Hewlett-Packard has slashed prices for its TouchPad tablet, a possible sign of sales trouble. If the TouchPad fails, Apple and Microsoft stand to benefit.
intended the TouchPad to battle toe-to-toe with Apple's iPad. The tablet
offered solid hardware, paired with the webOS operating system inherited from
the Palm acquisition in 2010. It had a multimillion-dollar marketing push,
accompanied by any number of high-profile media reviews.
But now there
are indications that the TouchPad is in trouble. A mere six weeks after its
debut, HP has slashed the tablet's price by $100, to $399 and $499 for the 16GB
and 32GB models, respectively. As the Wall Street Journal helpfully pointed out
Aug. 11, that's a 20 percent cost reduction. In general, businesses don't make
those sorts of cuts to a new product's sticker price unless they want to spur
adoption, perhaps because of anemic sales.
HP needs its
mobile initiatives (including tablets and smartphones) to succeed in a big way.
PC sales are slowing-one of the reasons why Microsoft's Windows-related revenue
declined 1 percent
in the company's fiscal fourth
quarter. Meanwhile, the mobility segment is gaining users and unit sales at an
impressive rate. The tech world is undergoing a paradigm shift, one in which
mobile devices are rapidly overtaking PCs as the center of people's everyday
of Palm was supposed to be its ticket into the mobility arena. Despite its
checkered history, Palm retains considerable brand equity. In addition to
leveraging Palm's assets into the TouchPad and a new generation of smartphones,
HP also intends to load webOS onto desktops and laptops-potentially creating a
broad, multi-device ecosystem along the lines of what Apple's done with its
In many ways,
though, the TouchPad needed to be the "spark" igniting that webOS ecosystem.
And while it's far too early to declare the device a total success or failure,
drastic price cuts at this stage of the game do not bode well for early
TouchPad fails, it will benefit any number of companies, particularly if it
curbs webOS development on other form factors. Apple will have crossed out yet
another iPad competitor. Microsoft will no longer face the potential headache
of webOS as a competitor to Windows on traditional PCs and tablets. Google Android,
Windows Phone and Research In Motion's BlackBerry OS will all enjoy a little
more breathing room.
said, HP seems determined to make the TouchPad succeed. Earlier in August, the
company pushed an over-the-air software update for the tablet, designed to
tweak many of the issues cited by reviewers upon its initial release. But will
that, combined with the price cuts, spur adoption among consumers and
businesses-especially with the iPad continuing to dominate tablet sales?
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