HP Touchpad Sale Success: Has an iPad Competition Formula Been Created?

 @ibtimes
on September 05 2011 10:08 AM
HP TouchPad
HP TouchPad HP

Apple's domination in the tablet industry has been pretty much unchallenged for the duration of the iPad's life.

The company has at least 80 percent market share in the industry according to recent numbers from ABI Research. Other research firms have it at even higher numbers. Research firm iSuppli says Apple will dominate the industry for the foreseeable future with its share will at least 60 percent in 2014.

Tablet competitors like the Motorola Xoom, Samsung Galaxy Tab and the RIM Playbook have come onto the scene and haven't fared well. It's been iPad or nothing. 

However, recently Hewlett-Packard's Touchpad gave hope to all competitors when it sold out quickly after the price was slashed to $99. The tablet was originally priced at $499. It was then cut to $399 and eventually $99 after HP said it was ending all webOS devices.

The success of HP's Touchpad doesn't mean a thing for the company. It will still cease manufacturing of all webOS devices and turn the focus of its business to enterprise software. That being said, some analysts say it may have opened the door for a possible iPad competitor. Analysts say marketing low-cost tablet might be able to gain a company an audience for a crowd that thinks the iPad is too rich for their blood.

In a blog post, Forrester analyst Sarah Rotman Epps makes the case for Amazon.com saying the company has the right ingredients to make a run at a lower price.

Even though Amazon taking on Apple is a bit like David taking on Goliath (compare the market cap, profits, and cash position of the two companies), Amazon's willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market, Rotman Epps said.

Rotman Epps said Amazon.com's tablet device could sell 3 million and 5 million units in the fourth quarter alone. This would give it more sales than all other tablets not named the iPad and be an impressive feat. While Rodman & Renshaw analyst Ashok Kumar said Apple will have likely sold 11 million iPads this past quarter alone, every other tablet has barely managed to sell one million tablets overall.

Amazon is reportedly going to release an Android tablet for the price of $299 in October. While it's not $99, it's still $200 cheaper than the iPad 2. Bob O'Donnell, an analyst at IDC, agrees with Rotman Epps' take and says Amazon is the best company to bet on in this space to compete with Apple.

Amazon has an ecosystem like Apple, with its own app store that offers music, movies and videos, and a bookstore. Not only would you get a cheaper device [than the iPad], you would get the integrated Amazon experience. That's what makes Amazon's tablet the most interesting -- and it's where other (Android) tablets will be challenged, O'Donnell said to Computerworld.

Lenovo has already attempted to cut into the iPad share through this strategy. The company recently introduced the IdeaPad Tablet A1, which runs on Android 2.3 (Gingerbread) and costs a mere $199 for an 8GB device.

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