Linked by Thom Holwerda on Sun 24th Feb 2013 17:26 UTC
PDAs, Cellphones, Wireless "It's officially true: Hewlett-Packard is back in the mobile race. Today, HP is announcing its first Android product: the HP Slate 7. But it looks like the company won't be making a splash right away: Starting at $169.99, the new device will launch this April with a fairly unimpressive set of specs." As I've been working my behind off on a huge Palm article, HP turns around and slaps this thing in my face. You had one job, HP.
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RE[4]: It's a start...
by chithanh on Tue 26th Feb 2013 01:19 UTC in reply to "RE[3]: It's a start..."
chithanh
Member since:
2006-06-18

This is not how it works. If you want to enter some market, you need to provide better value than the competition until you can sell stuff via your brand. Producing innovative but high-priced stuff doesn't get you the necessary numbers.

The motivation for selling tablets is clear: the market for traditional PCs and Notebooks is shrinking, and tablets are growing and use many of the same distribution channels. If HP doesn't sell tablets, then it will fall behind its rivals. Like Lenovo which at MWC launched an extensive Android based assault on the tablet market.

This time though, HP does everything right:
- non-niche OS
- low price point
- mostly vanilla Android
- SD card slot

Especially the latter two you will find users asking for all the time when a new Android device is announced. HP probably won't make much profit (if at all) with this device, but that is not necessary at this point.

Reply Parent Score: 5

RE[5]: It's a start...
by Nelson on Tue 26th Feb 2013 06:54 in reply to "RE[4]: It's a start..."
Nelson Member since:
2005-11-29

There's cheap, and then there's unsustainable. It is fine for HP to have a low to mid range portfolio, but when low range means sub $200 it starts to get a little ridiculous. The price erosion going on is not likely healthy for anybody.

Its probably why Apple isn't participating, they decided they'd rather still make healthy margins on the iPad Mini rather than go dirt cheap.

Prices in this case are sticky-up and it will prove very difficult for HP and others to at some point in the future start extracting healthy margins.

Reply Parent Score: 3

RE[6]: It's a start...
by chithanh on Tue 26th Feb 2013 13:54 in reply to "RE[5]: It's a start..."
chithanh 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.

Reply Parent Score: 3