Editorial: Why HP must match the iPad on price, not undercut | webOS Nation
 
 

Editorial: Why HP must match the iPad on price, not undercut 126

by Derek Kessler Mon, 23 May 2011 2:32 pm EDT

Consumer perception is a tricky thing to comprehend, let alone predict. It’s difficult to understand the way the average consumer thinks, to put yourself into their shoes and figure out why they make the decisions they do, especially when you’re as invested in the product as a designer, developer, executive, blogger, or fan might be.

There’s been a lot of chatter about the pricing for the upcoming HP TouchPad webOS tablet, with a lot of disappointment about how it seems like they are shooting to match the iPad on price and not undercut it by up to a hundred dollars. While there are many factors that could enable HP to lower the TouchPad’s price and take a loss while shooting for increased market share, such a move could seriously backfire.

Customers are used to paying full price for a tablet, unlike in the phone world where the cost is subsidized over time. Like when buying a car of a house, they ask themselves, “Why is that one so much cheaper?” The same happens with electronics (especially computers), though most of the time there are specs that can be compared on an apples-to-apples basis, with only a portion of the cost accounting for less quantifiable items like build quality and aesthetics.

If you place a TouchPad and iPad 2 next to each other, the comparison is interesting. The TouchPad has a better front-facing camera, while the iPad 2 adds a rear-facing unit that’s not that great. The iPad 2 is thinner and lighter, and made of machined metal compared to the TouchPad’s plastic shell. The TouchPad has a dual-core 1.2GHz processor compared to the iPads 1GHz dual-core chip, and they match each other in RAM, storage capacity, and screen size and resolution. The iPad has a monstrous advantage on the apps front, while the TouchPad appeals to users seeking a seamless ecosystem between their phone, computer, and the cloud (even though most don’t know nor care what “the cloud” is, they just want it to work).

Physically, sitting next to each other on a shelf, the two devices are close enough that the average consumer would expect them to be equally priced. Most buyers are more saavy and skeptical than salespeople, bloggers, and techies give them credit. They may not speak in terms of GHz and GB and PPI, but they can make comparisons of how the well the device actually works (which in the end is more important than the number of GBs).

So when the potential buyer is presented with two seemingly equally-matched tablets, one priced $50 or $100 lower than the established competitor, they’re going to ask the question of “Why?” The average consumer doesn’t think in terms of marketing, so the question of what does this price mean inevitably results in the conclusion that it’s somehow an inferior product. It’s like that surprisingly cheap car or too-good-to-be-true house, for all they know there’s flood damage and termites. In the case of a tablet, less expensive at the same size equates to cheaper.

Of course, all this setting the price equal to avoid the perception of inferior quality won’t mean a darn thing if it’s actually inferior quality. The average consumer can see that, and HP’s going to have to make sure the plastic body of the TouchPad can measure up in endurance, and more importantly, solid feeling with the iPad. HP’s own design guidelines for the TouchPad set out with the iPad squarely in their sights. Matching and exceeding the iPad won’t matter for much if consumers are confused by the message sent by the price.

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126 Comments

Interesting take. On the one hand, I understand the lower price must mean "cheaper" But on the other hand, lower price for the "same" is a no- brainer. I would go with $50 cheaper and hope the marketing campaign can educate the masses into buying.

Auto manufacturers have been doing this for decades. GM is the best-known for it. A single chassis would be used for Chevrolet, Pontiac, Buick, and Cadillac models. There was little difference between the Chevy and Pontiacs; brand loyalty was used there. Buicks would be more expensive, and Cadillacs were the most expensive. People who could afford more bought the more expensive brand because of the perception that paying less means buying an inferior car. GM's profits on the higher end are much more than the lower end both in gross margin and in percentage based on this perception, even though there is little and sometimes almost no difference between the final products aside from a little style difference or a couple of extra speakers.

I think you're oversimplifying this a little bit... while the same chassis was used for multiple sub-brands, style and speakers weren't the only difference. In most cases, the higher priced models (Oldsmobile, Buick and especially Cadillac) came standard with things that were options on the Chevy. I believe there were also options available on those higher end cars that weren't available on the Chevy.

I think that the TouchPad could do OK if the TouchPad base price matched the iPad 2 base price of $499. But the TouchPad starts out $100 over the iPad 2.

Ask someone at Best Buy how the Xoom is selling at $599 especially now that they can get the Acer Iconia at $449.

The Samsung Tab 10.1 coming next week is thinner, faster, and lighter than the iPad 2 but unfortunately is only going to match the iPads $499 base price.

If you want to take on the established market leader, beat or at least match every spec and then undercut the price just as Honda, Nissan, Toyota, Hyundai, and now Kia have shown.

The Asus Transformer is $399 and as fast as anyone can get them in they sell out.

That's the 32GB TouchPad that is starting out at the $100 more than the 16GB iPad 2. When the 16GB TouchPad comes out (it was announced way back when), the presumption is that it will be the same price as the iPad 2.

(Remember that the 32GB iPad 2 is the same price as the 32GB HP TouchPad.)

I thought the only price for the TouchPad that has been leaked is for the 32gb WiFi version ($599). This is on par with (not $100 more than) the 32gb WiFi only iPad.

You are totally incorrect, as is Derek, and if HP continues down this path they will find out the same thing. Take on the market leader with a similar product at the same price and people will WILLINGLY buy the market leader.

Good luck with that strategy HP. (face palm)

All they have to do is show the touchpad with the touchstone and blutooth keyboard in walmart and they have a market. People will say "Hey that is awesome, I can set it down and it charges then use it as a tablet device when I leave the home." Instantly, the touchpad will be viewed as a computer + a tablet vs Apples single use tablet. This will capture all those wanting to buy a laptop or a computer, or apple device.

i agree, keep it the same price as the ipad2. but maybe hp can offer a rebait or discount if you have a pre3 or veer or another (new webos) phone that can work together with thier ecosystem.
maybe even a gift card for the "app catalog" or something to use promo codes. that should help developers at the same time.

Does anyone know if SPRINT is getting the Touchpad? Will it have 3G or 4G?

A $50 discount isn't the issue, but a $100 discount for something that many will see as generally the same quality for build and such WOULD trigger a "what is wrong with this device to make it so much cheaper?" question.

Now, starting it with a SALE price, so early adopters get a discount would be an interesting solution, where the normal price IS the same, but because people are buying it at launch(give or take a month), they get a discount. This would also help with the "early adopter blues" when you get something that is so new, it still has problems.

Why is this allowed?

I agree 100%. If it's priced lower than the iPad, I think most people will perceive it as a cheaper knock off.

iPad set the standard for tablets, including the price. I think most people expect to pay iPad prices for their tablets.

Say you were going to buy a Ford (ipad2). At the last moment Mercedes (touchPad) called and said we will sell you our car, and for $1,000 less than the Ford.

You would say, no thanks, since it's cheaper than the Ford I was going to buy, it must not be as good?

Please.

So you are saying...No one know what WebOS/Touchpad is, but if you Price it the same as iPad2, People will magically say, wow if it's priced the same it must be just as good, and even though i know next to nothing about it. And Buy it?

Maybe you'll like this one better... When Hundai first started selling in America they were much cheaper than other car companies and slowly raised prices once people learned the brand and saw that their quality was close to others in their class.

People still perceive Mercedes to be better than Hyundais.

I think in the car world people settle for cheaper cars than Mercedes (or BMW or fill-in-your own premium brand) because they can't afford Mercedes.

In the tablet world, the extra hundred dollars on a one-time purchase probably doesn't mean much. People can stretch their budget an extra hundred dollars by not going to dinner a couple of times.

I think a better way to put it would be a flashy Lexus with lots of accessories vs an all wheel drive Subaru or the like, not quite as flashy but with better situational functionality that should be apparent out of the gate.

Clearly you were not a driver when Hyundai hit the US.

The Excel was a horrible car and almost killed Hyundai's car business here. It took 20 years for Hyundai to overcome most of the stigma for poor quality in exchange for poor price. It has only been over the past 6-7 years that they have begun to establish a reputation for Japanese level quality and exceptional value for money.

Hundai has a stigma against their brand, no one wants a Hundai, even thought they got some pretty cool looking cars now adays... If they rebranded some of their new cars Imight have bought one, but like i said no one wants a Hundai, no one looks cool driving a Hundai...

Seriously, look at car sales numbers. Hyundai is on pace to sell a couple hundred thousand Sonatas this year. It is one of the top selling sedans in the US.

For people who care about value and performance for their dollar more than appearing cool (although Hyundai is building some really good looking cars right now), Hyundai is a far better option than a Honda or Toyota showroom.

You're statement is now false, because I want a Hundai.

Even in your last example there are people out there that WILL NOT buy a Hundai because they perception is that it is cheap.

Like it or not, if there is a well known brand and another one that says they are just as good with a $50 difference, some if not most folks will pay the extra $50 to get the well known brand.

That's why Bose, Jaguar, Marantz, etc, etc, etc don't have lower priced products. Because of perceived cheapness.

When Hyundai started selling in the late 80's they were cheaper because they WERE lower quality. The Excel was a terrible car and truly a case of you get what you pay for.

However, TODAY'S Hyundai is an excellent example, now they are equal in quality to Honda and Toyota while offering much more for your dollar.

This is what has mystified me about the Palm strategy even before the HP purchase. Palm has always chosen to simply match Apple, never exceed. For all that I firmly believe that webOS is far superior to iOS, the depth and breadth of the apps and accessories offered for the iPhone and iPad are astonishing.

webOS is not enough better than iOS to make up for the far greater number of things you can do with an iPad and iPhone. I hope this isn't always true, but my experience with the Pre doesn't give me much hope. Other than the touchstone, which is nice, but I never felt bad for not having, what major accessory is offered for the Pre?

So for the same $$, HP gives me a marginally faster processor and a better OS, but one with a small fraction of the available apps and accessories. Again, I just don't understand the thinking here. HP offers no compelling reason to buy a webOS product over the comparable iOS.

The problem with this comparison is that HP is not Hyundai. HP already has a strong brand, but not in tablets. So they need to translate that brand to the tablet market. If they undercut the price they will signal that this is an inferior HP product.

Also Mercedes wouldn't keep its status for very long if they keep on underpricing Ford.

It's a analogy people!

It's a really bad one as the two typically don't sell similar products. Maybe if you used Toyota and Honda, it would make more sense.

Precisely. Which is why it should actually apply to the situation, unlike yours.

Is the Mercedes made out of plastic?

Wow this analogy cannot be more incorrect (read: backwards) as far as market and mind share at this point. If you want to compare apples to apples, in the current market, apple would be Mercedes (able to sell anything they make at a premium). HP/WebOS could be compared to Ford, or say VW/Seat/Skoda in Europe to keep the analogy.

The pic is of a TP and an iPad 1st gen so you are comparing it to a $400 device? I think it's safe to say that the TP will not be sitting on the shelf next to an iPad 1. In the unlikely event that a TP finds itself next to an iPad 1, there will be a $100 price difference.

Interesting article. I suppose you can compare this to something like when the original Xbox came into the market after the Playstation 2 even though it had no track record in the video game console industry and lack of games (apps in this case). Now, does the TouchPad have a "Halo" up its sleeve to gain instant credibility and fanbase in the tablet industry?

Great analogy! I bought the 360 because I loved Halo and wanted Halo 3 so HP definitely needs their version of Halo. I'm just not sure there is anything that HP can do that can compare to what Halo did for xbox.

Based on what I've seen so far [not much], it seems HP believes their "Halo" is "multitasking". They never miss an opportunity to mention it though it's never made much of a difference.

In the past, webOS didn't have similar hardware, marketing, and carrier support, so "multitasking" didn't get chance to be a difference maker.

Even with the TouchPa vs. iPad 2, the hardware favors iPad 2. We'll see how the marketing goes. We'll also see how the display space looks in Wal-Mart. It's a lot different than hiding the Pre in the corner.

That's a pretty good analogy.

Except you forgot to mention the Wii was $200 cheaper and killed the both of the billion dollar companies.

I wasn't comparing the 360 to the PS3. The Wii was a complete alternative gaming system in comparison to the 360 and the PS3. Nintendo found an entirely different niche in the gaming market instead of trying to be what the 360 and PS3 are.

Derek, I love ya, but I gotta disagree. Any non-iPad tablet is really competing against all of the other non-iPad tablets for second place right now.

iPad has its own endcaps, marketing materials, and retail presence. It is apart...elevated. That's just the way it is right now. The TouchPad will be with other tablets like HP laptops are with other laptops. There, that $500 price tag is going to be an albatross sitting next to an Asus Transformer at $399 or Acer Iconia Tab at $449.

That's part of marketing btw for those excited about a commercial.

Just look at Amazon. For their "BestSellers" in the tablet category, the top 20 is various iPads, followed by various Android tabs.

The $500 Blackberry Playbook doesn't appear until #21. The TouchPad runs an almost identical and nearly-as-unknown OS, but is a wee bit larger.

HP has its own endcaps as well and I am pretty sure it will have more presence in stores than Apple products. Sure Apple has its own section in BestBuy but HP owns half of the BestBuy computer department.

Apple has their own brick and mortar stores, and their own set apart, distinct section of Best Buy. Same goes for Frys. Apple has a huge long spotlighted table all to itself away from computers. HP is almost entirely with other computers and tablets except for an endcap where they have some dummy WebOS phones. Apple also has a distinct section in Wal-Mart's Electronics area.

HP's Touchpad "having more presence" physically will be a pipe dream.

Yea, but you don't see a whole "modern black furniture" section with a huge backlit HP logo drawing peoples attention. lol HP needs a "section"

Though this is true, I'd still like to see some sort of price incentive to 1up the iPad2. Bundling the Pre 3 with the TouchPad looks to be a plausible option and an enticing one indeed. This would come at a higher price but would still save the consumer money. For example, a normally $599 TP and a $199 Pre3 separately would go for $800. It'd be easy and in range to sell the bundle for $700. To a consumer they get an awesome phone and tablet for a hundred more than the competitors' tablets and this way they can enjoy the Touch-to-share feature.

I completely disagree. Macs have always been more expensive than better spec'd PCs. I know that I chose the hugely successful Nook Color over Samsung Galaxy Tab because of the huge price difference (and $250 is a sweet spot for spending), and I would not spend the same money on a tablet that I could spend on a full-fledged ultraportable. The Xoom is a failure because of price, not operating system. The iPad has a built-in advantage, and a lower price by an aggressive upstart would be seen as a leveler of the playing field, not an indictment of quality.

Macs have been more expensive, and a wide swath of people (myself included) say, "I'd buy a Mac if it weren't so expensive." There's a perception there that the price makes it better. Maintaining the high price keeps that going. (I just want it for the ability to reliably triple-boot and use a well-established UEFI platform.)

What I think would be most effective, is match the price but have more pack-ins, like a free touchstone and opportunity for a discounted phone. Then, the tablets would appear equal, in price and capability, but still include improved value.

Nope. More effective to make large cut on Touchpad and still be able to sell accessories for high margin.

Most of the people buying a "cheap" tablet won't buy expensive accessories.

So on the other hand I think that this approach is right. The Touchpad will become a bit cheaper than the iPad2, as HPs prices are not as fixed and unmovable as Apples. But still they will need a "cheaper" Model to catch some market share. I expect that 7"-model to be exactly that and undercutting the iPad for at least $ 100.

I wouldn't expect the 7" model to undercut the 10" model too much. It is rumored to have the same number of pixels, but with the smaller screen gives it a better PPI.

In addition, the perceived extra portability could be a selling point.

I'm probably going to wait until more information about that 7" comes out. I'm hoping that it has HDMI out because that's one key feature I'm looking for in a tablet.

50 or a 100 cheaper does send the wrong message. If you're going to compete on price, you better make the cut more meaningful. 299 or lower would be worthwhile.

Yes, its hard to raise the price afterwards but you just use branding. Touchpad Pro or Envy could be next year at more of a premium and let the first Touchpad remain the entry level product.

Year one is all about sales numbers and getting established, not profit..especially lacking apps & established ecosystem. There's time to position later as well. Getting webOS viable is key.

This is what made HP successful at PC's. Flooding the market with cheap devices but still finding a niche with the Envy.

Currently, 50% of PreCentral users believe that pricing the TP the same as the iPad is a bad idea - "they are going to get killed"

http://forums.precentral.net/hp-touchpad/282860-pricing-same-ipad-2-mist...

I'm willing to bet that a lot of them don't understand pricing psychology. Here's an article about an experiment done with professional wine tasters:

http://www.psychologytoday.com/blog/evolved-primate/201002/does-price-ta...

Researchers were able to get different responses regarding $10 and $90 wines, even though they were the same wine. Further research into it using functional MRI showed that there were actual brain activity differences when the tasters were drinking the two glasses.

It's also often known as the Price-Placebo Effect.

Back in 2009, when asked if the Palm Pre should be priced lower than the iPhone, the response was:

“Why would we do that when we have a significantly better product.” - Ed Colligan - CEO - Palm, Inc.

This was in relation to the "iPhone Killer". I wonder if history will repeat itself with the "iPad Killer".

"P.S. - I'm outta here!" - Ed Colligan

HP lost me when they priced the TouchPad at $600. I'm only buying pads that are $1000 and up, because that must mean they are super bad ****

Nope, they'll just buy the much better ipad at the same price. See how that works?

perhaps my sarcasm was lost upon you

perhaps it was :)

I could not disagree more and am completely underwhelmed by the lack of argument. What you are positing as fact is not likely true of most savvy consumers. I doubt that many people would want to pay the same as an IPad and I doubt even more that anyone would be turned off by a lower price (Kindle is the best example).

Higher prices mean a niche market. I am not interested in that at all. I already feel some lower priced Android tablets are the best value and while I will wait to try a TouchPad for myself a higher price would mean no sale for all intelligent consumers.

Most consumers aren't savvy, and when it comes to shopping aren't intelligent. I am not speaking of general knowledge intelligence, but fully researching a product before purchase.

The majority of people buying Apple devices are buying them off reputation not research (not saying this bodes well for the TP). Just saying the average consumer has not read 5% of what the average tech reader reads about products.

Apple makes really nice stuff that's easy to use and revolutionary. That's why people buy it off reputation, not because they are not intelligent.

Please read, I said I was not speaking general intelligence, but the average consumer doesn't spend the amount of time researching a purchase as someone who (like members of these boards) is into tech does.

True, but so what. Techies love Linux too, it hasn't helped it move beyond a niche OS for the regular consumer and business desktops and laptops.

Vast numbers of non-techies purchases are required for the TouchPad to be a success.

Those non-techies are bombarded with ads about the cool things you can do with an iPad, they received dozens of main stream catalogs from Frontgate and Brookstone filled with accessories for iPads and iPhones. They will see iPad/Phone accessories at Walmart and even their local Walgreens. You can get a Apple 32 pin connector at practically any gas station.

HP does have advantages that HTC and Samsung and Motorola don't. They have the kind of pull with retailers to get dedicated shelf space and signage. But other than the device, what will they have to sell?

If the TouchPad were available today, for the average consumer, it would be a blip on the radar as they walk over to the Apple display.

I am thinking we will see some kind of sale pricing as someone mentioned before. Also as we have seen with the Veer, unlike Apple, it's not going to be a hard price point.

I don't claim to have the right answer, it just has to sell.

I do think an MSRP at iPad price is not the worst idea, especially if we see the sale prices and potential bundles from retailers that we could see.

I don't think that HP needs to undercut the iPad on price.

But they do need to somehow sell value for the price.

They opted not meaningfully superior hardware (I think that not offering an SD slot is stupid), and other than the TouchStone, I don't see what accessory that HP could bundle to make the buyer think that the TP is a better value than the iPad.

"The TouchPad has a dual-core 1.2GHz processor compared to the iPads 1GHz dual-core chip, and they match each other in RAM..."

The iPad2 has 512M RAM, the TouchPad has 1G.

But more importantly, one is webOS, the other iOS. That should be your only concern.

The fact that it has webOS on it means nothing to the average consumer, until it has developed mindshare in the consumers' minds. The specs are what will be immediately comparable.

It means something to the average computer that it is NOT iOS or an iPad.

Seems like the writer is trying to lower expectations for the TP. However, an opinion is just that . . . an opinion. What I'm hearing is that TP can't compete with the iPad but should just be happy it's a player in the same field. As a fanboy for TP & the WebOS, I appreciate the exhilarating rhetoric that, based on limited facts, the TP will be the device that comes from behind to seize the field from the Goliath. And, I thought that PreCentral was the blog for those WebOS fanboys. I can read CNet or CNN if I want those "objective" perspectives.

What a bunch of BS. Everybody knows Apple sells with a very high premium and the Ipad has the same screen and also 16 GB storage and 512MB RAM and also a dual core CPU. It has more metal and is thinner and sturdier. And it has way more Apps.

So selling at the same price as Apple is suicide. HP stands for good value and not for high price. HP has no traction. They have to sell at 299. Otherwise they will never get bulky plastic pad to consumers and developers will never make a lot of appz.

I think that the notion is a little flawed, especially if you consider the average consumer.

The average consumer is less likely going to be on the market for a tablet. They want an iPad. They don't want something that's "like" an iPad, they want that same cool device that John and Sue across the street have that lets them look at the "internets" and play that Bird Game thingy.

If Joe and Jane average hit the store and see the iPad next to a TouchPad, what are they going to think? "Well lookee here, there's that iPad that they have. Dunno what that there TouchPad is though. It ain't no cheaper, donchaknow. Let's get the iPad, those kids sure love theirs!"

Now if they went to the store and saw that the TouchPad was cheaper, let's say $50 cheaper, then they might pause for a moment. In all likelihood they'll still snag the iPad, but the might be more inclined to look into the TouchPad a bit more.

HP needs to do *something* to grab the attention of the causal consumer. The iPad is so incredibly dominant in this area, that without a hook that the public at large cares about, it will be a purely niche product. Whether it is a better product or not is completely irrelevant. Public perception has the iPad as the pinnacle of the tablet world, with everything else more or less an imposter.

By gosh, i think you're on to something there..

Maybe have some sort of angle so that it is not like you are copying others?

The $399 Asus Transformer has a keyboard option that turns it into a full netbook. No one else does that. The Transformer also has a list of key features that the iPad 2 is missing like microSD, SD, USB memory, 1080p HD recording, etc.

The TouchPad will not be sitting next to the iPad in the Apple section at Best Buy. The TouchPad will be in an aisle with the other tablets arranged by price:
$399 Transformer
$449 Acer Iconia
$449 Toshiba
$449 Samsung Tab 8.9
$499 Samsung Tab 10.1
$599 Xoom
$599 TouchPad

Well, the differentiating factor is that it is a WebOS tablet smack dab in a sea of Android tablets. The problem with that is, to the public at large the reaction is going to be "huh"?

Until HP gives people a reason to legitimately want a TouchPad, it is set to be nothing more than a niche product at that price point.

For the general public, all of those neat features are utterly meaningless. MicroSD, 1080p, USB... These are things that attract tech geeks, not Joe Average. Joe Average is far more likely to be excited about apps, lots and lots of apps.

Apple owns the tablet market to an utterly dominating level. The iPad is practically synonymous with Tablet. Catering to the geek crowd isn't going to gain anyone mainstream traction. Something else needs to be done.

The Apples are off in their own little world so we are in an aisle of tablets at Fry's or Best Buy arranged by price.

The salesman is taught to start the person on the cheapest one and "upsell" to the next one.

"The Asus, Acer, and Toshiba are great tablets. HD out, HD displays, HD Record. 200,000 apps. You can double the memory for $25 any time."

"For a bit more you can get the Samsung that is the worlds thinnest and lightest tablet. Again HD out, HD display, HD record, and add memory any time."

But what does the rep say to step them up to the TouchPad?

"The TouchPad is another $100 more but has a great operating system called webOS."

How does the rep keep them from seeing the placard that shows the TouchPad is lower def, no HD out, no HD record, and can't add memory?

My fear is that in a lot of cases, the rep is just reading the placards along with the customer.

I just cannot agree. People are looking for a quality product at a fair price. I am not going into the store saying that I am going to turn my nose up at a Touchpad because it is $100 less expensive than the iPad. I'd look at features, workmanship and then if the two items are comparable I am getting the less expensive one every time.

I don't think that a higher price is a selling point in consumer electronics. Ever.

I could not agree more. It will need to beat the price to have any impact. I would rather buy two touchpads than one IPad.

For some reason it seem as if people are trying to convince themselves why they need to pay the same for a touchpad as they do an ipad2.

"I am going to pay just as much and here's why....."

In the end it makes no sense to pay the same price. Side by side I'll take an ipad 2 over touchpad at the same price. People make apps for ipad, and lots of them. WatchEspn, Timewarner tv on ipad, there are so many to list. Touchpad has none of these and that is the real killer. People want Apps. Sorry fan boys.

Maybe if Richard Kerris stepped up and started locking down deals and ANNOUNCING them I could get excited, but he is too busy taking pictures of his drumset with a phone that has no announced release date or carrier info (pre3) and twettering them, to actually do his job.

I'll tell you what, if they charged $100 dollars for a touchpad they would sell a he** of a lot and people would be really happy and the market share would explode. I know you can't charge that price, but Derek's argument is weak, $599 is a losing price.

See? Even the troll gets it..

lol

I would love to fight you. It would make me very happy.

I would pay $599 to see that!

Everyone is looking for bargains right now and if HP can deliver a lower cost product to consumers at this point with faltering economies worldwide, they should. Let the masses rally around the clearly better choice at a lower price point. It encourages early adoption which is what HP really needs above all else. I think the message that HP has sent us all is that the enterprise market is primary and the consumer market is secondary (maybe even a distant second). I think their current pricing is ridiculous. I'm going to be out $1200 before I'm done buying an unlocked Pre³, TP & accessories which I think is reprehensible considering that our App development is nowhere near where it should be. HP shouldn't kid themselves - people want the perceptaion of an iOS experience in apps on their Tablet more than tech-savvy elegance in multitasking, notifications and Synergy. My wife could care less about all of those things despite using a webOS phone for over a year. I doubt she's run more than two apps at a time, too. In all honesty, it took me at least 6 months of using webOS to break the habit of closing the phone, messaging and email apps when I was finished using them. HP cannot rely on technical innovation alone to win this - they must use every advantage and by that I mean their liquidity. If they can afford to sell these devices at a loss like SOny & M$ did with their game systems, they had better!

I wish TP was lighter than IP-2, and had bigger battery than IP-2. Right now IP-2 gives 10.5 hours of battery life, wish TP reach atleast 8 hours.

I didn't know TouchPad had an announced battery life yet. My pre lasts longer than my iphone 3gs and it has more push mail accounts on it. I don't see why the TouchPad would be any different unless the battery is actually smaller size.

3gs came out after pre.

And that 10+ hours of video playback! I charged my iPad 2 ONCE over the memorial day weekend which included lots of web surfing, netflix streaming over 3G and my daughter hammering away on games during much of our time on the road.

Apple products have fixed price so even if HP sells the TouchPad for the same price they can still do sales on different occasions which will make it cheaper than iPad without actually being cheaper.

Plus HP already knows the money is in enterprise which is why they are planning on putting WebOS on all of their mobile devices. They want to push into the enterprise environment and take that market away from RIM something Palm tried very hard but just wasn't big enough to compete with RIM.

I think you should check the consumer sales figures for Dell, Asus, Acer, etc. HP sells most of its high priced pc's to business. There is a reason why expensive Macs have only 10% of the market.

In one sentence you say that the average consumer is smarter and more savvy than the salesman and marketing guy, then in the next you say that the very same consumer is too dumb to judge two tablets on their merits and ignore pricing differences. The average consumer knows Apple products are more expensive than non-Apple products. It's just a given. They pay more for perceived quality of the Apple name. HP does not have the same Apple reputation and therefore cannot say "our products cost the same, so they must be the same quality."

Consumers are going to say, "I can get the iPad, which is the best tablet on the market according to my friends, or I can pay the same and get this weird thing from a company not known for quality." Why do you think the Xoom sales have been so "stellar?"

It probably doesn't matter anyways. The price will fall pretty quickly as they'll have no choice if they want to move them.

What? You are suggesting people consider that the "brand" could carry value in the minds of the consumer rather than just chalking it up to being dumb...uhm..."fanpeople"?

Nah...a sensible argument like that wouldn't be found here...not on this site.

/sarcasm

Well HP....You've owned that little **** named Palm for about a year now. this is where "the rubber meets the road". Good luck, you're gonna need it.

Let the propaganda begin.

Introducing America's largest resource. Manufacturing total BS out of thin air.
AKA Marketing.

Reality I just bought a great product for LESS.

But hey I'm stupid. If I were really smart I'd pay more.

For those of us in the tech world who buy and pay $800 for a Gucci coin purse the above article will most certainly apply.

I agree with the gist of the article. Price the TouchPad the same as the iPad2 and build more value into the purchase with the addition of FREE accessory items. What would convince you it was a better value? A Touchstone2, a cover, a free killer app or two and the value proposition tilts in favor of the TouchPad without using a lower pricepoint. Later, after a successful launch, they can remove the free accessories.

Like the free hotspot that came with the Verizon Pre Plus?

Or the HP $50 gift cards they gave away with the old stock they bought from Palm?

It's an okay incentive, but not enough to sway someone away from iPad 2 at the same price.

Look at it this way: If you buy iPad 2 at the same price, you get 80,000 free and low-priced apps you can't get on that plastic tablet you never heard of.

Don't think a Touchstone or cover can beat that.

Bestbuy and the like can't make any money on free accessories... They won't push it if they can't make anything off it...

I don't care what the MSRP is, **** make it $900 if you want. If they want a WOW! they need to make my out of pocket on the thing south of $400. Whatever it takes, maybe they can have a "We want YOU!" sale for version 1 of this thing. The only way they are gonna get apps is to get market share, the only way to get market share is to get these in the hands of people quickly. First they have to make enough so I can buy 2 of them. I can't buy two of these things if they come in over $400...

Let the Propaganda begin. Kool Aid anyone?

Introducing America's #1 resource. Manufacturing total BS out of thin air.

AKA Marketing/Politics

Reality: I just bought a great product for LESS!

But Hey I'm Stupid. If I were really smart I would have paid more!

For those in the tech world who pay $800 for a Gucci coin purse/wallet this article applies.

disagree with the premise.

I don't think most people will consider the two "equally-matched" because they look at software much more then specs. Personally, You'd have to have it at least $100 less.

I know that's not popular but on this site. But i think thinking you can sell any tablet at the same price as an Ipad 2 and be successeful is merely wishful thinking. Merely hoping that saying it will make it true.

I'm not saying it's a bad tablet or people are wront to like it or buy it. But i don't think most consumers will see them as equal and thus will not be willing to pay the same price. And the average consumer is the key. Not the tech blogger or tech blog reader. Still value Derek's opinion.

I think the price would be OK if when you first touch it, you get a message about a $100 coupon available on the HP website, which you can quickly access and immediately print to the nearest HP printer, conveniently discovered to be right behind you.

That must be how the Asus Transformer sold out its stock. Oh, wait, they undercut Apple's price.

I agree with premise of not under-cutting in price. However, it fails when you set things up as you, Derek, did.

The consumer sees two tablets next to each other. One is thinner and made of metal. The other is thicker and made of plastic. The initial impression is already placed the thicker plastic one should be cheaper.

Then customer looks at the name and says, "I've seen all the marketing over the last year for what an iPad can do. I don't know what this HP TouchPad can do."

HP needs to bridge that gap somehow. They can do some of it with marketing, but they are so far behind the iPad in that department that it would take a year or two of full advertising blitz to catch up.

How do you close the gap now? Not by cutting price, but by bundling in a Touchstone, keyboard, or case. Consumers like to get more for their money and such a bundle would be clearly perceived as getting "a deal" rather than trigger a thought of, "This one must not be as good."

Completly agree!

Bundle HP, people love getting DEALS and more BANG for your BUCK!

Re "I've seen all the marketing over the last year for what an iPad can do. I don't know what this HP TouchPad can do"... That looks to be a big part of why HP is sending out reps for in-store demos. 1) People can get prompt answers from someone familiar with the product (vs the store staff who have to keep up on everything there) and 2) if a crowd builds, people will get curious.

As I said before, no other company has done tablet in-store demos with live reps. Yes, for the iPad, you can get that at an Apple store. For a Samsung/Motorola/other Android product, though, Joe Sixpack just ends up asking the store staff.

I'm just hoping that it's more than Best Buy--that Staples (who's hyping tablets overall in their marketing) and other stores get in-store demos too.

Hopefully they will split the difference by pricing similarly but then providing discounts - sale pricing, bundles, etc. You can give people the idea the price is the same without actually making it true. So you get the people who are looking for the sense of "best" and also the ones who are looking for savings.

Agreed. Starting at the same base price and then offering a sale price is one good strategy--if that's clearly communicated. (There can be too much of a "cut to the chase--just show the final price" mentality sometimes.) People are used to seeing HP products (PCs, printers, et al) on sale--especially when multiple vendors compete against each other--so if they see that for the TouchPad, that may work.

Someone said above that HP is competing against "all the other tablets" for the #2 spot. While that's somewhat true, 1) none of the Android tablets have really done anything to stand out from that crowd and 2) the PlayBook is still only half-baked. So (IMO) no one's really claimed the "top iPad alternative" spot. With their in-store demos and possibly a good sale/bundle option, HP still has a good shot at that.

ummm if there are so many people that think that the iPad2 is better than the touchpad, then why did they register for precentral? in my world the touchpad would be free, and until it becomes that price I will be disappointed. But instead of complaining, I am looking forward to finally getting a newer webos device than my pre minus. So I will be at walmart when the touchpad comes out.

Um, maybe because they already own a Pre or Pre+?

I had a Sprint Pre for almost 2 years until I gave up waiting for Palm/HP to release a new device and upgraded to an EVO.

But that doesn't mean I don't still love webOS.

And just because I think an iPad2 will provide a better overall ownership experience doesn't mean that I not rooting for the TP to find an audience. I would love to own one, but HP needs to show that they can promote the creation of a supporting infrastructure (apps and accessories). A superior OS isn't even close to enough.

No one pays full price for a copy.

As all other tablets have failed the point should be clear: it has nothing to do with the hardware specs, and not even the OS per se (as great as WebOS is).

It is all about the ecosystem, which so far WebOS has practically none. At this moment HP has a bunch of good intentions for the future, but so far close to zero appeal but for a nice OS with very few apps, and not considered even a contender in the iOS and Android battle.

So, if you want customers to choose the HP Touchpad instead of iPad or a Honeycomb tablet with a much more robust appeal, you have to bring something more to the equation.

As good as the Touchpad is, if launched at iPad parity it will be Dead On Arrival. Would indicate we have learnt nothing for the other late arrivals to this party. The OS alone is not enough, and consumers do not care about the hardware specs (Zoom anyone ?).

I believe this editorial is too influenced by wishful thinking and should be taken with a grain of salt or two. Better add a little dose of reality.

Boy howdy - I had not idea that so many readers of precenteral were so knowledgeable and educated in the psychology of consumer purchasing habits - - - lol.

I am just gonna keep my fingers crossed that what ever path HP is taking will be successful as we will all win.

Happy Hump Day !

I think HP's strategy is more about putting the TouchPad in the hands of businesses plus the public at large. Nothing greases a sales report like a volume sale to a large firm. I can't see too many companies doing that with the myriad Android tablets. The Citrix apps will surely help a company's buyer make up his/her mind about which tablet to buy.

In the hands of businesses to do what? Replace their blackberries and laptops?

I don't buy it. I see many fantastic uses for a tablet. But laptop replacement isn't one of them. And my EVO is borderline too large as it is, I wouldn't want to be sitting in a business lunch or meeting trying to discretely check my TP to see my messages.

I'm not saying that there won't be some compelling reasons for some professions to adopt the TP or iP or whatever. But I don't believe that the demand will be enough to justify development costs. For the TP to really succeed it must sell well to consumers.

Of course the people of precentral want the price to be 100$ less, they know what it is and want it as cheap as possible. We all know it's better so price is all we care about. I don't care if they didn't post a single advertisement, or if they marked the price 100 over apples, I love WebOS and I will buy the tablet. People on this site love the OS and are voting that the price is too high because they know that they will be shelling out the cash when the time comes. Apple keeps everything under lock and key... the freedom of WebOS is what sets it apart the most.

I don't think that any tablet that's coming out this year is going to knock the ipad 2 off, but now consumers are going to have a lot of different choices. The same thing happened with the iphone. For the 1st year no one could even come close, but now with so many different handsets (mostly andriod)the consumer has lots of choices. The Touchpad is not meant to knock the ipad2 of the market, it just want to stablish the name HP WebOS and yet another choice for consumers. Next year when all the android, WebOS, Win7 tablets come with their 2nd or 3rd models, they will be taking a bigger piece of the tablet market share because now consumers will have so many choices unlike just an ipad like in 2010. If HP licenses WebOS to other handset makers, than it would make all these new phones comparable with the Touchpad which it would be an advantage on the other tablets.

Look in the end all people really care about is the APPS!!!! People already know the ipad has the most apps so when they look at a touch pad and look at an ipad they are going to think; which one has the most apps? hp/palm is already well known for not having apps. even the sales people are going to say, well the ipad has the most apps.

and if it's the same price, what's the point of buying something with an uncertain future as opposed to THE product to have. At the same price point, you are driving people to the iPad.

I see your point but what about a rebate? Say $50 for the first 100,000 units? But I guess this would be up to the individual distributors...

Ok, lets push aside the obvious Xoom vs. Transformer example that proves this thinking doesn't hold water in this market.

Now, you're telling me that HP is pricing the Touchpad this way so that people see WebOS as a brand with value. The same HP that led WebOS's relaunch with a phone that was free on contract the day it was released?

Yea....

Frankly, while in Staples the other day, i walked up to a table with 5 tablets mounted on display posts. All the units there were powered up and internet connected via wifi. Several people were moving from one unit to the other, I watched as people purchased the 399 unit. The ipad, the win7, the playbook, etc etc were all left there. I spoke to a sales rep I know and the manager, they both told me, while there is brand recognition, price is the deciding factor. the 399 unit was selling out across Ontario. Yes, going head to head with Ipad is fine, with economic uncertainty around the world, people are getting tablets based on price. Most view them as a toy of sorts, or a laptop replacement, "Its all I really need" comments were the refrain. I am not saying the touchpad should be hundreds less, the perception of the consumer would be, well, I know about Ipads, I dont know about Touch Pads, so for the same money I am going to get the same tablet as my buddy Joe. Drop the price by 50 bucks, it could make one **** of a difference.

Great post - I agree with the points made.

The high end Android tablets (Xoom etc) aren't held in high regard for the very fact that there are so many cheap Froyo and Gingerbread tablets ruining the perception of Android as a quality tablet OS (granted, they also didn't do themselves any favours releasing the Xoom with an early buggy and under optimised Honeycomb build).

The best thing HP could do is to *make sure* the Touchpad is sitting right beside the iPad. Assuming they match price and spec then one of the biggest differentiators will be the OS - and we all know webOS leaves IOS in the dust.

Get them together and let the buyers play with the card view and notifications etc and they'll see for themselves how much more usable a webOS tablet is.

Even better, if they can get the Touchstone and a Veer with Touch-to-share enabled in there too - totally compelling.

The only problem is going to be the App Catalog - but hopefully HP will have all the headline apps lined up plus a few good games. Once the momentum kicks in the App Catalog will gather pace too.

Looking forward to buying my Touchpad!

I know this comment is late to the game but thought I would come back here and share my thoughts. At first read I agreed with this article... now not so much. After spending some time with the Touchpad and after reading almost every review out there, I have to say this:

The market may "think" a certain way and certainly this needs to be considered when rolling out a new product. However, at the end of the day it all boils down to value. The bottom line is, the Touchpad is nice, but it just is too early in its life cycle and thus not offering enough value to be priced equally with the ipad or other tablets around the same price. I am a webOS fanboy who owns an iPhone 4. Why? Value. If I was rich I would have a touchpad and an Ipad... but like most of us, it will one or the other.

This current touch pad should start at $300 -350. Even if HP loses money on it... That is what it is worth. HP can come out with a premium HD version in a few month for more but as of now, the value isn't there. People are only willing to accept a less if they are paying a little less.

Putting the Touchpad out only 3/4 baked (no real document editing at launch???? REALLY HP??), combined with a small ecosystem of developers/apps, and asking as much as an iPad.... is wrong wrong wrong. If it won't even win over a webOS fanboy like me, how is it going to win over anyone else?

Value. Unfortunately for all tablet makers out there, the bar for value has already been set. If they can't match it then they better price appropriately.