HP's TouchPad fire sale is apparently not setting a trend for RIM and Android OEMs, according to analysts. The bottom line is that $100 tablets are money losers.
Hewlett-Packard (NYSE:HPQ) last week waved the white flag for tablets and smartphones based on its HP webOS operating system.
Anyone thinking Research In Motion (NYSE:RIMM) or other OEMs are doing the same against the rising tide of Apple (NASDAQ:AAPL) iPads, which command over 80 percent of tablet market sales worldwide, would be mistaken.
Motorola and Samsung did not respond to questions about whether or not they plan to discount their Motorola Xoom and Samsung Galaxy Tab 10.1 slates, respectively.
RIM, which is also struggling to compete against the iPhone and handsets based on Google's Android platform, told Forrester Research analyst Sarah Rotman Epps the company stands fully behind its BlackBerry PlayBook
and the QNX operating system that powers it.
Epps quoted Robert Crow, vice president of industry and government relations for RIM: "This is our platform, and this is our future," said Crow, referring to the QNX platform generally and PlayBook device specifically. "We stand 100 percent behind it."
That's a strong testament, and a bold bet RIM has placed on the future, which also includes QNX-based superphones for early 2012.
But the tablet market is different. No one will confirm this, but Best Buy reportedly saw tepid HP TouchPad sales of only 25,000 to 50,000 units. Apple's iPad has sold some 30 million units. Clearly, HP believed it was too far behind in the market to make a difference.
The company also reportedly lost somewhere between $140 million and $300 million on building the TouchPad
, which is selling for $100 a pop at Best Buy and most other places that deigned to carry the tablet
. And by all accounts, these devices are selling super fast.
Which brings to mind the obvious question: Should Android OEMs and RIM begin severely discounting their slates? Supposedly, the PlayBook has sold between 500,000 and 1 million units, while Android "Honeycomb" and other Android tablets may have sold 1.5 million units total. Reasons for the tepid sales are the bugginess of software in both the Android tablets and the PlayBook, as well as the paucity of applications for both platforms.
Considering that consumers can buy PlayBooks and Xooms for under $500, compared with $500 for an iPad 2 with a proven clean software track record and over 100,000 apps, it's no shocker that analysts commonly refer to the tablet market as the "iPad market." People don't want other tablets; they want iPads.