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HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

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Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#41

Post by jerf »

cube13 wrote: post #40
jerf wrote: post #30

Earlier quoted context omitted.

That last one is why Amazon is the one to watch. They have a plausible "sell the Kindle-pad at a moderate loss" scenario, in that they have numerous for-pay services they can hawk from a privileged position on their tablet, and with Amazon Prime's integration with their video service, a plausible way to turn a Kindle-pad into a recurring revenue stream as well, a recurring revenue stream that encourages additional on…

I honestly don't think that Amazon or Barnes and Noble consider their devices to be iPad competitors, though. They're selling them as eReaders that just happen to be able to play Angry Birds, not as full-featured tablets.

That's what they are selling them as... now.

Have you seen this? http://www.amazon.com/b/ref=sa_menu_aiv_piv_t10?ie=UTF8&... Or anything else on the left sidebar under "Instant Video". Or their music plays. Or http://www.amazon.com/mobile-apps/b?ie=UTF8&node=2350149... .

There's a lot of things they've been doing over the past year or two that makes a lot of sense in the context of planning to create a blessed Amazon media player. It does not exist yet, but it's hard to imagine it won't.

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#42

Post by drzaiusapelord »

FilterJoe wrote: post #9

The Nook Color is an example of a $250 tablet with less functionality than an iPad. Though Barnes and Noble has not released any official sales figures, it is easily outselling all other tablets except for the iPad. This seems supportive of the authors assertions and I'm surprised this information was not included in the post. http://www.businesswire.com/news/home/20110708005437/en/Medi... And the following is the fi…

But compared to an ipad or a Samsung Tab its terrible. I have one. Its VERY slow, it has no hardware buttons (annoying), no camera, no GPS, heavy for the size, underwhelming battery, etc. Using it as a tablet is a hack. I can get an Iconia for $399 right now that blows it away. Is an extra $150 worth it? Absolutely. Another $100 gets me an iPad2 or a Samsung.

I'm not sure what the magic price point is to get Joe Sixpack off his couch, but its probably around $200-$299. He just won't be happy with a Nook Color. I love this stuff, deal with its issues, and have a lot of patience with Android and I still find it annoying. He will just return it.

Of course, as an ebook its very nice, but an ebook is not a tablet. Half-assed tablets really is hurting Android's tablet image. Pre-Honeycomb junk on slow processors with no hardware buttons shouldn't be recommended.

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#43

Post by martingordon »

The key factor everyone's missing from a loss leader strategy is that the consumables must be a requirement to use the device. Consoles, razors and printers can all sell for a loss because they are worthless without games, blades and ink. You can get by on a tablet (and I bet a majority of non-tech savvy users do) by just using the built-in apps and/or free apps.

If HP went with this strategy with the TouchPad, it would require that a user spend $1000 on apps to make up for the $300 loss on each TouchPad. At an extremely generous $5/app, that's still 200 apps per user. And what happens when the TouchPad 2 comes out? Does HP sell it at a loss, necessitating yet another $1000 to be spent on apps, or do they bump the price up and deal with the negative press?

The best thing HP could have tried would have been to negotiate better component pricing from its suppliers. The problem here would have been that they have no leverage, despite being the world's largest PC manufacturer, since their traditional PC components consist of hard drives and Intel chips, neither of which have any place in the mobile market.

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#44

Post by roc »

sciurus wrote: post #37
roc wrote: post #29

Earlier quoted context omitted.

People are trying to match the iPad because even a stripped-down tablet is still going to have to cost ~$400. The extra RAM and Flash add what to the bill-of-materials? $25? If you could put together a $200 tablet, Negroponte would be declaring victory in the press, rather than quietly rolling back the date of the XO-3 over and over again.

Archos is selling their 10" tablet for $270. The 7" is $240. I've used one of the 10" models and found it fine for web browsing. Sadly, their new models coming out in September are said to cost $300 and $370. https://store.archos.com/archos-internet-tablet-p-5005.html

Are they clearing inventory at the lower price, or were they ~$300 the whole time?

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#45

Post by FilterJoe »

drzaiusapelord wrote: post #42
FilterJoe wrote: post #9

The Nook Color is an example of a $250 tablet with less functionality than an iPad. Though Barnes and Noble has not released any official sales figures, it is easily outselling all other tablets except for the iPad. This seems supportive of the authors assertions and I'm surprised this information was not included in the post. http://www.businesswire.com/news/home/20110708005437/en/Medi... And the following is the fi…

But compared to an ipad or a Samsung Tab its terrible. I have one. Its VERY slow, it has no hardware buttons (annoying), no camera, no GPS, heavy for the size, underwhelming battery, etc. Using it as a tablet is a hack. I can get an Iconia for $399 right now that blows it away. Is an extra $150 worth it? Absolutely. Another $100 gets me an iPad2 or a Samsung. I'm not sure what the magic price point is to get Joe Sixp…

You're absolutely right that Nook Color is a far worse general purpose tablet, for all the reasons you mentioned. If the question though is how to carve out niches in the overall tablet market, then Color Nook answers with one possibility:

A sub $300 e-reader than can, in a pinch, work poorly as a tablet. The Color Nook can do quite a bit of what a typical person wants, right? Like consume news (Pulse), check and respond to e-mail, and browse text-heavy sites.

You can of course do so much more and so much better on an iPad or Galaxy Tab. But not everyone needs "so much more" enough to pay for it.

Surprising tidbit about the Color Nook: women love it for the women's magazines:

http://www.nytimes.com/2011/05/23/business/media/23nook.html...

Not the profile of a typical hacker news member but hey - if there's a niche for a device you can stick in a purse to substitute for a handful of women's magazine's - what's wrong with that?

Maybe the market will bifurcate into iPads at Galaxy Tabs at the top, and a bunch of niches serviced with less expensive devices?

EDIT: reworded awkward sentence

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#46

Post by glhaynes »

mgkimsal wrote: post #18
MatthewPhillips wrote: post #14

Earlier quoted context omitted.

The parts alone cost $328[1] I think it's safe to say that your pricing plan would have them losing $100+ per device. So selling a million Touchpads (which wouldn't even be that great) has them losing at least 100 million. And who knows if they would have even sold that many at $299. There are Android tablets priced at what you're suggesting, but I doubt their components cost as much, and I don't think their sales ar…

Most of the Android ones I've seen at that price are pretty abysmal compared to webOS. Personal view, obviously, but webOS in general is a nicer experience. So... they paid $1.2billion for a company, but another $100 million (I suspect the delta would have been less) is too much to put in to an investment? If you actually had a million of those devices sold even within 6 months, that'd be a big momentum for a third p…

Even if they sold 1 million of them at a loss, that'd still put them about 30 million units behind Apple - so still a distant loser, especially with Android being in the game too. Besides, then all they'd have bought is a chance at selling to roughly that same small group again next year, again at a loss because most of the folks that only bought this year because it was super-cheap aren't going to be willing to buy at $500 next year.

The key to a sustainable platform is to make a profit on each device or be able to make it up with highly profitable post-device sales (video games for consoles or blades for razors).

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#47

Post by mgkimsal »

glhaynes wrote: post #46
mgkimsal wrote: post #18

Earlier quoted context omitted.

Most of the Android ones I've seen at that price are pretty abysmal compared to webOS. Personal view, obviously, but webOS in general is a nicer experience. So... they paid $1.2billion for a company, but another $100 million (I suspect the delta would have been less) is too much to put in to an investment? If you actually had a million of those devices sold even within 6 months, that'd be a big momentum for a third p…

Even if they sold 1 million of them at a loss, that'd still put them about 30 million units behind Apple - so still a distant loser, especially with Android being in the game too. Besides, then all they'd have bought is a chance at selling to roughly that same small group again next year, again at a loss because most of the folks that only bought this year because it was super-cheap aren't going to be willing to buy…

"Android" is not a standard hardware platform - it's pretty much whatever any manufacturer wants to ship. The TouchPad had the potential to be much more akin to the iPad/iOS line because one company was controlling the hardware experience.

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#48

Post by glhaynes »

mgkimsal wrote: post #47
glhaynes wrote: post #46

Earlier quoted context omitted.

Even if they sold 1 million of them at a loss, that'd still put them about 30 million units behind Apple - so still a distant loser, especially with Android being in the game too. Besides, then all they'd have bought is a chance at selling to roughly that same small group again next year, again at a loss because most of the folks that only bought this year because it was super-cheap aren't going to be willing to buy…

"Android" is not a standard hardware platform - it's pretty much whatever any manufacturer wants to ship. The TouchPad had the potential to be much more akin to the iPad/iOS line because one company was controlling the hardware experience.

I agree it had that potential in theory, but in practice it had nearly none of the market advantages of the iPad. It didn't have the Apple (or iPod / iPhone) brand name to catapult off of nor a large base of users that already own similar devices; it didn't have many apps nor much developer support; and, importantly, it didn't have the iTunes ecosystem of easily-obtained media. It'd be awfully tough to out-Apple Apple right now. Without some really strong differentiator, I don't know why anybody - least of all those at HP - would have thought they had a chance.

Re: HP's $99 TouchPad Fire Sale Can Teach Everybody A Lesson

#49

Post by sciurus »

roc wrote: post #44
sciurus wrote: post #37

Earlier quoted context omitted.

Archos is selling their 10" tablet for $270. The 7" is $240. I've used one of the 10" models and found it fine for web browsing. Sadly, their new models coming out in September are said to cost $300 and $370. https://store.archos.com/archos-internet-tablet-p-5005.html

Are they clearing inventory at the lower price, or were they ~$300 the whole time?

Looking back, I think the original price was $299. I hadn't realized it earlier, but Archos also has a low-end series that runs from $99 to $199. I doubt the hardware is very good in that price range.

http://arnovatech.com/home.html?country=us&lang=en

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