quality for their $. That they are finally buying at $400 off tells you what they really think of the non-iPad tablets.

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Old 08-22-2011, 09:32 PM   #4
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Quality tablet + low price = $250 Nook Color
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Old 08-22-2011, 09:45 PM   #5
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That they are finally buying at $400 off tells you what they really think of the non-iPad tablets.
They're not finally buying at $400 off, since no one offered such pricing to begin with. All it says for sure is that people love a super bargain.

What this fire sale did is effectively remove tens (and maybe even hundreds) of thousands of consumers from the available tablet purchasing pool. That's gotta hurt all tablet makers.
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Old 08-22-2011, 10:16 PM   #6
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Rumor mill has consistently had Amazon aiming low, but more importantly they plan to offer more than competitors at that lower price, to a built-in audience that likes the company and its content offerings at just the moment (Ice Cream Sandwich) when Android for tablets reaches maturity (timing was how the then dying Motorola manged to compete with the 800lb gorilla HTC for a time).

Most android tablets to date have been generic. The transformer and thrive stand out a little, but they both could have done better. Notion Ink's Adam stands out more with a PQ option, but has a name no one can trust and the PQ tech apparently wasn't mature either. Some of tablet makers over-relied on carriers to make sales as if tablet sales channels would be the same as phone sales channels. Some used andriod 2.x and all the while, tablet support in the market was limited and confusing. All have charged too much, other than perhaps B&N.

I'm not sure Amazon will succeed, but they certainly appear to be targeting a lot of converging sweet spots, and the HP fire sale demand almost confirms that if Amazon builds the right feature/price balance, the customers will come.
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Old 08-23-2011, 06:26 AM   #7
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Quote:
Originally Posted by tubemonkey View Post
Quality tablet + low price = $250 Nook Color
Here is the thing, from what iFixit can tell (think it was them) when they did the tear down, B&N is loosing money on everyone of them sold. B&N is counting on you buying books with it. Other company's will not sell at a loss like that, except Amazon might.

HP did not hurt tablet pricing... once they are gone, they are gone. 6 months from now the market will have moved on with no real impact.
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Old 08-23-2011, 06:51 AM   #8
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Here is the thing, from what iFixit can tell (think it was them) when they did the tear down, B&N is loosing money on everyone of them sold. B&N is counting on you buying books with it. Other company's will not sell at a loss like that, except Amazon might.

HP did not hurt tablet pricing... once they are gone, they are gone. 6 months from now the market will have moved on with no real impact.
Amazon would sell cheap to get buyers into their ecosystem.

There will be an impact, because there'll be tens, if not hundreds, of thousands of consumers removed from the tablet buying pool.
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Old 08-23-2011, 06:56 AM   #9
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There will be an impact, because there'll be tens, if not hundreds, of thousands of consumers removed from the tablet buying pool.
Disagree, I would bet most of them end up buying a second or third tablet. In fact the elimination of one OS from the market could push prices UP. But in the end my prediction is it has no impact, they were to small of a player, to small of a blip. In short, I predict the market will say "I dont care" in response to this incident.
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Old 08-23-2011, 07:04 AM   #10
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Disagree, I would bet most of them end up buying a second or third tablet. In fact the elimination of one OS from the market could push prices UP. But in the end my prediction is it has no impact, they were to small of a player, to small of a blip. In short, I predict the market will say "I dont care" in response to this incident.
I ordered several as gifts (provided my order isn't canceled). I can guarantee that the people they're going to will not be getting a second tablet. One is enough for them.
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Old 08-23-2011, 07:09 AM   #11
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I ordered several as gifts (provided my order isn't canceled). I can guarantee that the people they're going to will not be getting a second tablet. One is enough for them.
Speaking in general, not specific. Market only cares in general, never in specific. Wait 6 months, then come back to this this thread and feel free to post "I told you so" if I am wrong, but experience tells me the market will say "I dont care."

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Old 08-23-2011, 07:14 AM   #12
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Speaking in general, not specific. Market only cares in general, never in specific. Wait 6 months, then come back to this this thread and feel free to post "I told you so" if I am wrong, but experience tells me the market will say "I dont care."

I don't do "I told you so's".
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Old 08-23-2011, 08:06 AM   #13
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HP’s TouchPad experiment showed what price matters to consumers and the path to market share gains on Apple.
It's not really an experiment, it's a, we're no longer in that business yet have a lot of dead stock making our books look bad. Rather than having a 500 million* loss in stock and the expensive of taking returns from retailers plus disposing of those returns, lets sell them off at a price people can't refuse even though they know the device is discontinued, then the stock is gone and they've only lost 400 million* instead.

It might have been a different story if they'd been able to actually build them for less and but as is they're going to be making a huge loss on each sale, so it's not really a price that any other tablet maker would consider. Even Amazon who could possibly sell at a loss with a view to making money on the long tail of book sales would be a little nuts to consider it, since tablets are so multi purpose there'd be no guarantee people would buy books for it

What it does show though, is what we've known all along, people cannot pass up a bargin, even if they might not really need it. If Amazon sells their tablet at £400 will it take off? Maybe. But if they then do a huge price discount as a limited sale I'd bet they'll sell the lot Just a matter of how far they could discount before they hit cost.

* Figures are made up to illustrate the point**
** Point made up to illustrate the figures*

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Old 08-23-2011, 08:46 AM   #14
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I ordered several as gifts (provided my order isn't canceled). I can guarantee that the people they're going to will not be getting a second tablet. One is enough for them.
So, am I on your christmas shopping list this year

I'd have bought one, even thought I don't really need another larger tablet (I want a new 7" one) (but they're not available where I live). But I agree, most people just want a tablet to sit on the couch to surf a bit. And they won't buy a second one if the first does exactly what they want.
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Old 08-23-2011, 08:47 AM   #15
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In fact the elimination of one OS from the market could push prices UP.
Like you, I am not convinced that these buyers are -- by and large -- "removed" from the market. But I am pretty certain that the message sent to the tablet manufacturers was clear, the market is there, but not at the price of full blown laptop. The price tag that is same, or cheaper, than the (entry level?) netbook is more like it. I would be surprised if there is any room to push prices up.
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