The fire sale of the HP TouchPad just weeks after it entered the market shows how difficult it is for manufacturers to compete with the Apple iPad, according to analysts.
The TouchPad went on sale at the beginning of July for $499, but over the weekend, following news that HP plans to exit the webOS hardware space, HP issued a declaration to retailers to start liquidating TouchPad inventories.
The company slashed the price by $300, saying: “HP will be lowering the price of the TouchPad beginning Saturday 8 August 2011. This is the lowest price ever for the TouchPad, so please post it as soon as it goes live.”
The 16GB TouchPad is now priced at $99 while the 32GB TouchPad is $149. Following the deep price cuts, the tablet quickly sold out at retailers across the US, and the HP Web site crashed over the weekend.
Customers who had purchased the TouchPad at full price also have the chance to get a full refund, or to be paid the balance of the fire sale price.
Desperation
Some analysts claim the fire sale and resultant frenzy for the TouchPad indicates that tablet pricing is shot. It is said the rapid sale of the tablets indicated the importance of price for consumers, and the potential path to market gains on Apple.
Analyst and MD of World Wide Worx Arthur Goldstuck says the fire sale will have little impact on the market, since the sale is a result of the TouchPad's failure as a formal market entry.
“It smacks of desperation,” says Goldstuck. “It just shows how difficult it is for manufacturers to compete with the iPad, since people will expect any device that is more expensive to be better than an iPad - and at the moment, that's just not going to happen.”
According to Goldstuck, Samsung is Apple's closest competitor with its second-generation Galaxy Tab 10.1. “About a year from now, we'll really see Apple and Samsung going head-to-head,” he says.
Dead in the water
“People may buy the TouchPad simply because of its current low price, but the problem with that is that there is no development path for webOS, so it's a risky buy.
“There are other no-name brand type tablets such as the Colpad that have arrived in SA and are selling for R999,” says Goldstuck.
“While the Colpad may be slow and doesn't compete directly in the market due to its price and far lower specs, it's still an Android device so it comes with the advantage of that supporting ecosystem.
“For that reason alone, people may prefer to opt for a device like that rather than a TouchPad, with its ecosystem that's dead in the water.”
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