Adrian Kingsley-Hughes is a wise man indeed

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.

Some excerpts:

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. 

So true.

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.

  • Rodney Jenkins

    I agree with you. At this point, any platform that has an Ipad going for $99 would sell 1 million units in a day (worst case).

  • http://meercat9.com/ Billy Moffat

    I know price is a very large deciding factor, but the reason many people aren’t willing to pay $500 for a tablet (or even $400) is because they can’t replace laptops. A phone OS, no matter how rich the application ecosystem, is still a phone OS. It hardly supports peripherals, the interface is simplistic at the expense of functionality, your software starts from scratch and to stubbornly try and replace your laptop with a tablet will just take away your productivity.

    From what I’ve seen, if done right, a Windows 8 tablet with easy access to plug in your USB keyboard (and mouse) from home to get the full-feature functionality that most of us still need at least sometimes – will be very worth the $500 price tag. You can buy solid netbooks for $300 that are more or less the same size, with the same 10 hour battery life, with a full-featured operating system and inbuilt keyboard. Tablets might indeed be the future, but until you can do everything on it you can on a netbook, the smart budget-aware consumer who doesn’t buy into shiny fads of “luxury” Apple products will doubtfully be entering the market.

    Something like the Asus Eee Pad Transformer running Windows 8 that’s price around $500 would be an amazing start. The only downside of course is that a full-featured OS would need at least 2GB of RAM to be zippy enough to stifle the old complains of Microsoft haters. I’m sure by next year though a tablet without a dual-core (or even quad-core) processor with less than 2GB of RAM will be endangered though anyway. We have phones that are powerful enough to run operating systems with no limitations – the only thing that seems to be stopping it is the interface.