A analysis conducted in June by the research firm iSuppli, claimed that a 16GB TouchPad cost $306.65 to build, while the 32GB version cost $328.65 (both parts and manufacturing costs). These teardown costs have been criticized by a number of industry types as not taking into account the total bulk purchases, discounts, licensing fees, buyback (kickback) deals that are in place between companies for all of their lines of business not just one particular product. For example, Apple apparently has deals in place that go like this: "We will buy component X for the I-phone for $$ if you sell us component Y for the I-pod for $." Indeed isuppi after further review, lowered the cost estimates of both the Iphone and the Fire from their initial analysis. No redo was every apparantly done on the TP which is understandable since it was discontinued. HP, being the largest PC maker in the world, had the ability to really negotiate prices and nobody really knows at this point what they actually paid for the components that went into the TP.
Originally Posted by inertia1
If TP would have introduced the 32gig TP at $299, it would have lost -even at what is probably an inflated teardown figure - $29. IF you have a long range plan to create a total ecosystem that included phones and printers and and desktops as well as apps and movie sales, I think that can be justified. (Especially with the printers IMO. If there had been a good printer that worked perfectly and wirelessly with a TP, there would have been sales not only of the printers but lots and lots of future ink cartridge sales where HP makes a huge profit) I know for a fact that there was training going on on HP Desktops that had webOS on them when the plug was pulled and who knows what else might have been planned.
Further, by introducing the 32gig at $299, I don't think you would have needed to have introduced a 16gig which, under any circumstances, HP would always lose more money on given that the only difference was a chip or two. Later, after the TP had been established and gained some market share HP could have introduced something like the TP GO for $199. In all these teardowns costs, size of the screen is the single biggest factor, so perhaps that would not have been a huge loss either. Then could come a higher-end version with more stuff and and actual profit margin on the device (64gig, white, Video out, full USB port, SD card, ahhhh, heaven...)
That's not saying it all would have worked out for HP. Given their dysfunction it is likely it wouldn't have. There is also no guarantee the Fire is going to pan out. But -- getting back on track to the thread -- the still strong resale market (despite the silly article in the OP) shows where a good price point would have been if the TP was going to have ANY chance at all.