Linked by Thom Holwerda on Sun 24th Feb 2013 17:26 UTC
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Member since:
2006-06-18
"Unsustainable" would be selling below cost.
There is a market for premium ($500+) devices that is currently dominated by Apple, ASUS (Transformer) and Samsung (Galaxy Tab). This market is mostly unaffected by the competition in the low-cost sector.
The Chinese white-box manufacturers are active in the market of sub-$150 devices, HP is unable to compete there and wisely does not even try.
But between these price points, there is a large market where HP can compete today, even if the margins are low. This market is just for shipping devices in volume. Once they are present in that market and have a brand, then they can start selling premium devices with the margins. Margins on premium devices will not go away as observed above.