Hewlett-Packard has announced it is permanently dropping the price of its WebOS-powered TouchPads by $100, prompting a round of hand-wringing over a looming price war in the tablet space.
But one vendor does not a price war make. While it’s true that some vendors have varied pricing by a slim amount here and there, the tablet market share leader, Apple, is not likely to follow any time soon.
During its most recent quarter, Apple reported selling 9.25 million iPads. That marked a 183-percent increase over the year-earlier quarter and the Cupertino, Calif.-based technology maker didn’t drop pricing by as much as a penny. Not only that, but during the past year Apple has seen competitors, like Motorola with its Xoom, launch Android-based tablets and cut pricing post-launch, only to see those competitors continue to struggle while Apple moved on to triple-digit growth in tablets.
That’s not to say Apple doesn’t have its worries. Its legal action in Europe against Samsung takes place against a backdrop where Samsung’s Galaxy Tab 10.1 has hit the market with exceedingly great quality, price-parity with iPad 2 and a solution provider channel that is gearing up to make tablets a significant part of its IT strategy for business.
And the segment of the market that will buy tablets on price may become very similar to the segment that bought netbooks: broad, excited…and short-lived.
Even though reviews and market response may have been lukewarm to the TouchPad, HP’s tablet still provides nice differentiation with its printing support which, given its unwavering market share lead in printing and imaging, means it may be targeting the wrong part of the market with an aggressive pricing move. HP’s printer channels have had staying power, and have been willing to make long-term investments in technology. One wonders why HP isn’t taking a more aggressive tack in packaging TouchPads with its printer lineup. HP doesn’t have to fight Apple, and it doesn’t need to fight on price. Neither one of those activities are things HP does best. But HP is still in a class by itself in P&I solutions.
HP shouldn’t count on Apple meeting it on a price-war battlefield any time in the near future. And Android-tablet pricing may wax and wane, but a price war here would likely come at the expense of innovation for those who engage, and that risks giving Apple even greater leadership in the tablet market.
Don't count on an all-out price war, in other words.
But that doesn’t mean HP can’t come out on a winning end with the TouchPad if it starts fighting the right battles.