The iPad, errrr, “Tablet” Market

by dovetailedlife

You may have heard. HP, the company who likely made many of the laptops you see in day to day ongoings, announced yesterday that they are completely going out of the consumer product business.

The Wall Street Journal writes this of the conference call:

“The tablet effect is real, and sales of the TouchPad are not meeting our expectations,” Apotheker says, explaining the movement of consumers from PCs to tablets as one of the problems with the PC division. So H-P is exploring options for its unit that “may include separation through spinoff or other transactions.”

The iPad is killing computer sales. HP thought they could be a part of this paradigm shift, but they’ve proven that they can’t.

Only problem: HP spent a significant amount of money on producing their tablet, the HP TouchPad, which was reported as having abysmal sales since its introduction 49 days before its demise.

Literally, this thing was on the market for 49 days before HP threw in the towel. 49 days. They dropped the price by $100. They promoted the heck out of it. 49 days.

Absolute failure.

And it’s really a shame. the TouchPad was easily (in my opinion) the best iPad competitor. It was behind in speed, app market, thickness, OS robustness, and physical locations to buy it, but it was easily better than anything else on the market. Besides the iPad.

And when someone goes to buy a tablet with $500 in hand, they’re going to choose the iPad over the TouchPad. This is reality.

Today, HP dropped the price to $99. $99! It made even me think about buying one. Because a full tablet (no matter whether it is dead end or not) for $99 is a clear steal.

Problem? You can’t find them. All the retail chains are reporting to be out of them, and the geeks are going crazy buying them up. Because for $99, why not?

Then I see this nonsense on Facebook:

Well HP has proven one thing: There’s a LOT of interest in tablets, just not at $500. Which is…exactly what a lot of us have been saying all along: Apple fanboys would buy the iPad at $20,000; the rest of us would only buy it at $200 or less.

Wrong.

Apple announced several months ago that they’d sold 25 million iPads. Some at $499. Some at $829. That’s more than fanboys. That’s more than Apple elite. It’s because Apple came into a brand new market with a price that competed SIGNIFICANTLY with anything ANYONE ELSE would be able to create. Why? Because Apple bought a huge supply of flash memory in bulk, lowering their cost. Why? Because they integrate the hardware and software better than anyone else.

Apple created a market, an interest, and a device that completely changed who Apple is and the future the tech industry is taking. They did it at a competitive price (one others couldn’t match) and sold the heck out of it.

HP isn’t proving that there is an interest in tablets. HP is proving that if you create a product that is worse than a competitor’s and sell it at the same price, people won’t buy it; then if you lower the price by $400 and sell it significantly under your own cost, then you might be able to sell the remaining tiny stock you have already produced, at what could eventually be a several million dollar (perhaps billion dollar) company loss. Cool work, HP.

There is a tablet market, but HP didn’t prove anything. Apple did, and they did it in the way that counts…profit.

25 million. And that’s before my dad bought one.

-B

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