Am I the only one thinking that this "fire sale" might be a ploy to push adoption of WebOS as quickly as possible? The TouchPad has to be top of the sales charts right now.
Or it could be me playing too much Deus Ex Human Revolution :p
But to what end? I thought they were planning on putting WebOS in their computers as a dual boot/quick boot with Windows, but now they say they are planning on spinning off their computer division as a separate company. So even if WebOS is the second most popular tablet OS now, where does that leapfrog get them?
The 32GB TouchPad has a Bill of Materials of $318. That doesn't include R&D, support, marketing, and other costs. So for every TouchPad HP sells, they are taking a loss greater than the $149 sticker price. Even if they manage to grab a strong position in market share this generation where does it get them? If HP does an about face and releases a TouchPad 2 back at regular prices points would people who paid $99/$149 for the first gen really carry over to paying $499/$599 for a 2nd gen device? The price of a 2nd gen device might even need to be higher to recoup the losses of the first gen. Surely, HP can't afford to sell a 2nd gen device at a loss.
Expanding the user base does allow HP to negotiate a higher price as they try to sell WebOS to another company. Although a potential buyer will still face similar issues where customers expect a cheap tablet and having to push WebOS against an entrenched Apple iPad in the high-end and Android which has broad manufacturer support.
There is no way in hell HP would ever be able to recoup the losses of selling $99 TouchPad. As a new TP owner, one look though the WebOS app store will remind the more conspiracy minded out there is no possibility HP could ever make an additional $150 or so they'd need to break even through app sales or otherwise. It would be great if HP could, but there just aren't many apps to buy. Also lacking are many of the high margin accessories which would help (also like game consoles -- take a loss on the Xbox, make it up with two controller sales). So getting WebOS out into homes at any cost only gets them more interest when they try to sell it, perhaps even some more money as well-- but not enough to get them back to even.
Maybe it was not their intention but the biggest problem about the Touch pad was it had no market penetration it was late to the game. As such they needed to build a customer base to get developers on board.
While I do not think it was their original goal I think the execs at HP have seen the backlash from people concerning their recent stupidity and maybe they will look to capitalize on their new very large customer base. If nothing else it could get app development moving.
I'd disagree. There are many devices - when originally released - that sold for less than their BoM; the difference was made up in the sales of accessories and software, like video game consoles. If you've seeded the market with enough devices, then you've solved part of the chicken-and-egg problem that exists in getting developers to support a given platform. The trick is to now rapidly build up the catalog, get people buying apps, and reduce the BoM as quickly as you can.
And yes, while Apple is entrenched in the high-end, if the BB inventory numbers were representative (and I see no reason why they were not, based on the "live" inventory numbers for tier 3 sellers), HP may have moved nearly a million tablets, which seems somewhat larger than the total of all the Android Honeycomb-powered tablets. While the Asus has been more popular than the others, so far Android has been more bark, less bite.
If HP was smart, they'd use this as a carrot to entice developers, developers, developers, restart production with tablets priced $150/$200 with a BoM $50-$60 higher and aim to make up the share in accessory and software sales. 40 $1 apps plus a case should make up the BoM difference.
My touchpad downloaded the update yesterday and applied it around 3:00 P.M. pacific time, it notified me about it after I plugged it into the wall (it said the update would install automatically once battery life was high enough, took about an hour). I wish I knew about the open office update though, I just sprung 5 bucks for Tapnote which is a pretty lackluster app.
@aegisofrime I think your might be right. There is nothing to stop them from backtracking (unless they are in some deal to sell already), if there is more serious interest. It might also be their way renovating before selling.
I know HP's core business is not processor design or manufacturing but, if AMD can fire a CEO for not taking care about a hugely emerging market, I do not see why an HP cannot backtrack in the least or offshoot another company with a stake in it. IMO, just excess greed or lack of vision prevented it from seeding the market with lesser profits (like it has now) before attempting to rake the big bucks.
It only gets worse from there. Quickoffice is anything but quick - it's terribly slow. I think they wrote it in HTML + JS (i.e. a non-native application), which makes the package very unresponsive. WebKit can't even keep up with scrolling on spreadsheets.
HP is just rushing now to get positive public opinion out on the net so they can sell the WebOS division for a better price. It's actually quite a good strategy to take a losing asset and give it away and drum up interest to get more value out of it.
I think the next company to pick it up has to be a niche player. HTC would've been the best instead of Samsung who are poor at software.
Motorola would've been a decent choice had they not been acquired.
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aegisofrime - Tuesday, August 30, 2011 - link
Am I the only one thinking that this "fire sale" might be a ploy to push adoption of WebOS as quickly as possible? The TouchPad has to be top of the sales charts right now.Or it could be me playing too much Deus Ex Human Revolution :p
tipoo - Tuesday, August 30, 2011 - link
But to what end? I thought they were planning on putting WebOS in their computers as a dual boot/quick boot with Windows, but now they say they are planning on spinning off their computer division as a separate company. So even if WebOS is the second most popular tablet OS now, where does that leapfrog get them?ltcommanderdata - Tuesday, August 30, 2011 - link
The 32GB TouchPad has a Bill of Materials of $318. That doesn't include R&D, support, marketing, and other costs. So for every TouchPad HP sells, they are taking a loss greater than the $149 sticker price. Even if they manage to grab a strong position in market share this generation where does it get them? If HP does an about face and releases a TouchPad 2 back at regular prices points would people who paid $99/$149 for the first gen really carry over to paying $499/$599 for a 2nd gen device? The price of a 2nd gen device might even need to be higher to recoup the losses of the first gen. Surely, HP can't afford to sell a 2nd gen device at a loss.Expanding the user base does allow HP to negotiate a higher price as they try to sell WebOS to another company. Although a potential buyer will still face similar issues where customers expect a cheap tablet and having to push WebOS against an entrenched Apple iPad in the high-end and Android which has broad manufacturer support.
ckryan - Tuesday, August 30, 2011 - link
^True
There is no way in hell HP would ever be able to recoup the losses of selling $99 TouchPad. As a new TP owner, one look though the WebOS app store will remind the more conspiracy minded out there is no possibility HP could ever make an additional $150 or so they'd need to break even through app sales or otherwise. It would be great if HP could, but there just aren't many apps to buy. Also lacking are many of the high margin accessories which would help (also like game consoles -- take a loss on the Xbox, make it up with two controller sales). So getting WebOS out into homes at any cost only gets them more interest when they try to sell it, perhaps even some more money as well-- but not enough to get them back to even.
PubFiction - Tuesday, August 30, 2011 - link
Maybe it was not their intention but the biggest problem about the Touch pad was it had no market penetration it was late to the game. As such they needed to build a customer base to get developers on board.While I do not think it was their original goal I think the execs at HP have seen the backlash from people concerning their recent stupidity and maybe they will look to capitalize on their new very large customer base. If nothing else it could get app development moving.
vnangia - Tuesday, August 30, 2011 - link
I'd disagree. There are many devices - when originally released - that sold for less than their BoM; the difference was made up in the sales of accessories and software, like video game consoles. If you've seeded the market with enough devices, then you've solved part of the chicken-and-egg problem that exists in getting developers to support a given platform. The trick is to now rapidly build up the catalog, get people buying apps, and reduce the BoM as quickly as you can.And yes, while Apple is entrenched in the high-end, if the BB inventory numbers were representative (and I see no reason why they were not, based on the "live" inventory numbers for tier 3 sellers), HP may have moved nearly a million tablets, which seems somewhat larger than the total of all the Android Honeycomb-powered tablets. While the Asus has been more popular than the others, so far Android has been more bark, less bite.
If HP was smart, they'd use this as a carrot to entice developers, developers, developers, restart production with tablets priced $150/$200 with a BoM $50-$60 higher and aim to make up the share in accessory and software sales. 40 $1 apps plus a case should make up the BoM difference.
vnangia - Tuesday, August 30, 2011 - link
Sorry, 40 $1-$5 apps plus a case should make up the BoM difference.V-Money - Tuesday, August 30, 2011 - link
My touchpad downloaded the update yesterday and applied it around 3:00 P.M. pacific time, it notified me about it after I plugged it into the wall (it said the update would install automatically once battery life was high enough, took about an hour). I wish I knew about the open office update though, I just sprung 5 bucks for Tapnote which is a pretty lackluster app.yes - Tuesday, August 30, 2011 - link
@aegisofrime I think your might be right. There is nothing to stop them from backtracking (unless they are in some deal to sell already), if there is more serious interest. It might also be their way renovating before selling.I know HP's core business is not processor design or manufacturing but, if AMD can fire a CEO for not taking care about a hugely emerging market, I do not see why an HP cannot backtrack in the least or offshoot another company with a stake in it. IMO, just excess greed or lack of vision prevented it from seeding the market with lesser profits (like it has now) before attempting to rake the big bucks.
yuchai - Tuesday, August 30, 2011 - link
Looking at the screenshot above, I don't know if any sane person would want to try to edit a spreadsheet on this platform.ViRGE - Tuesday, August 30, 2011 - link
It only gets worse from there. Quickoffice is anything but quick - it's terribly slow. I think they wrote it in HTML + JS (i.e. a non-native application), which makes the package very unresponsive. WebKit can't even keep up with scrolling on spreadsheets.vision33r - Tuesday, August 30, 2011 - link
HP is just rushing now to get positive public opinion out on the net so they can sell the WebOS division for a better price. It's actually quite a good strategy to take a losing asset and give it away and drum up interest to get more value out of it.I think the next company to pick it up has to be a niche player. HTC would've been the best instead of Samsung who are poor at software.
Motorola would've been a decent choice had they not been acquired.