As Perry Hoekstra pointed out in his post ‘Forget the Apple Tax, how about an Android Discount?’ the tablet market is currently dominated by the Apple iPad, despite several Android competitors such as the Samsung Galaxy Tab or the Motorola Xoom. Perry commented on the current state of tablet competition:
In Marketing 101, when you have achieved functional parity with a competitor who dominates the market, how do you begin to chip away at their marketshare?
The Android tablet vendors will need to give a reason to the price-conscience consumer purchasing their first tablet or the bottom-dollar CFO looking at rolling out a tablet-based native application to hundreds of their field-force staff.
Severely cutting the price of expensive tablets is a risky move for Android tablet makers, but this past weekend the tablet industry experienced a sort of control group for that experiment. Late last week Hewlett Packard announced they would discontinue their line of TouchPad tablets, which launched a fire-sale of the tablets by retailers, discounting the TouchPad, previously priced at $499, to $99. At such a deep discount, the tablets flew off the shelves; anybody who had previously wanted a tablet but had been deterred by the high price tag rushed to buy the TouchPad.
Forbes advised against buying the TouchPad due to the nature of HPs relationship with its operating system, webOS. HP claims that they will continue to support webOS as an operating system for use in other electronics, but developers will most likely discontinue app development for webOS. Without new app development, a tablet’s functionality is locked down. The good news? A group of Android developers has announced a project to port the Android tablet operating system to the HP TouchPad, opening the Android market and developer ecosystem to the new TouchPad owners.
While the rapid success of the $99 TouchPad sale doesn’t translate directly to Android vs. iOS since HPs tablet ran a completely separate operating system, the principle stands – a lagging product can capture market share from Apple’s throne with a discounted price point.
Sources:
‘Touchdroid’ bringing Android to HP Touchpad
HPs $99 TouchPad selling out in retailer fire sale
Thinking of Buying a $99 TouchPad? Don’t
HPs TouchPad is Officially a Bomb: Best Buy wants HP to take them back
