Friday, August 5, 2011

HP Touchpad Down To $399 - Could Tablets Be NetBook 2.0? Amazon's Tablets To Add More Pricing Pressure In Race To The Bottom

I wonder if the tablets outside of Apple will be another race to the bottom with Apple occupying the $500 and above market while the rest of the pack enters the race to the bottom. The Touchpad has been out barely a month and HP has already dropped the 16 GB model by $100.

What does this mean? Has HP's Touchpad already failed to catch on? What does this mean for the tablet market in general?

Early in the year, I speculated we fellow mobile warriors will be able to find a very decent Android tablet running Honeycom by Black Friday. This was around the time when Xoom with the Wi-Fi version was released by Motorla, priced to compete with the 16 GB iPad 2 at around $500. It turns out that there are already sub-$500 tablets now. They have the same specs as the Xoom but, take the Acer Iconia, I wouldn't call it top notch.

Then there is the Asus Transformer. That could be what I'm looking for at around $400 today. So, this probably means that by BF, tablet prices may go even now.

This reminds me of the netbook market. When the Asus EEE PC debut, it was priced similar as today's 10" tablets. But the price erosion quickly took place as HP, Dell, Lenovo, and Acer all jumped into the market. For the most part, today's existing netbooks can be bought for less than $200.

However, at the speed which the mobile market (phones and tablets) is moving, I think the time frame in which the price drops will take place has been compressed.

There are things that tablet makers could do to differentiate themselves from other services. There is the Android approach that lets the user customize their tablet needs. Right now, that is the case until companies like Samsung come out with their own skin. But then, users on Android will probably find a way to get around it.

HP with WebOS is going about the Apple's more curated route. That could work except users have an option for that already: Apple. HP has its work cut out for it. The recent demotion of Jon Rubinstein showed just how things have not worked out the way HP envisioned it.

I don't have an Android tablet though I long sought to buy one. However, I was waiting to see if the Touchpad will hit the $400 sweet spot. And it already has.

And given how tablet prices have dropped outside of the iPad, I wonder if my goal to get an inexpensive full-featured tablet was not low enough. $350 is what I am looking for around Black Friday.

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