HP Takes $100 Off The Price Of The TouchPad, Is That Enough?

HP TouchPad

One of the problems with the launch of various Android tablets earlier this year–and there were many–was that the devices had no real way of standing out against the iPad, which had been on the market for a year. HP (NYSE: HPQ) seems determined not to make the same mistake, in that if it can’t beat the iPad on features, then it’s going to try pricing.

The TouchPad has been out in the wild for a little over a month, and it’s pretty clear that it’s not selling like hotcakes. In response, HP dropped the price this weekend by $100 through an instant rebate, bringing the cost of the 16GB TouchPad down to $399 and the 32GB model down to $499. It’s also available on the discount site Woot.com for $379.

HP said on its Web site that the deal would only be available Friday through Sunday, but you have to wonder if it will keep the price at that level should demand pick up. HP is also getting ready to introduce a slightly faster version of the TouchPad for AT&T’s network but hasn’t revealed the price for that model.

One huge advantage HP has over tablet competitors like Motorola (NYSE: MMI) is that consumer devices are a relatively small portion of its overall profits, meaning it can absorb smaller margins for a while to see if the product has legs. But one huge advantage Apple (NSDQ: AAPL) has over everyone else is even better margins, which could allow it to match competitor pricing without too much of a hit to the bottom line. A $49 iPhone 3GS has been very attractive this year, and if Apple has a new iPad in the works for later this year (as some have rumored) a cheaper iPad 2 is a definite possibility.

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