HP: Proof That People Love Small Cheap Computers

HP told the world sales of the TouchPad were disappointing when the price was $400 but now they are clearing them at $100 and sales sky-rocketed. This is proof that consumers had no issues with the performance and if OEMs and retailers refrain from “early adopter” pricing, products will sell. China is quite willing to keep prices for components and assembly low, so selling the gadget for $200 likely would have made it a success. Tablets are not ultra-anything. They are small cheap computers and should be produced and sold as such.

Copying Apple’s approach does not work for everyone. That is not a competitive market. Dell, are you paying attention? Nope. Dell plans to raise prices by “adding value”. The world can configure its own PCs and run FLOSS. They don’t need more “value”/higher prices.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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9 Responses to HP: Proof That People Love Small Cheap Computers

  1. Contrarian says:

    “Key to…In fact…I guess”

    You are a fool, #oiaohm, either intentionally or just out of ignorance, I do not know or care. Game consoles are marketed under the Gillete model, i.e. Give away the razors and sell the blades!”, not as “loss-leaders”. Go study some more and quit wasting our time with your inventions.

  2. oiaohm says:

    Contrarian loss leader is a multi used term.
    “The intention of a loss-leader is to give a salesman a chance to up-sell the potential buyer by presenting a more capable product (that has a more profitable margin as well).” This is a wrong statement.

    Sony Playstation all of them have been loss leaders. Reason the games have a charge on them to recover the loss.

    The idea was to get you to the point you can sell more product.

    This might be a more capable product or in the case of the Sony Playstation addons like games, controllers, memory cards and so on. Yes this is the reason why sony tries to prevent copies of particular things.

    Key to a loss leader is that recover the cost.

    In fact one of the worst things you can do is use a loss leader to upsell to a replacement item alone. Because then the people who aquired the loss leader you will not make as much money from.

    I guess you are in the USA Contrarian because is common for people from there not to have a full understanding of loss leader dynamics and stupidly make the mistake of using a loss leader only to get people in door to sell something else as a replacement. Instead of getting them in the door with a loss leader to buy addons to the loss leader you make a killing on. So the person never comes directly aware they aquired a loss leader by your actions.

    Google + Motorola are in the perfect location to pull off loss leader products. Google controls the store.

    Hp was and still is not in a good location to run a loss leader from.

    Historically the problem with a loss leader where you intend to raise the price later is the problem of competition appearing with clones fighting against you.

    Lot of companies are trying to work out how to make 100 dollar tablets. As tech advances they will become more decent.

  3. Why does Contrarian feel the need to limit other people’s intentions. A retailer can have a loss-leader for any purpose under the sun.

  4. Contrarian says:

    You are misinfored, #pogson. A “loss leader” in the retail sense is a price on a product that is intended solely to get someone into one’s emporium. It is not intended to build a trade in the item so that prices can be raised later if/when some dependency on the product is created. The intention of a loss-leader is to give a salesman a chance to up-sell the potential buyer by presenting a more capable product (that has a more profitable margin as well).

  5. Such a project is called a “loss-leader” and it is a tried-and-true means of advertising in the retail space.

  6. Contrarian says:

    Pardon the guffaw, #pogson. The Bradley fellow says “iPad 2 competitors don’t have to cut prices permanently, but an initial push at $99 would work to get a tablet off the shelf and into the hands of hundreds of thousands of users. The vendor can take a short-term loss on the first couple hundred thousand units just to build a base and make a dent, then return to more normal pricing.”

    I don’t know who would throw ten or twenty million bucks at such a scheme in order to be able to get some ball rolling, but once the scheme was unmasked as a deliberate attempt to distort a market, the government might step in with an anticompetitive suit and fine the bejeezus out of such an innovator.

    People complained that Microsoft was buying into the games console biz with the Xbox, but they didn’t ever try to raise the price once Xbox was established as the popular choice.

  7. It’s pretty clear that many producers of Android/Linux on ARM are sticking with the “early adopter” pricing. That is not sustainable and others like Archos will take up the slack and eventually prices will come down. It’s the same pricing curve we had with 64bit CPUs. They were $1K for a few months and a few years later you can buy one for $50 or so. HP apparently has decided to leave mass production behind. That’s their choice and the world will move on.

  8. Contrarian says:

    “This is proof that consumers had no issues with the performance and if OEMs and retailers refrain from “early adopter” pricing, products will sell.”

    You may be the only person on the planet who has recognized this, #pogson. Perhaps you could invest in such a business and make millions that you could then give away to worthy folk.

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