The Lessons of the iPad and the TouchPad

So HP today discovered what happens when you make an affordable tablet: you sell out.
This is exactly what I preached about the iPad back when it was still a rumor waiting to happen in my negative-leaning editorial: while many pundits were preaching that the gargantuan costs of a single iPad were a “non-life changing amount of money,” I predicted no ultimate mainstreaming of the iPad because it was so highly priced.

In a sense, I was right. Sean P. Aune (Editor-in-Chief of Techno Buffalo, former SiliconANGLE writer and fellow Mashable alum) and I have continually gone round-and-round over the years as to whether the iPad delivered on the promise of all its hype. He says that very clearly the iPad has gone mainstream and delivered the magical rainbows and unicorns that Steve Jobs promised.

I, on the other hand, insist that by all sales estimates, the iPad has failed to make a dent that’s significant enough to call it a truly mainstream mobile device. Certainly, it has failed to single-handedly end-of-line the PC.

In 2010, There Were Only 13.8 Million iPads Sold

Around the beginning of the year, when Quora was still the new hotness, I asked the community for the most accurate sales figures for the iPad (since most pundits and analysts seemed to be at odds with one another on the topic).

Several folks, including Fortune covers editor Philip Elmer-DeWitt, collaborated to come up with the number 13.8 million, which was backed by  sources including Fortune, CNN and Apple Insider.

To compare that to other things we call mainstream, that’s about 1/23rd the number of users Facebook had around that time, and about 2/3rds of the number of Twitter users at the time. Perhaps even more astonishingly, even MySpace had more active users than the iPad in 2010 – by a factor of four!

To be more apples-to-apples, though, the iPad defines itself as a mobile device (that may or may not be a PC-killer). Gartner says that 1.6 billion mobile devices were sold in 2010 (to say nothing of mobile devices still in use sold in prior years), and that the iPad only accounted for .86% of mobile device sales that year.

This coincides precisely with what I predicted in April of 2010, just prior to launch:

But even if they (generously estimated) end up selling two or three million of these things over the next several years, it still has to contend with billions of other smartphone sales and billions of other computers of differing platforms sold.  This isn’t going to be a mainstreamcomputing device for the majority of users.

I’m not sure about you, but in my reality, when a product only accounts for .86% of device sales in its category, that’s not mainstream.

The iPad is Still Important to Watch (there, I said it).

This is not all to diminish the impact that the iPad has had on the mobile, and this and the subhead above are about as close as you’ll get to a retraction of my infamous “Anti-iPad Manifesto.”

The impact of the iPad on the enterprise, which in my opinion has more to do with it’s popularity as a tradeshow give-away than anything else, is undeniable. The “Journey to the Private Cloud,” and the march towards virtualization we see in enterprise can trace its roots back to the birth of the iPad and the smartphone revolution.

Entire IT departments have dedicated themselves to making their workplace computing environments conducive to these types of advanced mobile devices. Most of the technologies we cover at SiliconANGLE (to say nothing of the new pub we launched a month or two ago, ServicesANGLE) are more or less a monument to impact of smartphones and tablets on the enterprise.

And that’s not to say that the impact of the iPad and other tablet PCs have been miniscule on the consumer markets – but one thing is for certain (thanks to what we know as economics 101): the pricepoint of the iPad and most other tablet PCs are a major stumbling block for massive consumer adoption.

In fact, while the iPad and the iPhone began as consumer devices and continue to be marketed as such, when you go to as many vendor trade shows as I do, it becomes plainly obvious that far more practitioners and executives carry iPads (everywhere!) than the rank and file of the rest of the world.

It can’t be because the product doesn’t work as advertised, or doesn’t entertain, or doesn’t offer productivity boosts. If that were the case, you wouldn’t see so many smart and powerful individuals carrying them.

Instead, we have to assume that most people either can’t afford it, or can’t justify spending what is basically an entire rent check on a mobile computing device.

The Sell-out of the TouchPad Further Proves My Point.

Mellisa Tolentino reported here this morning that HP (shockingly) lowered the price of their tablet, the TouchPad to $99:

Hewlett-Packard shook the computer world last week with their announcement to focus more on software–possibly dropping their hardware business, in talks to acquire the software company Autonomous and discontinuing their webOS. If you think they’re done turning your world upside down, be ready for another shake up.

Last Saturday, they lowered the price of their HP TouchPadThe 16GB tablet now only costs $99 while the 32GB costs $149.  The marked down tablets are available at Best Buy, Office Depot, Sears, Staples, and Walmart; though some retailers are still offering them at regular price but are expected to follow suit in the following weeks for the second wave of the TouchPad markdown.  The marked down tablets flew off shelves, which greatly increased the sales of the TouchPad as it was previously not a popular choice for tablet buyers. But the sale is perceived as an act done to sell existing stocks just to get it off the market.

Several SiliconANGLE staffers can vouch for the fact that the TouchPad is flying off the shelves right now.

“I see we just posted about $99 TouchPads,” Art Lindsey told me this morning. “Good luck buying one, man. There just aren’t any; I’ve called every store that supposedly carries them.”

Others I’ve spoken to today say the same things, and according to some reports, TouchPad app developers have seen spikes in downloads of their software as high as 10x what they normally receive.

This is what you happens when you price a mobile device within the “impulse purchase” range, and HP is recognizing that, promising to restock the item, despite announcing it’s end-of-life only days ago, though no more are being manufactured.

One has to wonder if this real-world life-lesson for HP (and anyone else making a tablet) will recognize this and other lessons from the TouchPad.

Lessons like “the public loves an untethered device.” So many of the iPad competitors on the market come pre-tethered to an expensive mobile carrier with a corresponding expensive mobile data plan. Time and time again, the giant mobile carriers, by-and-large, have shown themselves to be concerned with juicing the customers for as much money as possible rather than providing an enjoyable mobile data experience.

The TouchPad was arguably the most successful tablet at exploiting this key differentiator. Just earlier this month, the news was out that the TouchPad brand was “number two in mindshare, behind the iPad.”

“Bottom-line is that the TouchPad has only been around for a month,” argued PreCentral’s Tim Stiffler-Dean. “If you think the game is over now, guess again. We’ve only just begun.”

Stiffler-Dean could still be right (though it would take a truly special miracle to revive the TouchPad). The second most important lesson from all this is that $829 is a life-changing amount of money to most people. I’ve been making this point since 2008. Only Apple can get away with this price-point because they’re the only company in tech with a working reality-distortion filter (and even they can only get it to work to a certain point, as I said earlier).

It’s Too Late for HP. Who’s Going to Get the Point?

The word on the street is that HP EVP Todd Bradley is on his way out. Speculation is that it’s because he’s miffed over the end-of-life of WebOS and his failure to be promoted to the CEO slot over Leo Apotheker, amongst other things.

Bradley was the executive generally credited as being responsible for the Palm acquisition in the first place, and he feels as if he’s not been recognized within the company for his achievements.

“He’s out interviewing for every CEO job he can,” a source familiar with Bradley’s plans told Boy Genius Reports today.

The Scuttlebutt on Bradley is wide and varied. Some circles call him “well-respected,” while others say he’s “a bit on the arrogant side.”

“..[W]e have been told that one of the reasons he hasn’t exited HP yet is due to his personal demands from potential new companies, which are said to be somewhat excessive.”

It’s all rumor and speculation at this point, but one commenter at the original post wondered why he’d be a hot CEO commodity:

Hmmm. This guy contributes to WebOS devices being one big fat failure despite the OSs uniqueness and technical excellence, and now he wants to be a CEO? And we should hire you because…? [sic]

Within a large organization like HP, certainly no one man can be singularly to blame for the failure of a product line as big as WebOS, but his failure to recognize what I view as the two key weaknesses of the iPad are what lead to his pet project’s downfall.

HP certainly isn’t alone in this. Many mobile devices have tried and failed to even hold a candle to the iPad, let alone topple it.

Until those that would dare to dream of their own tablet recognize these problems, Apple will continue to dominate their tiny little corner of the market.

About Mark 'Rizzn' Hopkins

Mark “Rizzn” Hopkins is the Founding Editor of SiliconANGLE, as well as the creator of and Executive Producer for theCUBE. He’s a Bitcoin early adopter, as well as a blogging, podcasting and social media pioneer. Prior the founding of SiliconANGLE, Hopkins worked as Associate Editor at Mashable during its formative years. Prior to his career in startups and media, he worked as a developer for large corporations like Nokia, IBM, Apple and Cox Communications. Hopkins lives in Dallas, Texas with his wife and two children.