HP TouchPad Fire Sale Is a Recipe for Tablet Success

From PC World: HP pulled the plug so quickly on the TouchPad that it seems obvious that HP management was just looking for an excuse to bail on it. Even though HP couldn't manage to generate sales for the TouchPad before killing it, the extreme demand for the TouchPad at the $99 fire sale price is a winning strategy for other tablets to use without throwing in the towel.

On paper, the HP TouchPad has hardware specs and software features that make it a better tablet than the iPad in some respects. For that matter, so do many of the tablet rivals available. Of course, as HP--and virtually every other tablet vendor--discovered, beating the iPad in hardware specs and matching it in price is not sufficient to drive sales.

There are some who claim that the rabid demand for the TouchPad at $99 illustrates that $99 is the magic price that tablets need to reach to create demand. I disagree. I think the phenomenal sales of the Apple iPad and iPad 2 might also suggest that you don't have to give the tablet away to make it attractive in the market.

The iPad 2 starts at $500 and Apple can barely keep up with demand. Rival tablets like the Motorola Xoom, BlackBerry PlayBook, and the HP TouchPad (R.I.P.) are (or were) also priced at $500 and have anemic sales at best by comparison. So, should tablet rivals cut the price?

No. Not necessarily. The Motorola Xoom is $500 for the 32GB Wi-Fi model, which already makes it effectively $100 cheaper than its iPad 2 equivalent. HP cut the price of the TouchPad to $400--$100 lower than the equivalent iPad 2--and still couldn't create demand. Even when the TouchPad was temporarily $300 due to special weekend discounts few seemed interested.

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