I had a chance on the way to the office yesterday to take stock of the great HP TouchPad sell-off. After HP announced that it’s getting out of the computer, phone, and tablet business, it dropped the price of its mostly unloved TouchPad tablet to $100. According to the radio report I heard, the result was that HP's servers couldn't keep up with interest.
The TouchPad buying frenzy revealed a clear dichotomy in the tablet market: people will pay handsomely for an iPad, but they have no interest in paying anything more than rock-bottom for other tablet devices.
I don’t know why HP needed to make such a drastic move for people to figure this out. Back in July, at BGR.com, my favorite tech writer, Zach Epstein, outlined why iPads are succeeding wildly while all other tablets are turning in meh numbers. It’s simple, he writes:
Apple’s iPad is a gorgeous, elegant device that gives consumers the opportunity to purchase a large-form Apple product for a mere $499, and that in itself plays a huge role in the tablet’s popularity. Other vendors do not carry the same hype and allure that Apple is enjoying at the moment, and that is a big reason their tablet sales are barely a blip on the radar; of course there are other equally important reasons such as the lack of intuitive and distinguished user experiences, but in the end, these vendors are building products that consumers simply aren’t asking for just yet. I’ve written this before, but it bears repeating: Consumers don’t want tablets, they want iPads.
Hear hear! But I would amend this, in light of the TouchPad event, to say that consumers don’t want tablets, they want iPads -- unless they can get a much, much cheaper tablet than the iPad. Now, obviously, the run on TouchPads was all about consumers getting a Porsche for the price of a Chevy. In fact, Zach himself had many good things -- and a few not-so-good things -- to say about the TouchPad when it came out:
Looking past the device’s deficiencies, I found the TouchPad a pleasure to use during my testing. Even with the occasional bogging, the UI is gorgeous and webOS is a pleasure to use on a slate form factor. As sad as this statement may be considering the downsides I’ve listed, I definitely prefer the TouchPad over almost every tablet I’ve tested to date.
Clearly, there’s a market for a tablet that serves up some kind of rudimentary tablet experience at a super-low price. A “good enough” tablet that isn’t trying to be an iPad, but that does a lot more than a Kindle or other e-reader. The lesson here is that consumers will always respond to price -- even if manufacturers believe that they’re obsessed with features.
The TouchPad was a full-on iPad competitor, so at $100 it was far more than good enough -- it was a steal. Figure out how to cover that gap, however, and you could bring to market the iPad’s first serious rival.