CNN’s Julianne Pepitone claims that $99 is apparently the “magic price” for a non-iPad tablet:
HP has even struggled to keep its inventory alert system online. A company representative told CNN that the sudden demand is “kind of bittersweet.”
So, $99 tablets are clearly a winner. But HP’s TouchPads includes almost $300 worth of components, research firm iSuppli estimates. HP only had the freedom to sell its tablets at a staggering loss because it’s throwing in the towel. What about companies looking to stay in the biz?
This new perception of what a tablet without an Apple logo is worth is nothing but bad news for hardware vendors. PC makers like Dell, HP, and Gateway (remember them?) were quick to race to the bottom to make volume sales on Windows computers. Gateway even built out a failed retail chain for their thin-margined PCs. Chasing those thin margins is a whole lot of effort for little profit, even when moving massive amounts of product. After the fire sale of the Touchpad, consumers are saying that non-iPads would have to be priced far below what it costs to make them. As Pepitone points out, the wildcard here is Amazon. It’s heavily rumored that the online retail giant is set to release a low-cost Android based tablet that creates an Apple-like ecosystem hardware, software, and built-in store.