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Touchpad clearance price

G

greg555

macrumors 6502a
Original poster
Why do you think HP set the clearance price so low? They still would have sold out (albeit more slowly) at $149/$199 or $199/$249 but then HP would have lost hundreds of millions less.

What's the benefit (to HP and their retailers) in setting such a low price?

Thanks - Greg
 
It's a shame I missed the deals here in the UK, would have got a 16gb for my parents. Utter barg at £89, would have been a nice enough browse around the house tablet for them.
 
Disruption.

Even though some people here deny it, the TouchPad buyers are a very diversified crowd that are more than just "cheap @$$ geeks". Lots of moms and grandmas are hunting these down too and the reason is because many people want an iPad but at $500 they're priced out of the market for a perceived luxury device. And despite what people who've never used it claim, WebOS is a VERY modern mobile OS that does far more than most people require despite not having a well stocked app store.

And what does this mean to the market? Well, people like us who wanted an iPad will still buy iPads regardless of price. But people who were on the fence or who simply saw the cute commercials will now assume that Tablets are $100-200 devices and when they see Apple/Samsung/RIM prices then they'll have a harder time justifying the purchase.

HP could have easily had a 6mo plan on liquidating inventory through a series of marketing promotions (discounts/ free with printer/ giveaways) and put WebOS to rest slowly but instead they lit themselves on fire and ran across the baseball diamond. You have to admit its pretty awesome.
 
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greg555 said:
Perhaps but it will probably damage the sales of other tablets more than the iPad.

Greg
Click to expand...

iPad has what... 80% of 90% of the market? Of course this would hurt their sales more

Lets say that 100 people decide to buy a tablet. Before the HP fire sale, 80-90 of those people would have bought an iPad. 10-20 would have bought an Android.

Cue the fire sale. 100 people want to buy a tablet, but now half of them decide to save $400 and get the Touchpad.

Of that 50 people, 40-45 of them would have bought an iPad. Android loses 5-10 sales.
 
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Tarzanman said:
iPad has what... 80% of 90% of the market? Of course this would hurt their sales more

Lets say that 100 people decide to buy a tablet. Before the HP fire sale, 80-90 of those people would have bought an iPad. 10-20 would have bought an Android.

Cue the fire sale. 100 people want to buy a tablet, but now half of them decide to save $400 and get the Touchpad.

Of that 50 people, 40-45 of them would have bought an iPad. Android loses 5-10 sales.
Click to expand...

If HP sells every single one of the 270,000 they made and IF every single person that bought one of those Touchpads had intentions of buying an iPad, but didn't, that would constitute approx 1% of Apple's sales just for this past quarter. That is 1%! For one quarter. Me thinks you might want to think about that.
 
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I think the tablet market is turning out to be like the MP3 player market. Apple gets 70% share with higher priced products and the other vendors fight for the rest based on being lower prices.

So the people who would by an iPad may still do so in spite of the $99 Touchpad, but people looking at a cheaper tablet may be put off by the memory of $99 Touchpads.

Greg
 
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I actually think allot of more buyers are like me. I had no plans to buy a $500 Ipad or any pad. I just can't justify $500 for my uses at home. I be thrilled if I got one as a gift but not out of my wallet. However I can justify a $100 pretty easily. I also happen to be a fan of WebOS. So I'm looking forward to getting mine tomorrow. Yes I have my tracking number. 😀 I think allot of people are like me and just like the price.
 
Totally agree with labman. I got lucky enough because i hustled a bit when ipad2 came out so my cost of ownership was far below $500. If I had to pay full price i would never buy an ipad2. fast forward few months and my ipad usage is pretty much same as with any other ipad. I see nothing magical in it after using it
 
I know I picked up a Touchpad cause it was cheap. I have every intention on getting a iPad when I have the money to get one but the Touchpad will hold me over until then. Then it will get moved on to my Fiance or another family member.
 
Tarzanman said:
iPad has what... 80% of 90% of the market? Of course this would hurt their sales more

Lets say that 100 people decide to buy a tablet. Before the HP fire sale, 80-90 of those people would have bought an iPad. 10-20 would have bought an Android.

Cue the fire sale. 100 people want to buy a tablet, but now half of them decide to save $400 and get the Touchpad.

Of that 50 people, 40-45 of them would have bought an iPad. Android loses 5-10 sales.
Click to expand...

Pretty compelling except the part where you made up every single number to suit your argument except the prices.

There's people on this forum buying 5-6 Touchpads; there's many more who have iPads buying the Touchpad. There's no way these are lost iPad sales.
 
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A smart buyer might consider a refurbished iPad 1 from Apple for $299 and consider the $100 they didn't spend on the HP a discount on the iPad.
 
Carouser said:
Pretty compelling except the part where you made up every single number to suit your argument except the prices.

There's people on this forum buying 5-6 Touchpads; there's many more who have iPads buying the Touchpad. There's no way these are lost iPad sales.
Click to expand...
Its pretty obvious that his numbers were just an example to reinforce his perspective. While I don't necessarily agree with all of his points, I think his "made up" numbers are more realistic than citing this forum to be an accurate focus group on lost iPad sales.

In 2011 then the iPad is pretty much the ONLY desirable tablet since they've got a solid year of refinement over the competition. But by next year its possible the iPad will have legitimate and mature competition so to these people then IF they got a TouchPad (which most have) then they've completely left the "Potential iPad Customer" list for this generation and possibly next gen too. And if someone who wants an iPad buys a non-iPad then those are lost iPad sales.
 
It's not just this forum, but every place I saw, even slick deals where a good number of people are just regular bargain hunters and not tech geeks. Many people were picking up large quantities (or trying to), often for the kids or older parents who otherwise would not be buying a tablet anyway. Quite a few people, myself included, wanted to buy them just so they wouldn't have to share their iPads.

Overall, I don't think it's reasonable to assume that every touchpad sale is a lost iPad sale. Maybe 5 to 10% are, the rest wouldn't have bought an iPad anyway (too pricey, hate apple, too young, too old, etc.) or they already own an iPad too.

Another common theme among those interested in the tablet on various forums is they wanted it to hold them over until iPad 3 comes out, in which case it's just delays sales for Apple. Plus, where are all the people who got them going to go once their tablet breaks or they start wanting something a little better? They will have learned to love having a tablet around and the iPad may well be their next purchase.
 
Would they have lost $100s of millions less? I don't know the details of their agreements, but we do know that Best Buy was on the verge of sending them back to HP, possibly with a per unit penalty to HP. ThenHP would have to find somebody else to liquidate them. All that shipping around costs. Even if they convinced Best Buy to keep them on the shelves for 6 mos. or more, shelf space costs money too, and all the time the product is getting more outdated (iPad 3 is only 7 months away). Cutting their losses now is a sure thing.
 
qtx43 said:
Would they have lost $100s of millions less? I don't know the details of their agreements, but we do know that Best Buy was on the verge of sending them back to HP, possibly with a per unit penalty to HP. ThenHP would have to find somebody else to liquidate them. All that shipping around costs. Even if they convinced Best Buy to keep them on the shelves for 6 mos. or more, shelf space costs money too, and all the time the product is getting more outdated (iPad 3 is only 7 months away). Cutting their losses now is a sure thing.
Click to expand...
Makes sense. But I do wonder about the OP's point still because $100 is such a a ridiculously low price that its caused mayhem.

Maybe HP simply underestimated the publics desire for a low cost tablet. Who knows, maybe if they did know the demand then they'd scrap the TouchPad in favor of a simplified $200 WebOS tablet that was cost effective rather than blowing the whole thing up.
 
Mac.World said:
If HP sells every single one of the 270,000 they made and IF every single person that bought one of those Touchpads had intentions of buying an iPad, but didn't, that would constitute approx 1% of Apple's sales just for this past quarter. That is 1%! For one quarter. Me thinks you might want to think about that.
Click to expand...

HP has produced far more than 270,000 touchpads. It was reported that BestBuy had procured 270,000 touchpads for themselves.

I'm trying to use the $100 million writeoff to estimate the number of touchpads produced and the numbers don't add up.

Let's say that the touchpad costs $300 to manufacture. At a selling price of $100, HP takes a $200 loss on each tablet sold. $100 million divided by $200 results in 500,000 touchpads.

Given that touchpads sell-through at the $500 (and subsequent $400 mark) was about 10%, that would mean that about 50,000 units were sold at full price.

Could they have only manufactured 550,000 units in total? Do my numbers add up or am I missing something obvious?
 
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