What I learnt from the TouchPad saga

With the future (or lack thereof) of the TouchPad sealed on 18 August, it was clear that there really isn’t room enough in the market for so many tablets.  Apple has taken the biggest chunk of the tablet pie, and Android another biggish chunk (albeit by multiple manufacturers), that leaves everyone else to fight for the remaining small piece of the pie, a very small piece, indeed.

But then on the 19 August, things turned bittersweet for HP.  The TouchPad flew off the shelves faster than they can be found in the store rooms.  That had been the dreams of the HP executives, except they were flying off not at the price point HP wanted.  So what does it say about the tablet market?

No one will buy a tablet if it costs the same as the iPad

To many users, an iPad is just a bigger iPhone, and there are literally millions and millions of iPhone users out there.  They are already familiar with the iOS interface; they are already familiar with the App Store ecosystem; and more importantly, they know how to use it.  And if Jakob Nielsen ever taught me anything, it is that people like familiarity.

For people to change their behaviours and use something else, there needs to be incentive for them to do so.  An alternative tablet that costs just as much as the iPad is not that incentive.

Why should I, an Average Joe, who is so familiar with my iPhone, wants to buy something that I need to learn how to use when, for the same price, I can get something that I already know how to use?

iPad also has one advantage, iPhone apps works on it.  Okay, maybe not ALL iPhone apps work, and maybe they need to be scaled up, but in the majority of cases, people don’t want to pay twice to use a similar app if they already have one available.

So what is the incentive that will make people buy anything other than the iPad?

$99 seems to be the sweet spot

It’s not that consumers don’t embrace other tablets, it’s just that the tablets are marketed at the wrong price.  Just have a look at the fire sale price of the TouchPad.  Even though it is now obsolete, five million people step over each other just trying to find one.

The $99 price is certainly a very attractive price.  Irrespective of whether Android can be ported to the TouchPad, consumers (at least those who commented on forums, or is that fora?) can accept a $99 device that does hardly anything other than surfing the interweb.

There are consumers out there who want a second of third tablet, but $500 a pop is asking too much.  A $99 device is perfect for that.  There is certainly a niche at the bottom of the market for a low cost tablet.  In fact, Chinese manufacturers have been producing them, it’s just that no-one seems to notice.

Instant success is everything

Over at Economic Times, there is an article about how fast IT companies are cutting their losses early.

This has somehow become the norm, and it is scary.  HP never really let the TouchPad grow.  Granted, the hardware / software combination is not the spectacular, but it has its followers.  If Microsoft killed off the Xbox 360 because of poor sales, Kinect would not have existed.  But then again, Xbox 360 didn’t have that many competitions in its field.

It is scary to think that company will cut their losses so early.  I, for one, wouldn’t want to buy a tech that cost hundreds of dollar only to find out that they are discontinued as soon as I take it home.

I can buy a chair that IKEA doesn’t produce anymore, because it’s a chair, it still serves its function long after I die.  But for a piece of tech, whether it’s a phone, a tablet, a laptop or a modem, for better or for worse, it needs constant support like a kid needing constant attention.  I like to buy things that last.  And if I think that whatever I’m buying will become deadweight overnight, I will wait and see.  And if I wait and see, that means the company is not moving units.  Thus, it becomes a vicious cycle.

Words get out fast… very fast

It was only this Monday morning that Harvey Norman announced that there will be a fire sale of the TouchPad at 2 in the afternoon, and boy, did it spread like wildfire or what.  Twitters picked up on the news and all of a sudden, the whole nation is mobilised.

I really wondered how many people who were still at work sneaked out to buy one.  From the look of some photos, they are all office workers.

We are truly living in the Information Age.  News spread faster than you can blink.  I can’t believe I still remember the quickest way to know something is watching the evening news or reading the next day’s newspaper, on paper.

I am getting old.

Who got a HP TouchPad? Please touch your pad.

It’s ironic that when HP released the now defunct TouchPad, hardly anyone noticed it, and even less part with their cash to get one.  Now that HP said they don’t want it anymore, all of a sudden, five million people step over each other just to get one.  Do people really think that $99 is good enough a justification for an oversize internet browser (notwithstanding Android being ported)?

The TouchPad has some mixed reviews in the lead up to the release.  I am in the market for a tablet, and the TouchPad hardly make a bleep on my shortlist.  It has no HDMI, no USB and no expandable memory. But then again, the iPad doesn’t have those features either (and that’s why I’m not really keen on it).  On top of that, WebOS is hardly an ecosystem that gets a huge following.  Meego, Symbian are dying left and right, WebOS is heading for the same graveyard, even if HP does not abandon it.

So what makes people want a dying tablet?  Let’s see who actually bought one.

Who bought one?

The first group are those who actually wanted one and bought it at full price.  These are the people who think neither iOS nor the Android (or other OS) is right for them, and think that the WebOS will do much of what they want.  Now that HP decided not to spend another development dollar on the OS (thought they did say they will support it), these people are holding onto a tablet that basically has no future.  However, this group has the luxury of not having to rush off to the fire sale, which the second group of people didn’t have.

The second group are the fire sale customer, who rushed off to pick up a bargain.  So for $99, what do they get?  Android porting aside, the only thing that they are getting is an oversize internet browser, whatever is pre-installed, plus whatever apps they can savage for the WebOS.  These people know the WebOS is no more, and are getting it because it is cheap.  Admittedly, I agree with them.

The third group is just like the second group, except they bought it with the sole purpose of selling it on eBay to make a quick buck.  They don’t care what the thing is, they just know that there are people out there crazy (or stupid) enough to want to get one at an inflated price.  Just do a quick search on eBay and you’ll notice the many listings of the TouchPad that are sold / selling at more than the fire sale price.  There are just some listings that are blindingly obvious that the seller is out for a quick buck.  And then there are people who would get it.

The fourth group of people, and these are the ones I don’t quite understand, are those who actually bought the TouchPad from the third group of people (i.e. buy the tablet at an inflated price).  Why would you want an outdated tablet?  Yes, I understand that it’s still cheaper than buying a proper Honeycomb tablet, but where is the support?  Where are the new apps?  Are they just fuelling the scaplers out there?

The only explanation I can think of is…

The Android promise

So there is already a community of developers who are planning to put Honeycomb on the TouchPad.  There is even a $1500 bounty  on the first group who can do exactly that.

For the techies, that’s good news, because if and when Honeycomb finally arrives, those who bought one will effectively have the cheapest Honeycomb tablet to-date.  So they are basically gambling on that one day Honeycomb will come.

But then what happens when Ice Cream Sandwich (or Jam Donut or Kimchi Chicken) arrives? How long is it going to take before a port to the TouchPad is available?  Or is the TouchPad so versatile that once Honeycomb is on, it’s just as easy to upgrade as, say, a Motorola Xoom or an Acer Iconia?  That’s a question for the long term future, but for now (or at least the short term future) consumer should be able to enjoy the Honeycomb experience if/when it comes.  And if it doesn’t, well, you’ve got yourself a $99 web browser.

Is $99 really that attractive a price for a tablet?

“Hell yeah” is probably the right answer.  The ZTE v9 (which runs on a now seemingly outdated Android 2.1, or 2.2 if you upgrade it) basically flies out the door (though not as quickly as the TouchPad) when it was discounted to $99.  And it has 3G that the TouchPad doesn’t have.  I went to several retailers, and they all sold out.  The only ones that I can find are for the original $275 price tag, or more recently, $129.  Mind you, if Acer or Motorola or Toshiba or RIM or whoever else decided tomorrow that their tablets will start at $99, I will be one of the thousands to grab one.

So yes, the $99 is probably the most attractive price point for a tablet right now.  But let’s not forget that the millions Apple fanboys bought one for $500+ a pop.  So maybe it is something else…

Maybe our brain is wired to think that an 80% discount is too good to miss.  From the $499 price tag drop all the way to $99 is seen as a super bargain, regardless of what the junk it is selling.  In this economic climate, I’m actually quite surprised that people are willing to fork out $99 for an obsolete tech, but not $30 for a T-shirt.

So I’ve got a plan, just build a tablet that can only access the internet and nothing else, and sell it for $500, then discount it to $50 two days later, and people will still queue up to get one.

The gullible people will think $50 is still good value for an internet ready paperweight, even if the internet is not working.

So let’s recap, in the end, regardless of whether it’s being bought at $99 or $999, an obsolete technology ends up in the hands of people who mostly bet on it being Android Honeycomb compatiable in order for it to be useful.  If Honeycomb is not ported (highly unlikely), or if future Android is not ported (more likely than not), then it will become an oversize web browser / media player / organiser / paperweight.

I feel sorry for those who bought it on eBay already.