Retroactive Genius of Apple's Plan

I would have loved to buy a TouchPad had they not sold out so fast. For $99, why not!

Check out this comment on TechCrunch:

Holy crap - I'm just thinking about how cool these might be for our classroom. At $100, these would actually be pretty nifty. We could put pdf files on them to read, have students connect to the internet... hmmmm.
This is just the first of a million uses when something is that cheap.
Which leads to looking at the retroactive genius of Apple. The process was pretty straightforward:
  1. Design an unbelievably cool, ground-breaking device (iPhone)
  2. Get someone else (carriers) to subsidize it so that it's within the realm of hipster purchasing
  3. Build a huge dev community building great apps for it
  4. Expand the target audience for those devs by releasing a larger device, of largely the same innards that have now been reduced in cost due to volume
  5. Win!

This is where the HP TouchPad failed - because it was/is new, they needed to seed the market - hugely! Apple spent $486M on advertising in 2009, let's say, for the sake of argument, that number has now increased to $1.5B (an increase of 3x, which is not a stretch considering their earnings per share have 4x in that time). If they're spending 25% of that on the iPad (a new product that makes up around 20% of their business), that means they're spending ~$350M on iPad advertising. How, exactly, did HP think they were going to compete with anything less?

HP is supposed to lose between $100M and $400M on the TouchPad price cuts. But at the end of this weekend, with everything seemingly everywhere, sold out, that means that they have 2M TouchPads in the hands of consumers - that actually seems like a very effective marketing campaign, considering they're over 18 months late to the party. If it ran netflix and let me stream video, that would be a home run.