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  1. pdch's Avatar
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       #1  
    HP -

    1. You were just given the blueprint for the business model of the future. Continue selling the Touchpad-1 at these ridiculous prices and build a solid user base.

    2. Rework your financial plan so that you do not plan on making money on the hardware sales, but instead, add a small margin to all PAID for app sales. If the App is being sold for 1.99, and .25 for HP. DO NOT PLACE ADs ON FREE APPS ala android, people hate that.

    3. Announce that you have listened to the public and will continue to develop CUTTING EDGE WebOS devices. The next stage of devices, sell AT COST or under while continuing to recap the difference through App catalog margin. Since the next version will have better specs, the SLIGHT bump in price will be palatable.

    4. Fire Leo A55Thumper and back out of your $10 billion deal to make HP become SAP squared.

    5. You will quickly become the #1 mobile platform and will force other companies to either follow your model or die a death of a thousand cuts.

    HP was just handed the golden keys, an accidental blueprint on how to unseat Apple. Most people want devices, but are not fanatics that will buy at ridiculous prices.

    FYI, the video game console makers have ALWAY lost money on hardware to recoup through software, it works...try it HP.
  2. #2  
    HP already takes a 30% cut on app sales.
  3. #3  
    Let SAP2 take the hit financially for this and have HP's PC and webOS spinoff to create a future for HP's consumer hardware.
    Did you know I can also annoy you on twitter? @mikevember
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  4. pdch's Avatar
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       #4  
    so do 30% plus a small margin to make up the difference. That way, they make more of a profit to develop better hardware.
  5. #5  
    Quote Originally Posted by pdch View Post
    so do 30% plus a small margin to make up the difference. That way, they make more of a profit to develop better hardware.
    So give the developer less than what they could make on other platforms?
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       #6  
    Quote Originally Posted by barkerja View Post
    So give the developer less than what they could make on other platforms?
    Absolutely not, that is why I am not suggesting a bigger "cut" but add an app surcharge. Sure the app would be MARGINALLY more expensive (so jumping from $1.99 to $2.24 in the example), but the developer will make the same amount and HP will chip away at the hardware loss and potentially (with a big enough user base) make a profit versus the loss on devices.

    People will be willing to pay slightly more for an app on webos than say IOS if they are paying less than half the price for the device to begin with.
  7. #7  
    HP already knows about selling hardware at a loss and recouping later. The inkjet printer business is such. This was also Nintendo's business model - sell NES units for a loss but get the critical mass you need, and then make a killing off of games and licenses later.
  8. #8  
    Quote Originally Posted by pdch View Post
    Absolutely not, that is why I am not suggesting a bigger "cut" but add an app surcharge. Sure the app would be MARGINALLY more expensive (so jumping from $1.99 to $2.24 in the example), but the developer will make the same amount and HP will chip away at the hardware loss and potentially (with a big enough user base) make a profit versus the loss on devices.

    People will be willing to pay slightly more for an app on webos than say IOS if they are paying less than half the price for the device to begin with.
    Ah, okay I see what you mean now. I took it as the other way. The only hurdle (and it's a big hurdle with such a small user base) is volume of sales. There needs to be a very large volume of app sales in order for HP to recoup their loss from hardware.

    The other hurdle, is actually having a large app store. And by large, I mean hundreds of thousands of apps, apps that apply to every type of consumer.
  9. #9  
    They need to announce a Partner for hardware yesterday. We palm defenders can wait for just about anything, but they are testing us on this one.
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  10. pdch's Avatar
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       #10  
    Quote Originally Posted by barkerja View Post
    Ah, okay I see what you mean now. I took it as the other way. The only hurdle (and it's a big hurdle with such a small user base) is volume of sales. There needs to be a very large volume of app sales in order for HP to recoup their loss from hardware.

    The other hurdle, is actually having a large app store. And by large, I mean hundreds of thousands of apps, apps that apply to every type of consumer.
    The point is, after this weekend, HP sees how to eliminate the first problem. They can build an INCREDIBLY large user base quickly at current pricing. That will lure in developers which will mean more apps to make more on the margin. It all starts with user base, and that problem was just accidentally solved.
  11. #11  
    say HP loses $150 on each Touchpad at current prices, and the surcharge is $1. That means HP would need each TP owner to buy at least 150 paid apps just to break even.

    Not gonna happen.
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       #12  
    Quote Originally Posted by tasogare View Post
    say HP loses $150 on each Touchpad at current prices, and the surcharge is $1. That means HP would need each TP owner to buy at least 150 paid apps just to break even.

    Not gonna happen.
    They know they are losing money on the current product, so you use it for your initial market flood. That is why the next point says to bring the NEXT generation of devices in and sell at close to if not SLIGHTLY below cost. That is when you start to teeter toward profit. By generation 3, profit will begin to rise.

    Also, through the life of a touchpad, if APP developers fill the app store, buying a large number of Apps is not hard to believe.
  13. #13  
    They're losing more than $150 on each one. No way they're going to make enough to even break even.
  14. #14  
    Quote Originally Posted by pdch View Post
    They know they are losing money on the current product, so you use it for your initial market flood. That is why the next point says to bring the NEXT generation of devices in and sell at close to if not SLIGHTLY below cost. That is when you start to teeter toward profit. By generation 3, profit will begin to rise.

    Also, through the life of a touchpad, if APP developers fill the app store, buying a large number of Apps is not hard to believe.
    Even at Apple's volume of sales, they barely break even / profit with their app store. This model only works in the game industry where software purchase is regular and at a much higher profit margin.
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       #15  
    Quote Originally Posted by chickenbutt View Post
    They're losing more than $150 on each one. No way they're going to make enough to even break even.
    Actually, most cost to build estimates put the 32GB at just below $300. As they build more, this cost will go down. As they build the next generation, costs should go down more since they will have a mature manufacturing system even though material may increase.
  16. #16  
    Quote Originally Posted by pdch View Post
    They know they are losing money on the current product, so you use it for your initial market flood. That is why the next point says to bring the NEXT generation of devices in and sell at close to if not SLIGHTLY below cost. That is when you start to teeter toward profit. By generation 3, profit will begin to rise.

    Also, through the life of a touchpad, if APP developers fill the app store, buying a large number of Apps is not hard to believe.
    Who's going to build the next gen devices.
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       #17  
    Quote Originally Posted by shingi_70 View Post
    Who's going to build the next gen devices.
    Did you read the plan? It suggests they fire Leo-tard and announce that they have heard the public and will go back to developing devices....

    Also, remember, we are JUST talking about tablets here. The phones would still command a better profit per device, and would sell once you build a large WebOS base through the tablets.
  18. #18  
    This is a very good business plan for a company with deep pockets, such as HP...problem is they have an ***** for a CEO and he's not going to be smart enough to see what just happened Saturday could be a catalyst for a huge shift in power toward webOS so unless there's someone lurking in the shadows at HP (or on the board of directors) this will go right over Leo's head. It's a shame, too...I was fortunate to have a son who works for Best Buy and he picked up a tablet for me. I love the thing! I wasn't going to foray into the tablet scene at $400 plus but at $100....I'm in it now and so are another 750k people. It would be a shame to not capitalize on this. Maybe Samsung will see the value in webOS (and the patent portfolio) and cut a deal to aquire all of it...
    If "If's" and "But's" were candy and nuts we'd all have a Merry Christmas!


  19. #19  
    Quote Originally Posted by pdch View Post
    Did you read the plan? It suggests they fire Leo-tard and announce that they have heard the public and will go back to developing devices....

    Also, remember, we are JUST talking about tablets here. The phones would still command a better profit per device, and would sell once you build a large WebOS base through the tablets.
    You do know how much money they have lost, and if they back out of the anoumity deal who knows how much money they have to pay. Staying the course and going full enterprise is safer then trying to go back to the status quo this time.

    Still not convinced they have number 2. Maybe 3 or 4 at best.
  20. #20  
    Quote Originally Posted by pdch View Post
    Actually, most cost to build estimates put the 32GB at just below $300. As they build more, this cost will go down. As they build the next generation, costs should go down more since they will have a mature manufacturing system even though material may increase.
    It'd take a while for them to be even breaking even on the first TouchPads sold then. Plus all the next generation ones that they're going to make with your plan. Not really a fast way for profit. You don't even know if the next generation will succeed and if people will buy them.
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