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  1.    #1  
    According to iSuppli, Apple pays $30 more for every 16 GB added to their iPad. Now, Apple might get better prices than HP, but no way it's that much better.

    Cost to Apple
    ---------------------
    16 GB iPad: $259
    32 GB iPad: $289
    64 GB iPad: $348

    Apple iPad Components Cost At Least $259 - BusinessWeek

    Given that, the $100 extra for the 32 GB is a HUGE markup. And it's also a huge missed opportunity for HP to compete on price.
  2. #2  
    I would imagine HP would get better pricing since they're larger. They're not trying to compete on price, obviously. Believe the article on the front page of this site about perceived value explained it rather well.
  3.    #3  
    Quote Originally Posted by QuadForce View Post
    I would imagine HP would get better pricing since they're larger. They're not trying to compete on price, obviously. Believe the article on the front page of this site about perceived value explained it rather well.
    Big mistake. That type of markup is not only ridiculous but to try to compete with Apple's iPad 2 without a lower price despite having a LOT fewer apps, no extra hardware functionality, a slower OS, a heavier and thicker device is a big mistake. Look at the Asus Transformer. That thing's flying off the shelves. Why? Because it's significantly cheaper.
  4. #4  
    its industry standard rip off (android tab is slightly better since they have microsd slots). 32GB has better profit margin, thats also why HP likely will only ship 32GB to retail stores.

    And they made sure there is no SD slot for buyers.
  5. #5  
    Blame Apple.

    If HP priced it less (which they could do), Joe Six Pack will automatically assume there is something wrong with it and the iPad must be better.
  6. #6  
    Quote Originally Posted by Beanis View Post
    Blame Apple.

    If HP priced it less (which they could do), Joe Six Pack will automatically assume there is something wrong with it and the iPad must be better.
    thats chicken and egg.

    Jose Six Pack already think iPad must be better. already.
  7. #7  
    time will tell. I think whether ppl like it or not the Touchpad will be a success.. HP is betting big on it.
  8.    #8  
    Quote Originally Posted by Beanis View Post
    Blame Apple.

    If HP priced it less (which they could do), Joe Six Pack will automatically assume there is something wrong with it and the iPad must be better.
    Right, that's why the Asus Transformer's not selling and the Motorola Xoom is flying off the shelves. Oh, wait, it's the opposite.
  9. samab's Avatar
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    #9  
    Quote Originally Posted by 6tr6tr View Post
    Right, that's why the Asus Transformer's not selling and the Motorola Xoom is flying off the shelves. Oh, wait, it's the opposite.
    Who said the Transformer is selling? It's a pretty limited distribution channel so far. That's like saying that there is a waiting list to buy a Ferrari, doesn't mean much if the Ferraris are sold out.
  10. #10  
    Quote Originally Posted by samab View Post
    Who said the Transformer is selling? It's a pretty limited distribution channel so far. That's like saying that there is a waiting list to buy a Ferrari, doesn't mean much if the Ferraris are sold out.
    they gonna ship 400,000 this month
    Asustek boosts Transformer shipments - Taipei Times

    Motorola shipped 250,000 XOOM for three months. oh yeah, XOOM is also available at bestbuy, frys, microcenter, bestbuy...
  11. #11  
    Quote Originally Posted by 6tr6tr View Post
    Right, that's why the Asus Transformer's not selling and the Motorola Xoom is flying off the shelves. Oh, wait, it's the opposite.
    I think this only proves that HP is a bit more concerned with how WebOS and the Touchpad are perceived, initially, than how many they sell.
  12. #12  
    Quote Originally Posted by clevin View Post
    thats chicken and egg.

    Jose Six Pack already think iPad must be better. already.
    Actually that is marketing 101. You price competitively within your market. HP is competing with the iPad and Playbook in a variety of markets and not with the current crop of put together to sell Android tablets from Coby or Huawei.
  13. #13  
    Quote Originally Posted by Beanis View Post
    I think this only proves that HP is a bit more concerned with how WebOS and the Touchpad are perceived, initially, than how many they sell.
    If only perception can turn into sales.

    not to mention, if the sales lagging for a quarter, they gonna have to lower the price, whatever high quality perception with high price launch, will turn into lame with fast drop.

    Obviously its now too late to lower the launch price. Just go ahead make more effective ads.
  14. #14  
    Quote Originally Posted by Superjudge View Post
    Actually that is marketing 101. You price competitively within your market. HP is competing with the iPad and Playbook in a variety of markets and not with the current crop of put together to sell Android tablets from Coby or Huawei.
    What market? tablet market? or apple brand loyalty market? The former? lower the price. EEE pad only has higher quality than touchpad, and at lower price, and with good sales. The latter? there is no chance in hell any none-apple products gonna win.

    another people trying to talk about market 101. I will let the market taught you the lesson of "entering a new market, gaining market with low price" in three months. lol
  15. #15  
    Guys I am surprised that you think that 3x a cost factor is too much markup. I'm not clear what the markup is these days but a long long time ago in a galaxy far away in marketing that was pretty normal. The cost of business was driven by taxes, operational expenses, etc more than just by component costs.

    3x at the retail chain would be crazy but from the manufacturer - not so insane.

    Here's a reference for you:
    Manufacturing Cost Estimates and Product Development Strategy
  16. #16  
    Quote Originally Posted by Unclevanya View Post
    Guys I am surprised that you think that 3x a cost factor is too much markup. I'm not clear what the markup is these days but a long long time ago in a galaxy far away in marketing that was pretty normal. The cost of business was driven by taxes, operational expenses, etc more than just by component costs.

    3x at the retail chain would be crazy but from the manufacturer - not so insane.

    Here's a reference for you:
    Manufacturing Cost Estimates and Product Development Strategy
    its all well and true. Its from a business prospective.

    What HP urgently need, is put their feet in a buyer's shoes. When they walk into a retail store, what would they think? An tablet with not so great hardware components and an unknown, albeit nice looking OS, and an very high price. Right next to an world famous iPad and another nice looking, google powered tab for $399?

    Its a different time now.
  17. #17  
    It's not directly cost. It's user experience and marketing, too. Apple marks their product up $100 per level of storage as well. I'm actually surprised 16GB costs them $30. I would have assumed much less than that, even.

    Anyway, why would HP get into a price cutting war with Apple? HP is desperate for profits right now. If they can make a profit on selling 32GB instead of 16GB, they'll gladly do it.

    Apple has shown people are okay paying $100 for 16GB.
  18. #18  
    Quote Originally Posted by clevin View Post
    its all well and true. Its from a business prospective.

    What HP urgently need, is put their feet in a buyer's shoes. When they walk into a retail store, what would they think? An tablet with not so great hardware components and an unknown, albeit nice looking OS, and an very high price. Right next to an world famous iPad and another nice looking, google powered tab for $399?

    Its a different time now.
    I've seen the way HP seems to often sell their systems. They retail price their systems at the level they want that system to compete with then run discounts and/or accessory bundles to value add. The idea is to make it look like to the consumer that they are getting a better value.
  19. #19  
    Quote Originally Posted by 6tr6tr View Post
    Given that, the $100 extra for the 32 GB is a HUGE markup. And it's also a huge missed opportunity for HP to compete on price.
    You should read a book called "The Undercover Economist" by Tim Harford. This is a form of price discrimination. The basic idea is that, by building things slightly more expensive, but at a much larger markup, buyers reveal their sensitivity to price. Something that producers really want to know. Starbucks does the same thing for coffee.

    A decent summary is available here: Price discrimination - Wikipedia, the free encyclopedia But sadly it's not nearly as well written as that chapter in Harford's book.
    Last edited by mu7efcer; 06/09/2011 at 12:12 PM.
    Twitter: dullgeek
  20. samab's Avatar
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    #20  
    Quote Originally Posted by clevin View Post
    they gonna ship 400,000 this month
    Asustek boosts Transformer shipments - Taipei Times

    Motorola shipped 250,000 XOOM for three months. oh yeah, XOOM is also available at bestbuy, frys, microcenter, bestbuy...
    The accuracy of news from Taiwan is highly suspect --- and I am a Chinese Canadian and can read the original Chinese news reports.
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