What HP's TouchPad fire sale tells iPad rivals
Source: Christopher Williams
For a short time this week, the TouchPad was the world’s most wanted gadget. Now with stocks sold out, HP is left to wonder what might have been.
“All this clamouring for the TouchPad, kind of bittersweet,” she said.
According to components analysts, each of the gadgets cost HP at least £180 just to build, so selling the Touchpad for £89 would never have been considered until the firm decided to abandon it. But the success of HP’s fire sale may provide clues to others hoping to loosen Apple’s stranglehold on the tablet computing market.
The main Google Android tablets, made by Samsung and Motorola, are pitched at around the same £400-ish price point as the iPad. But, put together with all the other Android tablets, it’s estimated they are outsold by Apple’s devices eight to one.
Given Andoid makers’ weaker marketing, and, crucially, fewer apps, that ratio seems unlikely to change significantly. So the problem becomes circular: the user base is too small for app developers to invest in, so users buy an iPad because there are more apps and the user base gets even smaller relative to Apple’s.
In part this phenomenon is Apple’s reward for getting to market first, but Android tablet makers must find a way of breaking the cycle to avoid the TouchPad’s fate.
No doubt acutely aware of this is Amazon, which is rumoured to be preparing to release an Android tablet this autumn. Like Apple with the iPad, it has built and dominated a market for itself with the Kindle, its hugely successful e-reader.
Essential to the Kindle’s success is its relatively low price of £111, or £152 for the 3G version. To challenge Apple, it could significantly undercut the iPad to attract a viable user base. Amazon has massive cash reserves and could afford to sell its tablets at break-even or a small loss.
Its online retail empire and the Kindle brand mean Amazon has the marketing clout to take on the iPad, but on the evidence of HP’s successful TouchPad sell off, the question is whether it has the courage to put its money on the line.
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