Featured: Could the HP TouchPad Accidentally End Up "Killing" the iPad?

Today, I stumbled on an article on Market Ticker that was very interesting to say the least - perhaps too interesting, because at first glance it may seem crazy, but at least some parts may turn out to be true eventually.

The author argues that the firesale of the HP Touchpad may have inadvertently end up "killing" the iPad. The point he's trying to make is that now that a lot of people have gotten a  good enough tablet for only $99, they are much less likely to pay $500 for a tablet, even if that tablet is called "iPad".

I've long thought that a tablet is pretty expensive at $500. Yes, I'm sure the components value that much, but is the whole product worth $500 to most people, considering you can do just some casual browsing on it, watch a few short videos (not very comfortable for 2 hour long movies) and play a few fun games? Does that warrant $500 for such a device? I don't think most people are willing to pay that much and surveys have shown that $500 is actually the maximum price someone would pay for a tablet. The average price is somewhere around $350, but they'd be much more likely to buy one for $250 or so.

The iPad may already start feeling that market pressure and consumer perception that tablets are not worth $500, and Apple is already cutting 25% from the demand for components from their suppliers. And that's even before an avalanche of inexpensive Android tablets will hit the market. The first one should be the Amazon Kindle Fire, which should be about half the price of an iPad, but still mainly focusing on reader capabilities. However, many people were getting an iPad for reading books anyway, but also to have some tablet features, and the Kindle Fire will provide them with that.

But things should really start to get interesting in the first half of 2012, when I expect several big companies, like even Samsung, to start launching inexpensive but "good enough" tablets. These tablets should educate consumers that a tablet is not a $500 device, but more like a $250-$300 device, that's mostly used for consumption anyway.

This may not end up actually "killing" the iPad, but it will probably relegate it to a niche market, with much fewer sales compared to the market at large, unless Apple decides to make a significantly cheaper iPad instead, but I doubt that's going to happen anytime soon, now that they've probably already working on a "retina" display iPad 3, where the display cost would be a large portion of the component cost. It remains to be seen how this will play out next year.

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About the Author

Lucian Armasu

Senior Writer
Lucian is passionate about writing about different technologies, talking about their potential, and predicting tech trends. Visit his <a href="http://techdomino.com/news">technology news</a> website at <a href="http://techdomino.com/">TechDomino.com</a>.
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