Update: All Things D has interesting post looking at how much money Hewlett-Packard might have lost on the TouchPad.
So let’s get this straight: Hewlett-Packard spends $1.2-billion to acquire Palm so it can move into the tablet computing business. It then launches the TouchPad (creative name, by the way!) with a marketing blitz, only to see sales go nowhere, leaving retailers such as Best Buy with loads of unsold inventory.
Then, HP shocks the world by announcing it’s going to abandon the tablet and PC markets to focus on software. Fascinating….except the story gets better.
After HP makes its decision, Best Buy goes back on its original decision not to sell its stash of 245,000 TouchPads by blowing them out at discount prices – $99 for the 16GB model and $149 for the 32GB model. (betanews has some colour on the TouchPad buying frenzy.)
People who would have never considered buying a TouchPad are now drooling about picking up a cheap unit, even though it’s built on an OS that could be orphaned.
If anything, it just goes to show that everyone likes a deal, even if it involves a product that is being discontinued.
At the same time, it does put a intriguing issue into the spotlight: could low-price tablets keep the marketplace from being dominated by Apple’s iPad?
There are some great tablets from companies such as Samsung and Motorola (I’m really enjoying my Xoom) but the iPad’s appeal and Apple’s brand mean the default choice for most consumers is an iPad.
Many people suggest the iPad is so compelling because of the 100K+ apps but truth be told, Android has an apps portfolio that is more than good enough. Heck, even the much-maligned Blackberry World probably has enough apps to do the trick.
So the iPad has the marketing aura and the apps but what it doesn’t have is a low price, although there’s rumbling Apple could introduce less-expensive models. This leaves a window of opportunity for someone to step up with a low-cost, user-friendly tablet likely built on Android that would have mass market appeal.
As much as overall sales are soaring, a cheap tablet would push the tablet into the mainstream, making it available to just about everyone, including people who look at them as a nice to have as opposed to a must-have. And the nice thing about playing in the low-price market is there’s little chance Apple will join the fray.
Of course, the key consideration for a supplier who decides to make low-cost tablets is having low enough costs and high enough sales volume to have decent profit margins. It would also help if there were add-on services available (storage, security, etc.) that would generate additional sales to support the low-cost model.
Given the strong sales of the TouchPad, there’s clearly a market for a cheap tablet backed by a reputable brand. Either that or people love a deal or they’re looking for a souvenir to sell later on eBay.
More: Daring Fireball offers a “simple explanation” about why HP abandoned Palm and decided to exit the PC business.Update