A great article you guys have to check out by Adrian Kingsley Hughes.
He basically touches on some of the reasons that the HP Touchpad died.
More interesting for me though is the part where he talks about some of the pricing issues.
Price is another factor. When Apple unveiled the iPad, tech pundits were bowled over by the price. $499 was seen as cheap. And it was cheap – for an Apple product. Was $499 cheap for a tablet? Well, the TouchPad (which, remember, was a pretty decent tablet) didn’t sell at $499, and even a drop to $399 didn’t invigorate sales much. However, once HP dropped the price to $99 as part of its firesale, this move resulted in overwhelming demand for a product that was essentially dead and that HP would no longer release updates for. This price drop was enough to push the TouchPad to the top of Amazon’s electronics chart, above the Kindle.
So there you have it. Unless you’re selling iPads, the stampede-inducing price point for a 16GB tablet is $99. OK, maybe this is a little on the low side, but the price definitely lies between $399 and $99, maybe around the $250 mark.
I also loved this quote:
And still no one cared about the TouchPad.
The reason: People are buying the iPad not because it’s a tablet, but because it is an iPad. Apple has NOT carved out a market for tablets, Apple carved out a market for the iPad. Think about it: When Apple released the iPod back in 2001, did this create an enormous market for media players? No. It created an enormous market for the iPod.
Thats a classic.
People are buying the iPad not because it’s a tablet, but because it is an iPad. Apple has NOT carved out a market for tablets, Apple carved out a market for the iPad.
Anyway, back to pricing. I strongly feel that the sweet spot for a tablet is between $99 and $199.
Once again, Ipad 2 or Ipad 3 be damned, if Microsoft can come up with a decent tablet and subsidize the price – game over. Ipad goes straight to number 2.
I argue with my friends on this point but they all don’t realize that because they have money, they are not Joe Public.
The Ipad is a luxury product. No matter how Apple spin it, $599 for a “tablet” is a luxury – not something we need but something we want. A $99 product however is something that middle class consumers can buy 4 of. One for each of their kids.
I am hoping that Microsoft nail this one. The tablet space needs some competition.
Check out Adrian’s article here.