I was lamenting the lack of an iPad competitor (if only to spur Apple on) when I got into an friendly argument with a co-worker about whether or not the popularity of the $99 HP Touchpad proved there was a way to compete with the iPad. I was on the side that said the $99 Touchpad proved nothing except people like a deal. He said it proved people wanted an alternative to the iPad.
First, the HP Touchpad is not a $99 tablet. It’s $318 worth of parts (per iSuppli) that was being sold for $99. It sold for three reasons – people love a deal (or perceived deal), it was a challenge to get one (therefore a victory when obtained) and geeks love hardware to play with. While I had no interest in the Touchpad, I’ve certainly bought things for the curiosity factor.
A $99 tablet is not iPad competition. There are already $99 tablets, and they’re crap. They are not iPad replacements.
The main argument I heard was HP (or someone) should sell the tablet for $99 and make up the difference in products and services, For example, selling apps. I don’t see anyone doing this. At Apple’s 30% commission HP would have to sell $730 worth of apps (or anything they can get a commission on) just to recoup the hardware costs. This doesn’t include the costs of setting up the app store not to mention the overhead and development. A company like Amazon or Microsoft might be willing to feel a device at cost or at a slight loss while they build a critical mass and ecosystem. But Microsoft doesn’t seem to want to build the tablet themselves, Cut hardware costs and we’re back to $99 tablets are crap.
While not a $99 tablet, my best hope is for the Amazon tablet. I admit that I was assimilated by Amazon long ago, having Amazon prime and easily doing more shopping with them than anyone else. I was already in Amazon Prime when they added movies and I’ve been enjoying the movies and TV. Add to that my growing collection of Kindle and Audible books and I may be a Amazon Tablet owner when it’s released. Although I suspect I would be one of the few iPad owners also buying a Amazon tablet. I’d get it for one of the reasons I mentioned that people bought the $99 Touchpad – hardware to play with. I’ve no doubt Amazon would design their tablet around selling their other products, but I would expect that even they would price the hardware to at least break even.
I would agree with those that say there isn’t a tablet market, only an iPad market. Even the Amazon tablet won’t be an “iPad killer”. The iPad will continue to do just fine. Hopefully it will be enough of a threat to spur Apple to speed up their enhancement,