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  1.    #1  
    I'm still scratching my head with the recent decision on dropping the touchpad. Yes, everyone has voiced their opinion and has stated that the touchpad didn't sell and the only reason why it sold was due to the ultra low price... yada yada yada

    Reality is, there is a massive back-order at every large distribution center I have called. We're talking tens of thousands of units on back order *at each location*, and yet these centers will only be able to allocate between 2k - 5k. I have confirmed this myself!

    I am baffled that HP will have the 2nd place in tablet computing (albeit far from apple, but it's still a commanding lead over every other manufacturer), they've also now received a huge demand for more tablets (far more than they can manufacture), and yet they still want to drop it?

    With such a huge demand for their device, they're already calling it a loss, so why not make it a better loss by putting more of your webos devices in consumer's hands so developers will see that there is a reason to continue working on developing apps?

    HP could make back a good portion of their losses through app sales and also through accessory sales. Sure, it may not add up to their total losses, but if they're not marketing this, they should consider using marketing dollars on building more units at this price than to advertise them. The advertisement is now done in the news with HP's killer price and demand - no need to spend all that money on Manny Pacquiao.

    Look, I was hesitant to purchase the touchpad at first. I didn't see a need for it. I also was waiting for the smaller 7" Opal as I thought that would be a better fit for me to lug around. Now that I have the Touchpad, I love using it. Sure it has it's quirks, but I'm sure they'll be ironed out within time (I'm not holding my breath on the calendar fix though). I'm glad I was able to get one. I only wish everyone could have one to experience this.

    I've had friends and family asking me how I got one and how they could get one. Quite frankly, I don't think they'll ever get one since the only people who seem to be buying these are those who are placing massive quantity orders and reselling them at a higher price on ebay. (I'm really not a fan of that)

    I truly wish HP would retract their statement and continue making touchpads. I bet HP could place 2-4 million touchpads in the hands of consumers if they just priced it right. That would far surpass any android tablet and surely bring developers on board in massive quantities.

    Now if only they could do something similar with a new phone....
  2. #2  
    The problem is that HP's #2 spot was gained at the expense of profit. They lost about $200 on each sale. That's not a good value.

    If they could find a way to spin the tablet business off and make low-cost tablets in that range, then maybe it would be worth it. But the driving factor is price, and they can't sustain that.
  3.    #3  
    Quote Originally Posted by Typo Lad View Post
    The problem is that HP's #2 spot was gained at the expense of profit. They lost about $200 on each sale. That's not a good value.

    If they could find a way to spin the tablet business off and make low-cost tablets in that range, then maybe it would be worth it. But the driving factor is price, and they can't sustain that.
    I understand this methodology, however, Microsoft did this with xbox and it paid off well for them. They were up against playstation and they ended up selling their box for a loss just to get it into consumers hands. Once developers saw this, they had tons of them writing code since the user-base went up significantly.

    HP could do the same thing, take a loss on the hardware just to get it in consumer's hands and spread the base, making up later with app sales or even a better device. If people like the touchpad now imagine how much they'd like it when it's improved. Consumers will flock to the newer, better device as now they enjoy webos, and will likely pay a bit more.
    Last edited by sf_basilix; 09/07/2011 at 12:25 PM.
  4. #4  
    It's a bit different than video game systems. With consoles, the makers have the games to use as revenue stream, as well as other fees and peripherals. That's where they get you.

    There's nothing like that for WebOS. HP would be throwing money down a hole.

    Still, it would be great to see someone come out with the Opal, or other such device., and to price it lower. Allegedly the Amazon tablet is going to follow the game console model, but we shall see.
  5.    #5  
    Quote Originally Posted by Typo Lad View Post
    It's a bit different than video game systems. With consoles, the makers have the games to use as revenue stream, as well as other fees and peripherals. That's where they get you.

    There's nothing like that for WebOS. HP would be throwing money down a hole.

    Still, it would be great to see someone come out with the Opal, or other such device., and to price it lower. Allegedly the Amazon tablet is going to follow the game console model, but we shall see.
    Why wouldn't you see apps and accessories as a revenue stream? HP also makes money each time an app is sold. I see it the same way. HP can also develop additional cloud services for the Touchpad - again continual revenue stream.
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    #6  
    Quote Originally Posted by sf_basilix View Post
    Why wouldn't you see apps and accessories as a revenue stream? HP also makes money each time an app is sold. I see it the same way. HP can also develop additional cloud services for the Touchpad - again continual revenue stream.
    Consoles are a very different market. With every 40 game sold, MS/sony/Nintendo can take upto 10 share of the total for 'licensing' (or whatever they wish to call it). Where as the average price for an App in any app store is 3, there just is not enough profit there for HP to subsidise th loss.
  7. #7  
    Quote Originally Posted by sf_basilix View Post
    Why wouldn't you see apps and accessories as a revenue stream? HP also makes money each time an app is sold. I see it the same way. HP can also develop additional cloud services for the Touchpad - again continual revenue stream.
    There's a significant amount of difference in revenues generated from selling an app for $50 (typical video game) compared to selling an app for $1 (typical touchpad app).

    Think of how many $1 apps developers would need to sell for HP to get their share of losses back on each touchpad sold. You're counting on users buying hundreds of apps for HP to get their money back (not sure how much they get for each app purchased, but it surely isn't 100% as something has to go to the developers.) How many apps have you actually purchased so far for your touchpad? I've yet to buy one for mine. But, I am enjoying the free apps out there.
  8.    #8  
    I think if apple is able to make margin on it (granted, not as much as console games), HP should also be able to, however, points well taken.

    I still think HP should take this loss, and consider it marketing to generate a large user-base. Have their next touchpad outperform the ipad2 and charge more for it (but not as much as an ipad3!) so they can start making revenue. They're just not going to succeed unless they do.

    Again, they've got the momentum they've been longing for - why are they just throwing this out the door and not benefiting from it?
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    #9  
    phone apps 1 to 8 bucks
    console games 20 to 80 bucks

    the margin on console games is awesome...apps not so much... And isn't bad margins what got us in to this issue in the first place?
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    #10  
    Quote Originally Posted by sundevil98 View Post
    There's a significant amount of difference in revenues generated from selling an app for $50 (typical video game) compared to selling an app for $1 (typical touchpad app).

    Think of how many $1 apps developers would need to sell for HP to get their share of losses back on each touchpad sold. You're counting on users buying hundreds of apps for HP to get their money back (not sure how much they get for each app purchased, but it surely isn't 100% as something has to go to the developers.) How many apps have you actually purchased so far for your touchpad? I've yet to buy one for mine. But, I am enjoying the free apps out there.
    What about ad revenue from the browser and apps? I read that mozilla foundation makes at least $50 m annually from ads alone. A lot of the free apps on competing platforms use in app advertising.
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  11. #11  
    Quote Originally Posted by sf_basilix View Post
    Why wouldn't you see apps and accessories as a revenue stream? HP also makes money each time an app is sold. I see it the same way. HP can also develop additional cloud services for the Touchpad - again continual revenue stream.
    With video games, you HAVE to keep buying more games to enjoy your console. With touchpad, if all you do is surf the web, do emails, and watch Hulu, HP ain't getting another dime out of you. Similar industry in a sense that they're both tech but different business models. And keep in mind, apps on consoles sell for $50-60 (of which how much does Nintendo, Sony, MS get, I don't know) but apps for mobile platforms are rarely over $5.
  12. #12  
    Quote Originally Posted by Typo Lad View Post
    It's a bit different than video game systems. With consoles, the makers have the games to use as revenue stream, as well as other fees and peripherals. That's where they get you.

    There's nothing like that for WebOS. HP would be throwing money down a hole.

    Still, it would be great to see someone come out with the Opal, or other such device., and to price it lower. Allegedly the Amazon tablet is going to follow the game console model, but we shall see.
    Amazon has a pretty huge advantage in terms of ability to make this work. Not only will their tablet be a portal for apps, it'll be a portal for ebooks, electronics, clothing, etc.

    Another thing worth noting about the #2 tablet maker position, webOS is not the #2 platform. Can't really research it, but saw a story (maybe at bgr.com) about Android taking 20% of the tablet marketshare, with iPad dominating. While this doesn't take into account the TouchPad firesale, I doubt that however many TouchPads were sold is enough to make a huge difference (yes, this doesn't really take into account the different versions of Android floating around, etc.)
  13. #13  
    Quote Originally Posted by sf_basilix View Post
    I think if apple is able to make margin on it (granted, not as much as console games), HP should also be able to, however, points well taken.

    I still think HP should take this loss, and consider it marketing to generate a large user-base. Have their next touchpad outperform the ipad2 and charge more for it (but not as much as an ipad3!) so they can start making revenue. They're just not going to succeed unless they do.

    Again, they've got the momentum they've been longing for - why are they just throwing this out the door and not benefiting from it?
    Think about how many more iOS devices Apple has sold (at full price!) though. Think about how much larger the App Store is. Think about how much better iOS apps generally are.

    And despite all that, I suspect Apple's cut isn't as significant to their bottom line as it may appear since they have to pay for bandwidth, payment processing, and infrastructure.
    Typo Lad likes this.
  14. #14  
    Quote Originally Posted by nappy View Post
    Think about how many more iOS devices Apple has sold (at full price!) though. Think about how much larger the App Store is. Think about how much better iOS apps generally are.

    And despite all that, I suspect Apple's cut isn't as significant to their bottom line as it may appear since they have to pay for bandwidth, payment processing, and infrastructure.
    I don't know how legit the following is:

    With over one billion apps downloaded, surely Apple has been making a mint off of the iPhone App Store, right? Well, not exactly--not when you factor in the amount of free apps available and the percent that Apple actually skims off of the paid programs.

    Lightspeed Venture Partners has been crunching the numbers, trying to figure out exactly how much the company has made off the brisk app sales. Accord to the firm, the number of actual paid apps sold likely comes out in the 25-60 million range. If Apple gets a 30 percent cut of all of those apps, which sell at a median of $2.65, the company has made somewhere in the range of $20 to 45 million.

    Now that's not exactly an astronomical number for a company of Apple's size, especially given the total number of apps downloaded thus far. Still, considering the backseat Apple gets to take in the design of said apps, it's still a pretty sweet fallout.

    But in the end, Apple has always been more interested in the platform than the apps themselves. Apple sells iPhones, first and foremost, and the popularity of the App Store, paid or otherwise, can only help things on that front.
    How Much Does Apple Make from the App Store? | News & Opinion | PCMag.com

    That's from 2009, but 1 billion total downloads.
  15. #15  
    I think a better model is the mobile phone market. Within the
    UK phones are sold at a considerable loss but they come with a continuous downstream revenue stream (the calls).

    They should make some must have elements of webOS or part of the Palm registration a "pay monthly" service for a low micro payment value. Hook in the punters with attractive hardware at a give away price then milk them on a monthly basis for a fee they think is low but adds up. Look at the current offer on PRE3 and Touchpad combined. Free hardwAre and only 20 per month but for 24 months is 480!.

    Martin
  16. #16  
    Right. What Apple makes off Apps is "extra". The main earner is the iPad itself. Everything else is gravy.
  17. #17  
    Agree w/ the OP.

    My first post on the forum. I used Palm PDAs for a long time but never used Palm phones. I took the opportunity to buy an unlocked Pixi for about $50 to check out Webos. I was stunned by the OS. I ditched Apple and got a Veer for my wife and I. We love both the Veer and Webos. I was planning to get a 4G ATT TP when the infamous announcement was made.

    I was just able to acquire a Touchpad (off ebay; $255 for 32gb) - all I can say is WOW! Give this thing one more generation and it could be incredible. It already is.

    All the BS about too heavy, weight, shezzz. What are people smoking. I don't notice 2oz or .2 of an inch (or whatever it is), but I sure as heck notice the OS which is easily the best I've seen (not very familiar w/ Android, but the little I've used it was like "uggh!").

    The one BIG question I don't understand - everyone acknowledges (even HP) that the PC has peaked and pads will begin to become more dominate in the market. So, if you're in the computer business how do you NOT have a long term commitment to making pads part of you core business??? it's not like HP started selling cars and decided it needed to get out the the car business. Abandoning the pad business is literally abandoning their future. Plus, did they even give the enterprise a change?? They have the inside track to the enterprise that no other pad makes has. They don't even try??!!

    I understand they are spinning off hardware. But that hardware business is going to need a pad if it expects to be relevant in five years.

    None of this make sense. A great 1st generation product. A great proprietary OS in hand. A huge worldwide sales force and retail outlet. An obvious link between Webos, computer, printers and who knows what else that HP is already invested in. A HUGE enterprise market. And they quit? Make me chairman of HP, even I can figure out a better plan that Leo has.

    As a new Webos user, here's hoping somebody steps in and acts with common sense.
  18. #18  
    selling at cost and pulling a tiny margin via accessories and app sales would make more sense. Consider that the Xbox is a single hardware device with the lifecycle of 10 years. Over those 10 years, they reduced the manufacturing cost of the hardware so that they pull in a profit off of every sale now. The same is not true for a tablet, of which is refreshed close to twice a year.

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  19. #19  
    Quote Originally Posted by ballast View Post
    I think a better model is the mobile phone market. Within the
    UK phones are sold at a considerable loss but they come with a continuous downstream revenue stream (the calls).

    They should make some must have elements of webOS or part of the Palm registration a "pay monthly" service for a low micro payment value. Hook in the punters with attractive hardware at a give away price then milk them on a monthly basis for a fee they think is low but adds up. Look at the current offer on PRE3 and Touchpad combined. Free hardwAre and only 20 per month but for 24 months is 480!.

    Martin
    This seems like it could be a logical way to proceed, if HP had any sense. They are trying to model themselves into a software and services company, what better way to become one than to offer a "value added tablet" with cloud data storage (like a box.net solution), music streaming, priority downloads, priority & discounted upgrades on new hardware releases, and monthly promo code freebies for a low fixed monthly price. It would be up to HP to make sure that package had enough value to have people willing to pay $5 or so per month. As the numbers increased it would become even easier to develop partnerships with other vendors and services to increase value. (Free song of the week downloads to TP users, etc.)

    I wouldn't be a fan of a mandatory fee, but they could offer an unsubsidized price and the subscription price. They might need to add some advertising to make it fly, but that would be no different. than the Kindle with "special offers"

    In fact, at some point I suspect someone will market a "free" tablet based on such a model... with the obligatory 2 year contract.
    "Sometimes I feel like an OS-less child..."
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  20. #20  
    Quote Originally Posted by C-Note View Post
    This seems like it could be a logical way to proceed, if HP had any sense. They are trying to model themselves into a software and services company, what better way to become one than to offer a "value added tablet" with cloud data storage (like a box.net solution), music streaming, priority downloads, priority & discounted upgrades on new hardware releases, and monthly promo code freebies for a low fixed monthly price. It would be up to HP to make sure that package had enough value to have people willing to pay $5 or so per month. As the numbers increased it would become even easier to develop partnerships with other vendors and services to increase value. (Free song of the week downloads to TP users, etc.)

    I wouldn't be a fan of a mandatory fee, but they could offer an unsubsidized price and the subscription price. They might need to add some advertising to make it fly, but that would be no different. than the Kindle with "special offers"

    In fact, at some point I suspect someone will market a "free" tablet based on such a model... with the obligatory 2 year contract.
    There may some people that would be interested in something like that. There is no way for me. I've enough monthly fees as it is. It would feel too much like renting the device.
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