I want to believe you - it seems logical. But everything in front of me suggests they do not know how to price things! If you disagree with me, that's okay. But I have to believe they could have sold every single unit today for $200 to $250 per unit. Instead, this "company that has made thousands of products since 1939" dumped them all for $99 to $149. I don't know how many units were purchased today, but I can assume it was in the 100's of thousands - it was EVERYTHING that was available and I couldn't get my hands on one quickly enough. Clearly, they could have sold them for a higher price - how high? I don't know. But my strategy would have been to discount by 30%, then 40%, then 50% until everything was gone. I must be missing something. Too simple!

That's a different discussion. You're talking about how they should have dumped their inventory, the grandparent was talking about how they should have priced the product from the start.

My take is that they set the price so low as to clear inventory quickly. I'm sure the deals they had with retailers made a prolonged sell-off at incrementally decreasing prices undesirable.

actually, I think the price $99 is quite fair. Compared to having all the tablets returned and don't know what to do with them, HP now created a super hot products with 2-digit price that everyone wants to grab one, or two, or twelve. Things wouldn't happen this way if the price was $200. True that HP didn't earn that much money back but as a big corporation, HP could afford that and earned something beyond money. Let's keep an eye on this matter to see what happens in the end.

Or that if they wanted to make inroads in the market, they were going to have to make the first one as a loss leader to make inroads on the market.

And if anyone is going to make inroads against the iPad, that's likely what they will have to do. Nobody is going to get the economy of scale that the iPad does with their first product, and nobody is going to have superior features at a similar price point, so the only way to make inroads is going to be the loss leader and making money off of a similar app store. (the playstation model)

How much loss can any company take? The more successful your loss leader, the higher the losses. If you sell 10 million tablets at $100 loss per tablet that's a billion dollar loss. And I'm not sure selling 10 million would even be enough of an inroad. And I'm not sure that selling them at $100 per tablet loss would make them cheap enough to sell at that quantity. It's a very delicate situation.

> And I'm not sure selling 10 million would even be enough of an inroad.

Elsewhere in this thread, earl claims that around 25 million iPads (both generations) have been sold. So selling 10 million tablets would be a pretty huge inroad.