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Summary:

Following a temporary $100 price cut on its TouchPad tablets last weekend, HP today made the reduced list price permanent. While this surely cuts into the margin for HP’s TouchPad, the company can afford a short-term profit gap in order to spur sales and attract developers.

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Following a temporary $100 price cut on its TouchPad tablets last weekend, HP today made the reduced list price permanent. Effective today, the 16 GB TouchPad with Wi-Fi is $399, while the 32 GB edition is $499. In a statement, Stephen DiFranco, HP’s SVP and General Manager of the Personal Systems Group, said the company was “pleased with customer response” that last weekend’s temporary reductions brought, indicating an uptick in HP TouchPad sales.

It’s important to remember that this is the list price of HP’s tablet; third-party resellers can discount them, so it’s possible consumers will see TouchPads priced even lower. In order to keep up with what HP is doing for work purposes, I took advantage of last week’s one-day special on Woot.com and ordered a 16 GB TouchPad for $379, for example. And as I noted that same day, discounted TouchPad tablets don’t necessarily mean disaster for HP. The company only just entered the tablet market, which is still in its early growth stage. Based on the bill of materials, HP can still make a profit on these tablets, although not much of one.

That’s an acceptable risk or loss however, because it’s not profit that HP needs to generate with the TouchPad right now: It’s sales. The more TouchPads sold, the more attractive the platform can appear to third-party developers which could strengthen the overall webOS ecosystem. These two TouchPads are only the beginning for HP, which has said it will soon follow up with other models using slightly faster processors and integrated mobile broadband radios. But apps are the real missing piece for potential TouchPad buyers and developers won’t build apps for a platform that isn’t growing tablet sales.

Then again, if the number of tablet injunctions continues to rise and include HP’s TouchPad — and I suspect that will happen — the price cuts could be a moot point, even though I think a cheaper TouchPad is the best potential challenger to Apple’s iPad.

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  1. “These two TouchPads are only the beginning for HP, which has said it will soon follow up with other models using slightly faster processors and integrated mobile broadband radios.”

    A 7″ version would tempt me………….?

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