Tablet PC- what’s that premium worth?

53 Comments

Mini_vs_fuji_2I am an unusual Tablet PC user, I know that.  I am totally dependent on taking ink notes in my work and why the Tablet PC is so critical for getting my work done.  In addition to the inking ability the other criteria that is vital to me is mobility and since Tablet PCs usually come in thinner and highly mobile forms they work well for me.  The Fujitsu P1620 I am using now is a highly mobile inking machine and I love it.  It makes my work better and easier and that’s worth a premium to me.  The recent introduction of ultra-portable notebooks like the HP Mini-Note have driven home to me how much a premium I paid for the Fujitsu and it’s got me thinking about that.  The HP Mini I am evaluating is is about the same size and weight as the Fujitsu and with the exception of a much slower processor and the lack of a touch screen is similarly configured.  That means that it’s roughly as mobile as the Fuji so the primary difference in functionality between the HP Mini and the Fujitsu P1620 is the Tablet PC bits.  Those bits are important to me as I mentioned but is it worth a 300% price premium?  Is it worth such a premium for you?  Let’s discuss that so read on.

My work being totally dependent on ink note-taking makes this question more moot for me than for most as i must have that capability.  But I speak to a lot of tablet owners who admit that they primarily use their convertible Tablet PC as a notebook and only rarely go into tablet mode.  Some of them admit they only use the tablet mode on flights where the work room in coach is very cramped and thus they go into tablet mode so they can work with their computer in those tight quarters.  That is not an issue for ultra-portable notebooks like the HP Mini so they likely wouldn’t need tablet mode for that.  These particular users could probably work just as easily without the tablet functionality so price premium becomes a big point for them.

When I was preparing for the review of the HP Mini and comparing the components and size of it with the Fujitsu P1620 the price premium between the two hit me in the face.  The price difference is so large that I admit I was shocked when I started thinking about it.  The Fujitsu cost me three times what the HP Mini with the similar configuration would cost me and that means that the tablet premium is huge in this case.  I am willing to pay a healthy premium for my required ink note-taking but what about most users?  I can’t believe that most would be willing to pay that kind of a premium for the ability to swivel the screen and work in slate mode.  Sure it’s nice but if it’s not really mandatory to get your work done you’re not likely to find it a good deal to pay that much extra for it.  Even I had to do a double-take at a >$1,000 premium and I need the capability. 

Now before you jump all over me I realize that some important components of the Fuji are much better than those of the HP Mini or the Asus EEE PC (9-inch model).  But having used the Mini as a capable mini-notebook computer I would have a hard time convincing myself that the cheaper components make a big enough difference to justify spending a ton of extra money to improve them with a similar device like the Fujitsu.  I realize that the technology to include a touch-screen that swivels around and provide a good inking experience is a premium and I have willingly paid that premium for years.  But for most people I question if that high premium, now that these portable notebooks are coming way down in price, is actually worth it.  If you can do what you do for hundreds less why shouldn’t you?  This topic is very interesting to me and will get even more apropos as these cheap laptops continue to be released and push the envelope.  Tablet premium- worth it or not?

53 Comments

Jelster

I touched on this back in the original HP thread. Sub $500 I might be satisfied with a notebook such as the HP Mini (impulse buy and don’t really need to justify it to the missus) but when reaching $750+ I just feel it is encroaching too much into the traditional laptop market. Sure I wouldn’t get the size premium but I’d probably get a better deal and more options.

What however would swing it for me (and I’ll admit it’s quite personal), is that tablet functionality. I might not need it for inking but other laptop functionalities (list in the other replies) are improved greatly by a touch+swivel screen. I’ll also repeat the usefulness of a tablet in terms of compactness while in use, making it better for reading, browsing or anything that you really don’t need the keyboard for.

Give me a cross between the U810 and HP-Mini and I’ll happily lay down $750-1000. It’s all been done so I do think the premiums are largely there because they know those who are buying tablets will justify the purchase price because they need the functionality.

What I hope is that we’ll see perhaps Dell, Fujitsu or anyone looking to break into the UMPC/Notepad ;) area will use tablet features to differenciate themselves. We’re seeing it already with touch and multi-touch. Now they just need to work on a swivel hinge. :)

Nate

Pam,

I’m not sure where you and I are in disagreement.

My point has been that cost is more important than marketing.

James Kendrick

I understand why the P1620 is so much more expensive but the average Joe won’t. The fact is there is a big premium over these low-cost notebooks coming out now and the average consumer has to do much more soul-searching to decide if they should pay the premium than they used to.

Pam T.

I disagree, Nate. People go in droves for what’s cheap, especially if it meets their needs. If faced with the difference between $750 and $2200, most consumers will forgo the advanced features for the basics.

The average consumer base doesn’t need 3G, Bluetooth, inking, and outdoor viewable screens. The ones who want those features are the educated enthusiasts who try to integrate the technology into everything they do.

Again, it does come down to the requirement the user needs to meet. Every single user is different (dagnabit!) and no one device will completely please everyone. Some hate small screens, others hate 17″ laptops. Some want to write and touch, others don’t.

I’m glad we don’t settle for whatever and have lots to choose from. When the day comes I need to ink every day, I’ll get a device that takes care of that.

Ronliel

main factors that drive up the P1620 costs…

Tablet functionality, Dual Core CPU, 1.8″ HDD, micro-dimm RAM…. to be fair Fujitsu could have used a 2.5″ HDD & SO-DIMM RAM instead (Flybook does).

are those 2 components worth nearly 3x the price? maybe to some, but i doubt to most. the HP can already satisfy 99% of the market. very few people will want or need the tablet bits & extra horsepower.

i think a much more fair comparison is to Fujitsu, Sony, and other laptop makers 10″-11″ line up. they are very similar in size to the HP, use SODIMM RAM, 2.5″ HDD’s, and have no tablet bits. the only cost-worthy difference being the C2D CPU, now is THAT worth 3x the price difference (4x/5x in case of Sony)?

Nate

I’m not suggesting that marketing doesn’t matter. It, obviously, does. But, the product matters more.

Marketing for the Eee Pc is nonexistent. They’re selling like hotcakes.

The marketing for the original Zune was one of the largest marketing campaigns in recent memory. People weren’t fooled.

If there is demand for a product, and it’s priced right, it will sell. Devices like the Eee Pc sell well because people have always wanted a small computer. They just weren’t willing to pay the entry fee.

If the cost of entry was reasonable, I have no doubt that people would buy tablets, regardless of the marketing. As it stands, they could market the living daylights out of tablets, and people still wouldn’t buy them.

James Kendrick

When I talk about mainstream market I’m not talking about the enthusiast market or by what my special needs are. I’m talking about what consumers end up buying and right now that is a cheap laptop that will do everything they need. Not the fastest performance or even the best quality design, rather it is cheap enough to make those factors irrelevant. I also think that calling them netbooks tries to overshadow that these mini-laptops can do everything most users are doing with their desktops. It’s the full ability of these cheap devices that are driving those to purchase them who would never have considered them before because they are so cheap.

Marketing is always important but once these notebooks are in main stream stores people will buy them simply because they know what a laptop is and they see the cheap price. They’ll take a chance on one because they’re not risking very much. That’s why this genre is growing by leaps and bounds and the UMPC market is not by comparison. It’s a risky purchase for the uninitiated.

Tony

Hi Nate,

Though I get your point, I’m not sure I believe it 100%. Maybe I didn’t state my case well enough. If the consumer doesn’t know what available to them, then price doesn’t make a difference. It’s still a marketing AND cost matter. George Foreman grills were not selling just because they were low cost. They sell because of low cost AND the consumer being bombarded by advertisement explaining the functionality. If they were poorly displayed in stores in the far left hand corner of the store without ads they wouldn’t sell either and neither do Tablets. IMHO

Steve 'Chippy' Paine

No, thats not really true James. Mass market consumers never demanded a $399 linux-based 7″ netbook. Netbooks are selling mostly as 2nd PC’s which is one of those luxury ‘wants’ like the 2nd car, 2nd mobile phone and 2nd/3rd TV markets; At this price level, most customers don’t really know what they want. They just see a bargain make up excuses like ‘kids’, ‘holiday’ , ‘backup’
As time goes on, manufacturers will want to push customers back up the chain and in fact, we’re already seeing it. Asus touchscreen, 8.9″ and there are many netbooks planned with 3G and touch already. While the entry point will remain low, most OEMs will provide a spread of features in their devices. A car salesman will probably be able to explain it better than i can!

One possible flaw in the theory is that you’ll end up the quasi-tablets that don’t offer the pro-features that the specialists like yourself require but we must remain optimistic that netbooks could seed a new generation of tablet-aware and mobility aware folks.

Steve.

Nate

Assuming that marketing determines what consumers consume is underestimating the intelligence of the consumer.

Tablets haven’t taken off because they’re over priced for what they are. Nothing more. Nothing less.

Tony

Hi James,

Regarding your comment to Chippy “consumers wants determine the consumer market”. True but only to a degree. Isn’t the market driven by the marketing? For those of us following the Ultra Mobile whatever market, the drive is what we want. But for the general public, the drive is what is being marketed to them. Isn’t that the big reason why Tablets aren’t as successful as they could/should be. The general public don’t know about them and Microsoft is telling them why Tablets are useful.

James Kendrick

Chippy, consumers wants determine the consumer market, not anything else. The mini-laptop genre fits better what most people want, enthusiasts aside. It’s what makes innovation work, meeting demand. :)

Steve 'Chippy' Paine

Good topic. The same applies to umpcs. I wonder what Kevin has to say about his Q1UP. Myself and JKK attacked this topic in a recent podcast and the result was that for nearly everyone without a specific and oft-used specialist scenario, there is no argument. The Eee and 2133 win every time pushing tablets and pro-umpcs further away from the consumer market than ever.
However, dont despair. All netbooks manufacturers will be looking for a USP and to push customers up the product chain so features like touch and swivel screens, smaller, lighter sizes, and more powerful processors could find theit way into the consumer markets via these low cost devices. Netbooks could be the devices that finally seed low cost tablets and umpcs.

Ever optimistic – Chippy

nomo

James’ question touches on the importance of understanding user requirements and assessing the value of various design features. When the P1620 was released I was surprised and somewhat disappointed that Fujitsu introduced very few changes.

It is somewhat misleading, though, to assign all of the differences between the P1620 and HP Mini-Note to one design element. The “Tablet Premium” James describes is due to a variety of features: touch screen, form factor, performance, security, etc. Although some differences may seem minor, the underlying costs can be significant. For example, Fujitsu uses 1.8″ hard disk drives and Micro-DIMM memory to achieve a slightly smaller form factor. These two components alone drive up the price of the P1620 by about $750 for 2GB RAM and 100GB of storage. Another example is the cost difference between the Intel and Via processors.

Products are designed to meet the needs of specific markets. Consider this statement from the P1620 press release: “The highly reliable LifeBook P1620 convertible notebook meets the needs of mobile and field professionals in healthcare, field and sales force automation, and supply chain management who require the flexibility of a tablet for note-taking or navigating through forms-based applications, along with the traditional keyboard input of a notebook computer.” These users probably place more value on a 0.7 lb weight differential, tablet functionality, data security, and even unrelated features like Fujitsu’s IT consulting services. Personally, though, I’m not planning to do any forms-based applications and I could go without the fingerprint sensor and some of the other features on the P1620. It isn’t a bad product; it just doesn’t meet all my needs. The HP Mini-Note doesn’t meet all my needs either.

My target price for a 9″-10″ convertible tablet is $1200-$1800. Tablet functionality on its own is probably worth about $300-$400 to me. In reality, though, any individual feature is worthless if the device as a whole does not meet user requirements sufficiently.

Paul

You need to consider the usage scenarios. The Fujitsu is designed for working on your feet and delivering the functionality, reliability, and quality users need for mission critical environments. If all you need is a word processor, then buy a one. Don’t buy a Ferrari in Manhattan and complain that the car won’t go over 30 mph!

MR1

If the mini-note had been available when I decided to purchase my Fuji P1510 2+ years ago, I would have an HP today.

I love my P1510 but the big price difference would have sealed the deal. I don’t use inking frequently, I do like tablet mode but TPC prices are way out of line today.

borax99 (Alain C.)

The price difference is worth every nickel for me! Hanging on to my ST-5020D and P1610 until (a) someone pries them from my cold dead hands or (b) they fry on their own through old age. Furthermore, my next portable device will once again be a tablet, likely with either an active digitizer or a combo. I like the portability and convenience of the P1610, but – despite the ‘special sauce’ Fujitsu put into their touch driver, there is absolutely no substitute for the speed, responsiveness, and pressure sensitivity of an active digitizer !

Tablet functionality, of all the computer interfaces I have played with since 1980 (there have been a few !) is the closest to the way I work, think and play and I wouldn’t give it up for the world. If that means I’m a “niche” customer and have to pay a premium, that’s unfortunate, but so be it !

Tablets rule !

Tony

Excellent question. It seems that the floor for portability is getting ready to be slammed with this ultra portable form factor. And hopefully some Tablet PC manufacturers and Microsoft will read your post and not so much question if the premium is worth it, but address the issue that the premium as WAY out of line from reality. I’d gladly pay a premium! With how much I use my Q1 and love the tablets bits, it rocks. Now would I have bought my Q1 when it came out if this ultra portable form factor was available AND at that time had NO experience with the Tablet OS? I seriously doubt it. I wanted portability and the Tablet pieces were gravy and I think most of the general public would follow that line. I hope Microsoft do something about this because very soon the Tablets are going to get bumped right off the planet because of the premium difference and the piss poor marketing for Tablets. It’s a death sentence and that would be a shame. IMHO

ArchiMark

James,

I wonder whether a big part of the reason for the ‘Tablet Premium’ has to do with the fact that at least for now, the tablet are a niche product, which means compared to laptops, they are a much lower volume production item. Therefore, they sell for a much higher price.

Put another way, I’ll bet that if Fujitsu, Toshiba, HP, ASUS, etc, ramped up production on a tablet PC model, that costs would come way down and there would be much less of a premium.

Just my 2 cents….

;-)

Mark
Silicone Valley Digerati
Fujitsu U810 TPC(personal)
Fujitsu T4010 TPC (work)
+ Other tablets before….

T Man

Very interesting topic, and it really hit me when seeing the very positive reviews of this device. Running a 2GB Vista Business computer with a 7200 RPM HD and plenty of port and a high quality screen for under $750? Certainly is a phenomenal deal, and it does make the P1620 seem so expensive in comparison (which it is). What it really makes seem expensive is the Fuji U810. I know, different sized screens and all, but that model has a a price premium for some pretty low performance in comparison (processor excluded).

If HP decides to make a tablet version of this, then Fuji will really need to make some pricing adjustments.

Woadan

James, when you consider the fact that slates are at a similar or higher premium, I don’t think you need to say it’s because of the rotating screen on convertibles. It’s simply a premium for having the inking capabilities.

I have to wonder if some of that premium isn’t artificial mark-up myself. Does it really cost 3 times the price just to have that touch screen?

If it is justified, then it’s a real “Wow!” moment.

Woadan

Dave P

Like you, I depend on ink and I have no problem with pure slates (my first tablet was a Motion m1300). I am willing to pay a premium for that and I have, choosing the OQO 02 over many lower priced UMPCs.

I would note that, for me, portability is different than for you. I wanted something that could go in my pocket or (forgive my inner geek) hang on my belt.

For the general market, though, I think you are right. Inking is a different paradigm for computer use and most people don’t gravitate towards it because they’ve always used a keyboard and they have a comfort level with it.

That said, I would see the low price notebooks competing more against the high price notebooks. Except for people who want a desktop replacement, low price notebooks can serve as their only notebook.

I would see the UMPC market becoming even more of a niche with most UMPCs being inkable. The non-inkable UMPCs will lose out to either the smaller MIDs or the more capable low price notebooks.

Eventually, though, as the iTouch generation grows up, I think that inking will come back into the fore. They will be used to working without a real keyboard and will realize the benefits of handwriting recognition versus the virtual keyboard.

gork

At work, I currently have a desktop and a laptop. My next laptop was going to be thinner and lighter than my current one, but I am not so sure now. They recently decided that we can have either or which means I get a laptop only. Could I still go ultra portable?? If I have scads of ram and a decent processor (with 2 cores at least) I would be fine. I have at least a year until I have to decide things.

Travis Carnahan

James,
The other factor you didn’t mention is the ease of surfing the net with a tablet. There is not a better experience than sitting down to keep an eye on my kids and being able to still keep up to speed on my email, do work online, edit documents, and brainstorm (all on a good size screen without having it “standing up” between me and everything I need to see!) I agree (mostly) with Ozone about the TC1100; if Hp had kept it alive, I would have it instead of the new X61 that will be delivered in the next few days!

Big Wes

No wonder Tablet PCs remain a niche product. While the price gap for regular convertible Tablet PCs usually isn’t as large as the premium for the P1620, it’s still disheartening to see the disparity. We got new computers at work last year, and even though I went for about the cheapest option I could—a mid-range Gateway M285—my coworkers got better equipped notebooks for a few hundred less than my machine. A few hundred here and there adds up when you’re purchasing 10 or 20 machines. And when you expand that to large corporate IT—where there are hundreds or even thousands of computers—it’s easy to see why tablet adoption rates are so low except in vertical markets.

Tablet PC manufacturers need to get the price difference closer to just the cost of the digitizer hardware and a slight markup for R&D. Then in order to justify the premium, they need to focus marketing on the real world benefits derived from the tablet functionality. The marketing needs to show users that the tablet functionality solves a problem they have. Early adopters like us will buy something just because it’s new and it’s cool, but it doesn’t work that way with mainstream users. Lenovo/IBM had an eye-catching commercial for the Thinkpad tablets, but it didn’t show any features of the hardware. Gateway tried with the marketing for the Convertible notebooks, but it was simulated content, not real world usage.

Pam T

I think my purchase yesterday of the HP Mini Note is a good example of that premimum. I would much rather have the P1620. Althougth I’m not the note taker James is (thank goodness I don’t have all those meetings), I would like to become more Tablet PC orientated.

But when I seriously weighed whether I would justify the cost of the P1620 by using it in the manner in which it was designed, the answer was no. I write as a second job, and maintain a few websites. For that, I need good keyboarding, not inking. (Although I love marking up manuscripts in ink and sending them back to authors – they always wonder how I did that electronically!)

So, when it came down to crunch time, I looked at the checkbook, studied the specs, and compromised. I wanted the bigger keyboard and bigger hard drive, and gave up a little in the performance arena.

These are the tough decisions.

Loren

James…

I really see your P1620 and my X61T has a different class of machines than the HP Mini.

While I agree that based on your video the Mini was acceptable from a processing power standpoint for email and other lighter load work I suspect that I would truly miss the Core2Duo processing power, battery life, and 7200RPM disk of my Thinkpad tablet.

As for paying a premium price for tablet capabilities, I do hope that these mini-notebooks put continued downward pricing pressure on the entire marketplace. I also hope that vendors will utilize Intel’s ATOM CPU core and chipset platform to create low cost tablet and touch sensitive devices.

I use my tablet in tablet mode all the time, including for presentation work. Using a wireless projector and my tablet make everyone gasp when I walk around room scribbling on the screen and moving things around in OneNote. I also love web surfing in tablet mode.

For my vantagepoint, I am glad there is action and an increasing number of options in the sub $750 portable computer marketplace. But I also appreciate the differences between my machine and what the ASUS and the MINI are. My hope is that as a result of these developments my next full featured and high performance TABLET will cost $1000 – $1200 rather than $1700 – $2000.

Spads

Yes, for me the “tablet premium” your are speaking about worth it.
The tablet pc is a fantastic tool once you tried it one time.

But it is now possible to work with a TPC without spending a lot of money in it : my TPC is not my main work computer, but it is regularly an essential working tool for me.
It is an “old” model, the specs are not “high end” (centrino 1.2Ghz + 1.5Go RAM + 80Go HD), but my TC1100 will never leave my office !

Ozone

James… this is a very interesting topic you started. I’ve often wondered about this myself. I use a tablet, but only for note taking, and not as often as you do it seems. I find a tablet only really useful for the typical “I’m sitting down to a meeting for more than 30 minutes” scenario. Otherwise, if it’s a impromptu get together, I rarely get my computer to start up fast enough to avoid missing those first few crucial moments: back to pen and paper. Still, tablets are generally lighter than other laptops so I continue with them when traveling: like you, I use a Mac when at my desk.

But I’ve gotten into photography lately and when I travel, I can see these mini-format computers coming into their own. I can live without the e-ink if necessary, it’s small, and with the HP, it has a large HD unlike the Asus to store photos on the run (hey, photosontherun!). I was thinking about the P1610 or P1620 because of this very reason, but with the HP coming in at 1/3 of the price, a small tablet for travel where business needs are not critical might just tip the scale for me. Certainly, the HP Mini and the Asus are not much more than a portable media viewer, and are a lot more flexible.

Great topic James!

Mr. Crash

Very good question.

I think for people outside the states – this is even more of an important question.

Here (Australia), I can get an Eee PC for $450 – i’m considering one but am waiting for either the newer HP, the 9″ or the rumored Acer. I actually wanted a P1620 but in Australia they hover around the $4000 mark. This is about $3600 or so US.

Tablets here are virtually non-existent.
While I do like them, I just don’t use them enough to warrant the premium myself.

Just for a bit of perspective too. I showed my non-geek friend who was actually looking for a 2nd laptop (!!) the Eee the other day.

His first words were “That’s S***”… Then a day later I get a phone call from him asking “Where is the place I can get one cheapest?” – he thought about it and linux made sense, smaller footprint and lower system resources used. Most of his applications are online and all his media is on his 160GB ipod. As a companion PC the Eee makes wonderful sense for him.

The tiny laptops are really gaining steam. People are realising they don’t need bohemoth 20KG portable desktops just to get things done. Particularly with periphery devices like mobile phones and portable media devices which take a bit of a load off what the computer is required to do in some circumstances.

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