HP: We're Doing One Last Production Run of TouchPads

[Camikazi]

[citation][nom]SlickyFats[/nom]Cost to build is $328 for the 32Gb and $316 for the 16Gb.[/citation]
A SINGLE TouchPad costs $328 to make, but they don't make just one, they buy the parts in bulk so I'm pretty sure the actual cost per TouchPad is much lower then that.

 

[spentshells]

[citation][nom]joe nate[/nom]Cost to produce a touchpad is $330 (16gb) and $360 (32gb) each. I don't see why they would do this. The demand was due to the 99/149 price, and they'll only sell at those prices. In business you have to sell your product higher than the cost to make it. unless this allows the to take a different tax break than the loses before I don't see any reason to do this at all.[/citation]
because this is a lie, they are manufactured for a fraction of what you are stating regardless of your sources, nobody would ever give a true estimate of the price to manufature anything or selling it is impossible

 

[legacy7955]

Yeah that price you mention is false.

No way on earth using slave labor and bulk purchased parts that it cost 330$ wholesale, no way!

I still say it is about 100$ TOPS!, I tend to figure it at between $ 60-120 WHOLESALE.

 

[jsc]

From my 300 level Operations and Production Management class years ago, for an "average" product, retail price needs to be about twice the wholesale cost out the factory door for everyone in the supply chain to make money.One thing will change that: a highly demanded product can go for a price premium (Apple, for example) or a lower price with the profits made with sales in quantity.

Anybody here want to bet on Apple losing money with their academic discount program? They aren't. They may not be making much, but they aren't losing money.

 

[legacy7955]

@jsc:

That tells me that HP could make a decent profit at a retail price of about 250$ or so. They have the volume sales that can keep the price lower at retail.

Apple needs to charge much more because they have a pretty small customer base.

 

[tbq]

[citation][nom]joe nate[/nom]Cost to produce a touchpad is $330 (16gb) and $360 (32gb) each. I don't see why they would do this. The demand was due to the 99/149 price, and they'll only sell at those prices. In business you have to sell your product higher than the cost to make it. unless this allows the to take a different tax break than the loses before I don't see any reason to do this at all.[/citation]

Assuming those are the actual costs involved in production, there are a few scenarios where it would make sense to initiate another run of the tablets to sell at $100/150. The first is that they have already purchased the components or are contractually obligated to purchase the components; in which case they're out the money for the tablets whether they make them or not. Second, the actual component costs could be less than the $100/$150 sale prices and the rest of the costs are simply factored in as fixed costs amortized across the production line. Therefore the cost of not producing the tablets could be higher than producing them and selling them at a loss.

 

[back_by_demand]

[citation][nom]Eddieroolz[/nom]Seems like a waste unless HP is actually getting something out of this.[/citation]
Worldwide massive free advertising campaign via tech news websites?

 

[danwat1234]

WHAT!! So after this run, new HP laptops will only have the option for ball-mice or pencil-stick erasers in the keyboard? The touchpad is a very cool mouse device

 

[killerclick]

You guys are dumb for not figuring this out. They want to sell webOS so by selling devices they're enlarging their user base and proving the viability of the platform. Honestly, Tom's Guide should give you an IQ test before they let you post comments.

 

[adaman2576]

I don't understand why they don't keep up production and sell at the $99 price point and make up the difference with app sales. Isn't that what game console companies do is take a loss on the hardware and make money on the games?

 

[bin1127]

They can keep selling them at cost just to kill ipad demand. Two can play the bitch game.

 

[Paul_R]

Post Apple, all other manufs have to sell the first gen of any new h/w iteration below prod costs just so they can get a toe in the market. Cost recouping is done in the long run, via apps and second/third gen price hikes and generalised economies of scale. Toyota did this with the Prius and Microsoft did it with the XBox. It works, but it doesn't make for pretty quarterly reports.

 

[rosen380]

"Isn't that what game console companies do is take a loss on the hardware and make money on the games?"

Not exactly-- When you buy a PS3, it is practically useless without the games. A tablet without extra apps still browses the web, reads emails, stores/plays movies and music, etc. Also, how much are tablet/smartphone apps compared to console games? Has anyone been able to create an app that will sell for $30-60 in the millions?

 

[thaile4ever]

[citation][nom]brickman[/nom]How are they making a profit, unless it cost less than $99 to make. I cant wait till they run out, I keep itching to buy one, but Im not sure if it is a good investment for $99.[/citation]

Well here's the thing. Unlike other tablet makers that are using Android they are using their own WebOS.

If they can get enough people using their WebOS and developing Apps for it, then they can turn around and sell their OS to other Companies to use and make money that way.

 

[thaile4ever]

and/ or make money from Selling Apps