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  1. #21  
    Quote Originally Posted by Syndil View Post
    Ditto. And I don't buy that it costs HP $300 or more to make a tablet. I've already predicted that the average price of a high-end tablet will eventually plummet to $200 or less. Touchpad was a bit more and a bit faster than I expected, but still, I think it may have shoved the market in the right direction.
    Last year when the ipad came out, there were a few shenzen iPad Android knock-offs that led to some cheap $150 Cobys and Ekens being sold at Walgreens/K-Mart. I inquired about manufacturing a few and re-branding them to sell on ebay. The component cost for those were $80 with ****ty resistive screens and ARM7 Rock-chip CPUs. My buddy bought 300 of them from China. 80% had a return failure rate. All of them had ghastly light leaks and flimsy plastic.

    The $150 Augens sold at K-Mart had a cost of $90 if you ordered 3000 units. Augen and K-Mart split $60 of profit for that ****ty piece of electronic.

    We inquired about ARM 8 CPUs @ 800mhz, batteries with more than 1100 mAH, and 2 point capacitive LCD screens. Guess what, the factory in China quoted us $260 in whole-sale pricing.

    The NOOK color is sold at break-even or at a lost.

    SO the short answer, I do believe the $300 BOM (Build of Material) Cost for the HP Touchpad.
    redmist and dancom96 like this.
  2. #22  
    Quote Originally Posted by cashmonee View Post
    Then I am sure you agree that the iPad is the superior product, and hence the reason the iPad is the tablet market. I'm not trying to get into an Apple war here. All I am saying is that, one, the Touchpad price had nothing to do with its demise, and two, anything below $300-$350 for a tablet is not sustainable at this point.
    my claim of apple stuff being far overpriced still stands. and their near $80 billion in cash supports that claim.
    @agentmock

    Audiovox SMT5600 (WM) --> Cingular 8125 (WM) --> Sprint Mogul 8525 (WM) --> Palm Pre (webOS)- --> Sprint Franken Pre2 (webOS) + 32gb Touchpad (webOS)
  3. #23  
    You have a somewhat naive view, then, of manufacturing and supply chain management if you think Apples cash reserves prove that the iPad is overpriced. Uderstandable, but naive just the same.

    Don't forget that before Apples reveal in early 2010, industry experts all al round the world pegged the launch price at 50% to 100% higher than it launched at. And this came from their knowledge of component pricing and profit margins specific to electronics and Apple.

    You'll need a much more convincing argument other than, "this is what I think."
  4. #24  
    Quote Originally Posted by finngirl View Post
    You have a somewhat naive view, then, of manufacturing and supply chain management if you think Apples cash reserves prove that the iPad is overpriced. Uderstandable, but naive just the same.

    Don't forget that before Apples reveal in early 2010, industry experts all al round the world pegged the launch price at 50% to 100% higher than it launched at. And this came from their knowledge of component pricing and profit margins specific to electronics and Apple.

    You'll need a much more convincing argument other than, "this is what I think."
    So

    you would say

    HP makes $2 billion a year in profit off computer sales while being the #1 computer manufacturer (#1 meaning highest volume, highest volume = cogs) and apple, which has only a 20% market share, which sells its iphone at break-even or net loss, and that they can make 10X's the profit magically????

    Net sales revenue
    Cost of goods sold
    = Gross profit
    SG&A expenses (combined costs of operating the company)
    = EBITDA
    Depreciation & amortization
    = EBIT
    Interest expense (cost of borrowing money)
    = EBT
    Tax expense
    = Net income

    whats are the biggest expenses?

    COGS

    SGA

    now, either running apple costs nothing to run (people work for free, commercials are free, apple stores are free) or buying products costs nothing.

    since neither of those are the case, then we can assume that profit = revenue - cogs is the single biggest contributor to net income. that is, price points.

    this is easily found to be the case:
    Apple Rides High-Margin Hardware to Competitive Supremacy - Mobile & Telecom Market Research at iSuppli
    Why Apple's Gross Margins Are So High | Markets | Minyanville.com
    AppleInsider | High-margin accessory makers have high hopes for Apple's iPad
    iPod Touch not the only high-margin apple product - Ars Technica OpenForum
    etc.

    you can only capture so much of the market as one of the highest priced out there. thats why everyone doesnt drive ferrari's.

    how else do you think they ran 40% GMP in 2009 and 39.4% GMP in 2010????

    overpriced. this is partly why iphone market share is declining. people are starting to want to invest into an ecosystem and while the iphone has become decently affordable with subsidization....the rest of the ecosystem (ipad, macbook, etc.) is not.
    @agentmock

    Audiovox SMT5600 (WM) --> Cingular 8125 (WM) --> Sprint Mogul 8525 (WM) --> Palm Pre (webOS)- --> Sprint Franken Pre2 (webOS) + 32gb Touchpad (webOS)
  5. #25  
    Quote Originally Posted by ilovedessert View Post
    $99 is the magic tablet price point
    There's nothing particularly magicical about being able to sell something at 1/3 of what it costs to make. The magic would be if one could actually turn a profit at that price point...
    Page Plus Cellular - Talk Smart
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    #26  
    Quote Originally Posted by prethadd81 View Post
    Tablets shouldn't cost more then a laptop or netbook!
    Tell that to Apple's profit margins
  7. #27  
    Quote Originally Posted by 65fastback View Post
    this is partly why iphone market share is declining. people are starting to want to invest into an ecosystem and while the iphone has become decently affordable with subsidization....the rest of the ecosystem (ipad, macbook, etc.) is not.
    This sort of invalidates your whole premise though.

    The 15 month old iPhone 4 is still the top selling phone on Verizon and AT&T. The phone in second place at AT&T is the 27 month old iPhone 3GS. Sprint all but said that they can't be competitive without selling the iPhone (in their filings for the AT&T lawsuit).

    iPhone market share may be going down but it's not because people aren't buying them.
  8. #28  
    Quote Originally Posted by dr_lha View Post
    They'd sell a lot of Ferrari's at $20,000 as well, doesn't mean that's the price they should sell them at.
    ferrari doesn't need to prove itself in a new market. Does it?
  9. #29  
    Quote Originally Posted by cashmonee View Post
    Unfortunately it costs a lot more than that to make. Plus I think the iPad is showing that price point doesn't matter when you have a top-notch product.

    The TouchPad didn't sell because it was half-baked at release and has no ecosystem. It is selling now because people love a deal.
    Will you quit that crap already? Take that mess to TiPB were you will find like minded people. This is not a place to try to peddle the iPad. The people who are here did not want one for one reason or another.

    The iPad is showing that if you run a good advertising campaign and stand behind your device (which HP did not) people will buy it despite its flaws. There is nothing top notch about the iPad (hardware or software) accept Apple's support and marketing reach.

    HP was starting to make headway with the TouchPad before they overreacted and pulled the plug. Doesn't matter now. The $99 price point for a tablet that is worth 3 times more was too good to pass up. There are folks buying them at $250 also.
  10. #30  
    Quote Originally Posted by clevin View Post
    ferrari doesn't need to prove itself in a new market. Does it?
    People don't buy Ferrari for the speed or elegance anymore. There are a ton of cars that are faster, better looking, and cost less. People buy Ferrari for the status it represents. If you start selling Ferraris at $20,000 a lot of people will buy them but eventually they will lose their spot as a status symbol and you could never sell them again at the $200,000-400,000 price point they command now.

    The TouchPad is all over the map with pricing. It sold well when HP discounted it through Staples and other stores. Best Buy refused to discount it and then got upset when everyone was buying them like crazy from Staples (which is right down the street from Best Buy in my town). HP used them as an excuse to exit the hardware market to satisfy their dream of becoming IBM. It sold out at the $99 price point. It also sells well on ebay at the $250 price point.

    The $99 price point was used simply to clear inventory. HP still gets revenue from app sales and services so it is not a total lost for them. HP can do this, Android hardware makers can't which is why you won't see a good quality Android tablet at this price point (unless you put Android on a TouchPad). They depend solely on the revenue generated from the sale of the hardware.
  11. #31  
    Paying ninety-nine dollars for a tablet is not "magic". As has been said, the only justification for HP to sell their TouchPad at that price is to clear their inventory; they could have set the price at $200 and $250, the stock would have cleared almost just as quickly.
    If any tablet price is deemed "magic", it'd be selling the device at a break-even price. That's figuring in cost of parts, labor, advertising, etc.; they don't make money off of it, but they lose absolutely nothing. Then you sell applications for the device at a profitable price, accessories at a profitable price, extended warranties, repairs, etc.
    In the end, you make money because more people bought the device (than they would have if it was sold at a profitable price) so you have more people buying aftermarket goods for it. I'm not necessarily saying they make MORE money than if they would have sold the tablet at a profitable price...
    There's a term for this; something along the lines of a "razor" something device... Sell the product at a loss, make money off of supporting the device. Like with game consoles.

    How much HP DIDN'T support and push the TouchPad like they should have really reminds me of the ZuneHD. It was quite superior to its competitor (at the time, Apple's third generation iPod touch) in many places, but Microsoft supported the device nowhere near how much they should have. It's almost, to me, as if they didn't care about the device. To me, Zune is dead (as hardware). Even though HP's webOS devices will no longer be supported/produced, I hope the OS will live on strongly on other hardware. It is a nice, fresh operating system.
    If only the ZuneHD's UI could live on... WP7 just isn't the same.
  12.    #32  
    HI,

    You left out one other sin of HP.....they rushed out a hardware design based on a tablet they had been working on for win7...it was a 2 year old design....the webOS software group told them a head of time that the software was already beyond the hardware...but Leo wanted it on the market ASAP....they the compounded their error by not waiting until webOS 3.1.1 was out and fixed most of the problems that the pre-reviews and reviews had....

    Leo is arrogant, wants immediate gratification instead of having it right...he's impulsive and I assume no matter how he packs the board I don't think they stockholders will be amused by his vacillation, constant changing his mind and deceiving the public and now by basically kissing of $1.2 billion investment, (not to mention the hundreds of millions poured into webOS and hardware up until he killed it off).

    Even this friends on the board have to answer to the stockholders...whose investment in HP is now worth a fraction of what it was before his brief brilliant career at HP! The stockholders are also going want to know what HP will do with webOS...if they can't license it off or incorporate it into something else...it will be the albatross around Leo's neck that will sink him....after all they will want to see some kind of return after spending $1.2 billion

    Leo was too foolish to have the ads say we maybe slightly thicker and slightly heavier than the iPad 2, but we have wireless charging and touch to share....but they left that out of the ads!
    Take care,

    Jay
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  13. #33  
    Do we really know how much they cost to make. You can't just say parts cost this this and this. They pay for the stuff in bulk. The Touchpad could have very well cost $200 to build.
  14.    #34  
    Hi all,

    Good point, however no matter how you slice it....HP blew it...

    take care,

    Jay
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  15. #35  
    I agree with the OP.
    I will never again pay more than $99 for a tablet.
  16. #36  
    Bought the girlfriend a $119 8 inch coby tablet at frys labor day because i got tired of waiting around for my SMB order. 1 ghz a8 cortex, 512 system ram, 4 gigs flash ram, Micro SD, USB port HDMI port, android 2.2, 800x600 resistive touch screen

    after a little work it has flash, netflix, and android market. Took a bit to get back into the habit of using my fingernail instead of the finger pad, but besides that it works like a charm for web browsing, movie watching, music listening, book reading, etc. Android 2.2 is fairly functional, but i do wish there was a way to run webOS instead

    the $99 pricepoint may require compromises compared to top of the line systems, but unusable is overstating the case. a $99 7" webOS tablet based on the pre cpu seems quite doable and possibly profitable with accessories/apps factored in
    USRobotics Palm Pilot -> Palm 3e -> Treo 180 ->Treo 600 -> Treo 650 -> Centro -> Palm Pre
  17. #37  
    Quote Originally Posted by cashmonee View Post
    You clearly haven't used an iPad for a significant amount of time. While the Touchpad is usable it pales in comparison to the iPad.

    None of that matters though. The truth is anything under $300 is probably not sustainable. At sub-$400 you still are talking margins similar to pc margins which hp is running away from as fast as it can.

    In the end, the only thing the firesale proves is people love a great deal.
    In your opinion. And I think therein lies the problem. Most of these forums, nay, even blogs and tech articles, end up being nothing more than someone's opinion. And we forget that because so much is presented with an air of authority that makes it appear factual. It's gotten so specific that now we can't even compare technical specifications because different devices with the same exact hardware "specs" under the hood appear to perform differently, because of the way they are implemented, or software, or both. People go on and on about this, in an effort to justify their own opinions and positions, and to what end? Not much. So you are correct, "None of that matters, though." How Susan feels about her purchases and chosen equipment really doesn't have anything to do with John's experience. But we are told to think this. If I bought a mac that failed, and I took it back, and it broke again, I'd surmise at some point that lots of these mac folks who go on and on about their gadgets are snowed to some extent, or they are lying. My own experience wouldn't match what I read about with reliability and so on. "Well that's not how *I* feel about it, mine keeps breaking." You just can't escape bias out here on the net.

    Consider the arguments about the Touchpad vs the iPad on bootup times. Yes, different specifications, and still the iPad is faster loading, AND faster rotating the screen. Why are either of these issues important at all? Don't I care about what happens once I actually start USING the thing? Would I have noticed if so many articles hadn't brought it up? Probably not. But now it matters to me because so many did make such a big deal about it. And yet in the end I really don't care. It's my experience overall (even including the price I paid), that matters most. That's why I still liked my PrePlus after getting it replaced 5 times. And that's *my* opinion.
    Last edited by copasetic; 09/12/2011 at 02:32 AM.
  18. #38  
    article title is largely contradicted by the content in the article.

    The article title deems $99 as the "magic" price point. But then in a few paragraphs proves there is nothing "magic" about it since "HP only had the freedom to sell its tablets at a staggering loss because it's throwing in the towel". Hence, there's nothing magical at all. $99 is not a sustainable price. To be magical it would have to be profitable. Hell, by the reasoning of the title, 1 cent is also magical. It's also ridiculous.

    Another thing. HP sold maybe around 1 million touchpads many at $99. Last quarter Apple sold 10 million ipads at $499 and up. I'm gonna guess they'll do similar this quarter. Seems to me $499 is a good enough price point for someone. Also consider if the ipad 2 was also $99 how many would they sell? If they could make 50 million of them they'd sell em all.

    Regardless, if a company can't profit at a price point it's not magic. It's a clearance.
    Last edited by SnotBoogie; 09/12/2011 at 03:10 AM.
    You come at the king. You best not miss.
  19. #39  
    Quote Originally Posted by copasetic View Post
    Consider the arguments about the Touchpad vs the iPad on bootup times. Yes, different specifications, and still the iPad is faster loading, AND faster rotating the screen. Why are either of these issues important at all? Don't I care about what happens once I actually start USING the thing? Would I have noticed if so many articles hadn't brought it up? Probably not. But now it matters to me because so many did make such a big deal about it. And yet in the end I really don't care. It's my experience overall (even including the price I paid), that matters most. That's why I still liked my PrePlus after getting it replaced 5 times. And that's *my* opinion.
    I think they're important because boot times and rotation smoothness are indicative of the level of performance you can expect from your tablet. If the TouchPad takes forever to boot and the screen rotation is erratic, the chances are pretty good that you can expect poor performance, unpredictable responsiveness, and unexplained lagginess throughout the system. And sure enough...
  20. DRFP's Avatar
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    #40  
    Quote Originally Posted by virtualjock View Post

    We inquired about ARM 8 CPUs @ 800mhz, batteries with more than 1100 mAH, and 2 point capacitive LCD screens. Guess what, the factory in China quoted us $260 in whole-sale pricing.

    The NOOK color is sold at break-even or at a lost.

    SO the short answer, I do believe the $300 BOM (Build of Material) Cost for the HP Touchpad.
    I really disagree with 300 build cost.
    look a pc once retailed at 3,000 usd then it was mass produced and overtime the cost came down
    now they can sell a working laptop for 299 usd

    A tablet is a lot less than that 299 pc.


    the most expensive components are
    1. Screen
    2. Processor

    memory and ram are not very expensive at 16 and 32gb

    the rest is pennies honestly


    In USA Today an article today is about a Philly paper selling readers a $99 Android tablet if they subscribe

    This whole notion "no one can profit so it can't or won't be done " is false.

    Last edited by drfp; 09/13/2011 at 12:52 AM.
    I'm not here to criticize the Touchpad but to learn how to make it better.
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