Analyst not thrilled by TouchPad prospects
While the webOS faithful are certainly excited for the TouchPad to arrive on the first of next month, there are some analysts, specifically Mark Moskowitz of JP Morgan, that are looking at the tablet device with a cautious eye. The problem, he says, is that the price points of the TouchPad when compared to the iPad, and the success (or lack thereof) of other non-Apple products over the past year will make it difficult for the HP device to gain any significant market share with webOS this year. Says Mr. Moskowitz:
"While we expect HP’s webOS platform to be a differentiating factor compared to the many Android tablets expected to reach the market, we do not think the price points on the TouchPad are aggressive enough to attract the incremental buyer from the iPad. Plus, the lack of wireless connectivity and limited storage options are a setback. We will look to additional data points as the TouchPad hits the market in coming weeks, but for now, we are lukewarm."
Ouch. But are these complaints the end of the story? Is the TouchPad doomed to fail just because Mokowitz says so? He says right at the start of that quote that HP's webOS will serve as a differentiating factor for those people looking for something other than iOS or Android devices, and if we take a look back over the last few weeks, we can find some other interesting statements.
On June 1st, for example, Moskowitz told us that manufacturers of non-Apple tablets were going to see a large cut in the number of products they're building this year. They believe, quite simply, that they'll build more products than they'll actually sell, and a large surplus of these types of devices will be costly for the competition (He does say that Apple will likely continue with 38 million devices built this year). On June 9th he again made cuts to his previous estimates, and even said that the PC market (which HP is currently leading in) will potentially see a drop in greater than 0.2% (as more people go to the iPad and other Apple products).
With all of that said, things are looking pretty grim for the webOS tablet, and even HP in general with their PC division. Right? Well, maybe not. Moskowitz is making those statements based off of current trends with devices that have had little or no success, running on an operating system that has had trouble gaining traction (Android 3.0) and has had compatively minimal advertising support when weighed against the iPad.
Enter the HP TouchPad, or the "differentiating factor", if you will. This is a device that needs to have the polish that other tablets are lacking, and a matching price to the iPad just to make a statement. HP cannot afford to spend $1.2 billion on a company and product opportunity to let it fall into the pit that is mediocre tablets. HP needs a device that says "We aren't the iPad, sure. But we also aren't the Xoom, PlayBook, Galaxy Tab, or Transformer. We've built this product the way you want it. Like nothing else."
Obviously, we still have to give all of this some time to actually see what's going to happen. We're hopeful and confident that HP will put out a product (and the accompanying marketing campaigns) that will show consumers that they can raise their standards again for non-Apple products. It's entirely possible that Moskowitz is right in his predictions, but we're hoping this ends up as another case of an analyst spending too much time with the crystal ball and not enough with the product. The TouchPad is not an Android, Windows, Apple, or RIM tablet - it's "Number One Plus", remember?