TouchPad’s Weekend Blowout Sale: Make It Permanent?

Shoppers for HP’s TouchPad tablet were treated to a special bargain over the weekend — after coupons and promotions, the 16 GB tablet was available for US$299, a $200 drop from its original price.

The price cut came relatively early in the device’s life on the market.The TouchPad debuted in June to a largely chilly response. Many first users liked the virtual keyboard, multitasking capabilities and webOS operating system, but they felt the design was cumbersome. The most common complaint was the lack of apps.

Like every tablet, the TouchPad faces the burden of being constantly compared to the iPad, especially because the two products start at identical price points. HP’s bargain on the TouchPad was only available for the weekend, but it could be an indication that prices will need to be kept lower in order to stay competitive.

HP did not respond to the E-Commerce Times’ request for comment by press time.

Marketing Strategy

It’s not uncommon for prices to fluctuate greatly among PCs, or for companies to offer short-term deals in order to get consumers talking about a product.

“In PCs, pricing is typically discounted fairly often. Apple is an exception in the way they have a stranglehold on keeping the price constant,” Richard Kugele, analyst at Needham & Company, told the E-Commerce Times.

With the TouchPad, though, the product may suffer without a consistent lower price. Many customers likely would choose the iPad over the TouchPad if the two were the same cost.

“Consumers buy iPads not only because they are extremely powerful, elegant gadgets with tens of thousands of apps, but also because they are Apple devices, with all the cachet thereby implied. Coming in with higher specs but at the same price and no apps is a recipe for no share, in our view. The stakes here are high,” Kugele wrote in a note.

Keeping the price more affordable is alluring not only to customers, but also to the developers HP is hoping to draw to the platform to improve its webOS app selection.

“With the network effect of more users attracting more developers attracting more users, we believe it’s appropriate, or even necessary, for HP to use price to drive adoption,” Jayson Noland, director and senior analyst at Robert W. Baird, told the E-Commerce Times.

Stakes High for WebOS

HP also needs the TouchPad to stay competitive in the tablet market to continue to develop a consumer base for its newly acquired webOS platform.

The promotion was all about building new relations though webOS, according to a tweet from Stephen Dewitt, head of the business unit for webOS at HP.

The company needs to get tablets in customers’ hands in order to introduce the platform and to help it attract popularity and developers. Users have been receptive to the platform so far, so the lower price is key to developing the base further.

“We like webOS and believe the market would welcome a portfolio of solid, low-cost tablets as an alternative to the iPad,” said Noland.