After Hewlett-Packard lowered the price of its TouchPad by 20 percent, a new report says cheaper devices with fewer features are fueling a surge in the tablet 
market.
"De-featured, low-cost media tablets are being introduced by more than 50 vendors in 2011," said ABI Research mobile -devices group director Jeff Orr. "This will certainly help bolster year-over-year growth for the category, but it also creates a negative perception in the minds of the mass consumer audience about the readiness of media tablets to be fully functional within the next several years. Good user experiences and product response are needed to propel this market beyond the 'early adopter' stage."
ABI's study said worldwide annual tablet shipments are expected to top 120 million in 2015. While that growth is slower than the PC and smartphone markets, "media tablets are emerging from the shadow of non-handset mobile devices and rapidly coming into their own," the company said. It noted that Android-based tablets have collectively taken 20 percent of the market from Apple's market-leading iPad in the last 12 months.
Prices Dropping Fast
The 16GB Wi-Fi -equipped TouchPad, which has a 9.7-inch display and a one-gigahertz processor and runs the webOS operating system, is now $399, and the 32GB version is $499, making them $100 cheaper than similarly equipped iPads. The price drop was initially announced as a promotion, but became permanent on Wednesday.
Other iPad rivals have also cut their prices. Samsung lowered the Galaxy Tab price earlier this year from $599 to $499, and carriers Verizon Wireless and Sprint Nextel sell the Tab for $299 with a two-year data plan. Motorola also cut the price of its Xoom Wi-Fi-only tablet to $499.
Research In Motion's BlackBerry PlayBook tablet starts at $499. Competing with the TouchPad at the $399 price are the ASUS Eee Pad Transformer and the Acer Iconia A500.
In a statement reported by the Associated Press, Stephen DiFranco, a senior vice president of HP'S computer business division, said the TouchPad price cut is intended to allow "both HP and our channel partners to be even more price competitive in the marketplace, bringing the cheapest model down to $400."
Smart Move
With all the momentum of the iPad, which launched the tablet computer market early last year, it seems difficult enough for competitors to make a dent even without the obstacle of a high price.
"HP is making the right move by lowering the price of its TouchPad media tablet sooner rather than later," said Orr. "While the company does not want to be known for a failed first attempt, it needs to find the right combination of features, function and cost that drives consumer attention to its webOS platform."
He added that vendors have had "a tough time differentiating from the hardware and software solution offered by Apple's iPad 2, but it's no longer a one-horse race."
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