Sunday, September 18, 2011

Free or $99 Tablets?

Here's an excerpt from an interesting article in ComputerWorld.  Companies may try and experiment with pricing and subsidies (based on consumers purchasing content or services) -- to try and grab business from the Apple iPad -- which cannot be beaten at the $499 price point:

How low can they go?

When price competition hits a market, it usually happens gradually. But in the touch tablet market, the bottom seems to have suddenly dropped out.
HP shocked everyone when it announced last month that it would get out of the tablet business and stop making all webOS hardware. To move excess inventory, it announced a stunning $400 reduction in TouchPad prices.
Apparently $99 is a popular price point. The tablets were completely sold out in a matter of days.
Of course, that's not a sustainable price for HP. Pundits estimate that it costs HP about $300 to make each TouchPad, so the company is probably losing about $200 on every tablet sold.
That's why HP confused everybody when it announced that it would manufacture more TouchPads through Oct. 31 in order to respond to the "stunning" uptick in demand.

Read more here: