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Do the huge sales of the $99 TouchPad tell us anything about the iPad and the future of tablets?
People like a deal?
Well I wouldn’t say nothing. At the very least it tells us that the future of tablets in general is looking pretty bright. There’s clearly a demand for this form factor and it doesn’t necessarily have to be an iPad if the price is right.
Very clever. This is a much better analysis: http://goo.gl/YnlQA
Really? I think it said that lots of people want tablets but didn’t buy one yet.
It’ll be fun watching them try to return them.
I do think that puts the market where it has to be. I explain. A Mac is twice the price of a PC. An android or WebOS or anything else, will have to be half the price of an iPad to have an impact on the market.
A Mac is twice the price of a PC.
The 1990s called: they want their mythical memes back.
Looking at the people who lined up to buy it, and the number of people trying to sell at a $50 profit on Craigslist, I think you can extrapolate three things: “people like perceived bargains”, “people like trying to make a quick buck”, and “some people like dead tech.” I say this with a 3Com Audrey sitting in the other room.
It tells us that people haven’t—yet–learned what bargain pricing will get you in a tablet. (Hint: nothing like an iPad! And when you end up getting an iPad anyway, that “cheap” TouchPad is more like a $100 penalty.*)
People always fall for extremely cheap deals.
If Fiat is going to sell his Multipla for 20% of its original price, people WILL buy it no matter how ugly the thing is.
So…the right price is taking a $200 punch in the stomach on every single device?
I was PRAYING you were going to say that! Nice going!
another good one.
The original Multipla may be ugly, but it’s ugly in a good way. One of my favourite cars ever.
I prefer Ian’s analysis for the value per word (and we are talking about value aren’t we?).
Very true. Although it will be interesting to see what impact (if any) half a million devices out in the wild will do for WebOS moving forward.
They do make reasonably good large beer mats except they are not absorbent, are quite heavy and tend to ooze after a while.
Or some people will buy a dead-end POS if they think they are getting a “deal” on price. (and try to resell it on craigslist).
It tells us that there are a lot of speculators out there hoping to ‘flip’ these doorstops. If you believe what you read in some tech blogs’ comments.
Hey, I think there’s a law for that kind of headline…
These $99 Touchpad sales remind me of a Simpsons joke when they’re at the dollar store…
LISA: “I don’t know, Dad, the label says this canned shrimp may lead to ‘red tide’ poisonIng”
HOMER: “But it’s so (gulp) cheap!”
He then proceeds to get sick and turn purple.
That consumers believe an iPad is at least 5X more valuable than a TouchPad.
We had an Audrey! I wonder what happened to her?
HP talking about selling off their PC division is much more instructive.
Definitely a wake up call to all the other tablet makers out there. It tells them that in order to get Apple-sized crowds for a tablet with no apps, no updates, and so-so reviews, all you need is an $400 price drop.
Or in other words, your tablets aren’t exciting enough to be priced anywhere near the iPad.
Which is why the PC manufacturers are all whining to Intel for help and a $100 subsidy for their Ultrabooks, because they can’t compete with MacBook Airs on price?
Apple-sized crowds? Hardly. Apple sold more iPads in the first day than the number of TouchPads HP manufactured (IIRC).
Apple-like interest, sure…
She became huge and threatened to eat all humanity with its evil spawned flowers, so it had to be killed.
No, smarty pants.
twice the price, eh? please link to some ultrabook prices that are half the Mac Air. also some ultra-compact desktops like the Mac mini.
Who knows? TouchPads could be worth big bucks as a collectors’ item in the future. Plenty of nostalgia value, as in “Wow. I remember when tech companies thought that all they needed was slick hardware plus an intuitive OS. Why didn’t those primitive people see that it’s all about the experience and the infrastructure?”
Apple’s upgrades from base settings are still hugely expensive (I believe upgrading my laptop from 4GB to 8GB cost me 1/3 of what Apple were asking via Crucial.com last year), but their base offerings are extremely competitive, price-wise.
I believe that was an Audrey II! Nice joke!
Everyone seems to forget that a $500 tablet being sold for $100 isn’t the same as a $100 tablet being sold for $100.
What can you buy for $100? Even a cheap gaming system, like the DS, is more than $100. So, get a TouchPad for your kids to play on. Or put it on the coffee table as an internet-reading device, because it’s just that cheap.
The touchpad is a mediocre device that still would have been easy to clear out at $200, maybe $250. I just wonder why they set the price so low…HP left a lot of money on the table.
It tells us that the public thinks the Touchpad is worth $99 – even though it’s made with $250 worth of parts. I say, drop the price to $0 and they’ll overtake the iPad in days.
It will be interesting as the website metrics start to come on board next month to see if the TouchPad even makes a blip in the noise that is the non iPad market.
If HP had decided to sell all their remaining PC inventories for 80 % off how would that have looked like? The frenzy would have been 100 times bigger. What would that have told us about the future of the PC? Nothing.
Or something like the successor to Amazon’s kindle where the price per unit is significantly subsidized to leverage the their online sales of apps, books and anything else you can buy through Amazon. They’re pretty good at selling stuff.
It’s just one weekend, and it’s a product that has been declared dead by the vendor. I don’t think this will change perceptions anymore than a $150 Archos tablet that has been available for half a year.
So buy ram somewhere else.
I wonder what total webOS sales since 2009 were. Maybe 4 million?
The difference is that the $99 price point for tablets is more realistic especially if we consider a model like Amazon’s and similarly Apple’s. iTunes, the App Store and Amazon’s online market place is a huge channel for revenue. Taking a hit in cost per device could be paid for many times over by making it exceedingly easy for users to buy from these services. Look no further than the App Store and Amazon’s bookstore.
There is no parallel to this recurring revenue stream in the “hugely discounted PC” analogy.
If by “better” you mean “less accurate,” then sure.
Because they didn’t want to leave a lot of TouchPads on the table? Clearly, this product was worth close to dirt in HP’s minds.
Antiques Roadshow, 2250. Smug appraiser robot with British accent. “You say your ancestors paid $99 for this? We actually see quite a few of these, usually pristine, lightly used, in the original box. Worth today? $5,000 which is equivalent to ~$5 in 2011 dollars. I’ll give you $500,000 for the box though as it is made from those extinct things they used to call trees.”
best article i’ve read about HP all week.
No won’t work, that would require a walled garden! The very thing they are wailing against! Remember open open open!
Pure conjecture. If you look through the numbers, Apple is making maybe $10 in iTunes revenues per user per year. After 70 % revenue share, payment processing and delivery that leaves $1 in profit at best. iTunes is priced to sell hardware, not the other way round. As I said above: If you want to go for the video console model you have to price your apps at $60.
Cellphone carriers have multi-year contract-guaranteed revenue stream when they subsidize smartphones. AT&T charges you $100/month for 24 months to subsidize a phone by a few hundred dollars (so a $350 subsidy is recouped in 3.5 months with 21.5 months left on the contract to recover other costs and for profit).What sort of guarantees do you see in your “recurring revenue stream” which would parallel that? A minimum number of ebook purchases? Using the agency model, Amazon gets a 30% cut of each ebook, so to subsidize a tablet by $200, Amazon would need to make a minimum of 67 ebook sales at $10/ebook to make the subsidy revenue neutral. Even if you add in music and apps to the mix, you need to consider that $200/tablet is a significant amount to recoup and in few scenarios are you likely to see anything approaching AT&T’s revenue stream.So the question is at what point does a “recurring revenue stream” from a subsidized tablet become profitable? And I don’t think it happens unless you are in a situation like AT&T (or Verizon or whomever) is charging you a huge monthly fee.
Fricken funny. And fricken dead on.
it tells us the 1+ million unsold Samsung 7″ Gingerbread Galaxy tablets still sitting in warehouses and stockrooms around the world after almost a year are worth about $49 each.
when will Samsung take the big write-off (or how will they try to hide it?) for that colossal blunder? like $half a billion.
Well….looking at the various estimates for tablet sales on any OS besides the iPad….$200 punch in the stomach may be generous.
Possibly cost HP over $400 to make each TouchPad due to the lack of strategic hardware agreements.
I won’t argue that it is anything more than “conjecture”, I’m just saying it is a possibility considering the pricing trend of the current version of the Kindle: http://daringfireball.net/linked/2011/02/26/free-kindle
Maybe a subscription model plus the online market revenue?
“… last week Michael Arrington at TechCruch reported on a rumor which hints at a more clever plan: a free Kindle for every Prime customer of Amazon. Prime customers pay $79 per year for free 2-day shipping, and as of last week, free unlimited streaming movies (a la Netflix).
Arringtonwrites:In January Amazon offered select customers a free Kindle of sorts – they had to pay for it, but if they didn’t like it they could get a full refund and keep the device. It turns out that was just a test run for a much more ambitious program. A reliable source tells us Amazon wants to give a free Kindle to every Amazon Prime subscriber.”
The only problem with your briliant scheme is that the WebOS software market is practically nil.
A $99 retail pricepoint is not realistic when a device costs $300 to manufacture. >:O
Seriously, everyone that thinks tablets should retail for $99 have collectively bumped their heads.
Your comment implies HP could have a winner on their hands if they simply produced a $100 tablet. HP couldn’t design an Etch-a-Sketch for that price.
…and lack of industrial design expertise.
No I didn’t say HP could do it – although Amazon might have the right combination of ecosystem and traction to make it work.
“HP single-handedly destroys non-iPad tablet market”
That’s not a very insightful article considering there IS NO non-iPad tablet market.
The problem with your reasoning is, Apple sells apps so they can sell iPads. Not the other way around.
Thumbs up if Daring Fireball leads you here.
And if anybody think’s he is joking, the stock in the phone store I used to work in was all manufactured in November 2010.
They had already made $100m provision n accounts to wipe them off.
I don’t think “fall for” is quite the right phrase. At $99, even if you never use for anything other than reading Kindle books and PDFs, the TouchPad is a decent bargain.
Confessions time: I’ve used my iPad as a tea tray on at least one occasion. I hang my head in shame
It varies, to be honest. When Macs come out, the RAM upgrades are usually at least competitive (if you include the convenience factor of having it fitted). The trouble is that within a couple of months, RAM prices from places like Crucial have dropped a lot, but Apple doesn’t shift their prices – so they’re expensive.
At $99 it’s a disposable gadget. Soon the users will dispose of them.
I’ve got a Cassette Sony Walkman going cheep if anyone wants one?
Nicely put Ian.
There’s enough people in the world who’ll buy shit on a stick if they think they’re getting it at a bargain price.
Heh, true Although to be fair, the TouchPad is WAY better than anything you can buy for three times the price it’s been sold for at the moment. It’s not a bad tablet – much nicer than cheap Android models. Had I found one at that price, I’d have probably bought it.
100 comments for a 1 word article. I don’t know wether to laugh or cry.
You think that’s bad, Thomas – I almost left the page completely blank
It will sit proudly on my shelf next to Hooter’s Barbie and the Partridge Family lunch box.
You have a Partridge family lunch box? Now that’s a collectable!
actually, I think it tells us that there is a huge market for a cheap, email and web surfing tablet since obviously they are not buying for the Apps.
That was exactly my point. 😉
What’s the point of repeating this post in the comments? In fact, what’s the point of this post beyond trying to look smart?
Mr Skater, you’re missing a little bit of the context… Mr McNulty was making a “comedic” reference to this…
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There were a lot of Multipla around here a few years ago, and I’ve been wondering ever since that it must be very cheap for so many people to buy one.
Indeed. You should know it’s only allowed to use it as a coffee tray.
/me hangs head in shame.
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