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  1. #21  
    Quote Originally Posted by genearch View Post
    It doesn't

    So it makes sense to lose $200M intentionally just to get WebOS in the hands of consumers?

    Smart business indeed

    Here's HP's 1 year plan

    H-P's One-Year Plan - WSJ.com
    Yes it does. It depends on how much you sell in apps and how much of a loss you can take to justify market share. I think Microsoft is the world's largest loss leader and they are still doing pretty good for themselves. As long as HP continues to make products at a profit (printers, servers, etc.) they can offset their losses to push deep into another market. How much were they losing by the product just sitting on the shelf?

    Edit: Plus when you start ramping up sales the cost of most components start to drop. Who would have thought 5 years ago that a good quality 42 inch LCD TV would sale for under $500 today, especially when they were close to $2000 then?
    Last edited by k4ever; 09/02/2011 at 03:35 PM.
  2. #22  
    Quote Originally Posted by k4ever View Post
    Yes it does. It depends on how much you sell in apps and how much of a loss you can take to justify market share. I think Microsoft is the world's largest loss leader and they are still doing pretty good for themselves. As long as HP continues to make products at a profit (printers, servers, etc.) they can offset their losses to push deep into another market. How much were they losing by the product just sitting on the shelf?
    Except that the TouchPad was supposed to be a high margin product. I don't think it was ever the plan to bank on making the money from apps.
  3. #23  
    Quote Originally Posted by sf_basilix View Post
    Just a fun thought. Imagine HP holding their last batch of touchpads, for the day that apple releases the ipad3.
    I love the idea....
    Would be epic if it was MS vs apple...
  4. #24  
    Quote Originally Posted by beardedspoooon View Post
    Except that the TouchPad was supposed to be a high margin product. I don't think it was ever the plan to bank on making the money from apps.
    The margins were supposed to come from the sale of apps and services, not the hardware. That would tie right in to HP becoming a software and services company. Even Mark Hurd let out the Freudian slip that HP did not by webOS to make phones (or hardware). I think HP's problem is that they did not have another hardware maker on tap before they killed the Touchpad and the Pre line.

    Edit: HP has poor timing on everything. Just think about how much more money they would have made if they had offered the HP Care Package when the product first launch. A lot of use paid $75-100 for a Square Trade warranty on our Touchpads. Others paid for the Best Buy warranty. They could have made that additional money off the product had the service been available at launch. They could also charge way less than 30% on all app and movie sales to undercut Apple and make a lot of money on that.
    Last edited by k4ever; 09/02/2011 at 04:16 PM.
  5. #25  
    The simple answer is that HP do not have Apple's marketing department, in fact I don't think another tech related company does have a marketing department as good as Apple's. Apple are able to charge high prices and create huge margins on their product for 2 reasons:-
    1. Their products are good (They are, overpriced is a different matter).
    2. They convince the public their products are must have's regardless of the price.

    HP simply don't have that ability and hence the only way they can compete would be by 'dumping' tablets on the market at ridiculous prices which is what they have done although not in an attempt to corner marketshare which is the usual reason.

    What it has shown though is that the price point for a good tablet is around the 150-200 market or equivalent in dollars, you hit that price and lots of people will take the technology up.
  6. #26  
    Quote Originally Posted by k4ever View Post
    The margins were supposed to come from the sale of apps and services, not the hardware.
    When was that ever stated? It's unlikely HP would ever recover costs if relying on the App Cat to make the difference. That certainly isn't the way Apple is making money.

    That would tie right in to HP becoming a software and services company. Even Mark Hurd let out the Freudian slip that HP did not by webOS to make phones (or hardware).
    It wasn't a slip, it was stated more than once that they didn't buy Palm just to get into the phone business. People just didn't want to hear it.

    I don't believe the intention was EVER to rely only on software and services for making money, though. There was a plan in place to use the software across a multitude of hardware products.


    I think HP's problem is that they did not have another hardware maker on tap before they killed the Touchpad and the Pre line.

    No doubt true... but the people that needed to put deals like that in place, apparently didn't know their own hardware lines were being killed.
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