HP TouchPad at $699 Solid No. 2 to iPad: Analysts

HP's TouchPad promises a sold entry into the growing tablet canon, second to Apple's iPad but well-positioned to challenge the Motorola Xoom and RIM PlayBook.

The tech world was not exactly blown away by HP's TouchPad when the company introduced the WiFi tablet Feb. 10, but most analysts came away convinced the machine was a solid No. 2 entrant to chase Apple's iPad.

At a rumored $699 price point, the TouchPad could be more enticing than the alleged $799 price tag on the Android 3.0-based Motorola Xoom or Research in Motion's PlayBook, which is slated to be tethered to Blackberry devices.

While the TouchPad will eventually need to come in 3G and 4G versions, Forrester Research analyst Sarah Rotman Epps said the device's 9.7-inch screen will make it easier for developers to bring their applications over from the iPad.

The device is also equipped with several features that differentiate it from the current iPad. The short list includes: front-and-rear cameras for video calling, multiple data ports, wireless printing capability and Touchstone technology to let users share e-mail, video and other applications merely by touching a phone to the TouchPad.

Of course, the iPad 2 will launch by this spring, and the device is expected to have a dual camera for Facetime chats and likely a USB port or two. That would negate some of the advantages to the TouchPad.

HP also has strong channel advantages over, say Android tablet makers such as Samsung or Motorola, which are primarily relying on wireless carriers to sell their tablets.

Epps said a recent survey of 4,000 U.S. online consumers revealed that 40 percent of consumers said they'd prefer to buy a tablet from retailers like Best Buy, compared to 11 percent who said they prefer to buy from a mobile-service provider. Even so, she added that Apple's iPad enjoys placement not only in Best Buy and other retailers but its own Apple Store.        

The downside? While HP has a strong consumer brand, webOS, which HP gleaned from its $1.2 billion acquisition of Palm, "is a complete unknown to consumers." Most consumers prefer to have Microsoft Windows on a tablet compared to webOS.

 "This product has a chance to beat RIM and any individual Android tablet, but not Apple, not this year or next," Epps wrote. "Consumers will consider the TouchPad, and then buy an iPad. iPad sales will be the lion's share of the 24.1 million we forecast will sell to U.S. consumers in 2011."

Meanwhile, some folks got hands-on demos after the launch. Barclays analyst Ben Reitzes came away impressed by the TouchPad's software and syncing capabilities. With HP continuing to invest in Palm's Pre brand, it could provide a good link between the tablet and future smartphones.

"Along with a nice OS, we believe that HP's channel strength, link to its printing franchise and overall brand strength could enable it to be one of the few relevant tablet players far behind Apple over the long-term," he said.

J.P. Morgan's Mark Moskowitz added: "For HP," he said, "we believe the initial mission is to capture meaningful share among the non-iPad tablets, i.e., Android and Windows-based devices."

The current analyst consensus is clearly that the TouchPad is no iPad killer, it stands well-positioned, versus the PlayBook, Xoom and a litany of other Android 3.0 tablets.