The Duopolizer: Has HP inadvertently prevented a third major tablet player?
Some may point out that the problem with the TouchPad in the first place was a lack of marketing, which should mean that it is not on the average person's radar enough for them to have even noticed this meltdown. However, this $99 fire sale news has spread widely enough that it might get some attention even from the non-geek crowd.
So, why does this lock down the duopoly? By creating fear in the minds of the average consumer that, if they take a chance on a tablet from a non-established player, they may end up getting the shaft like the TouchPad buyers did and be left with a dead-end product. And who can blame them? Perhaps this fear won't be great enough to prevent Microsoft from entering the modern tablet space since people already believe that Microsoft has been around long enough to be immune to this kind of disaster (assuming they didn't hear the similar tale of what happened to the Kin).
I think any other hopeful contender, though, like Fusion Garage or even RIM, can kiss their chances goodbye. Why take a chance on another potential TouchPad when you can get an iOS or Android device, which both have solid futures? The only way to overcome this fear will be to enter at a remarkably lower price than the established players. Say, like, maybe $99, which is what it took for people to go ahead and finally buy a TouchPad despite its lack of hope for a solid future?
In general, I think this whole debacle has set a bad precedent in people's minds and will make them a lot more cautious about their purchase decisions in the future, which will hurt innovation by limiting viable products to the kind of thing that consumers already see working.
I hope I am wrong, but I fear that we will be talking about the unintended consequences of HP's decisions regarding the Palm unit for years to come. If Microsoft can't manage to become a viable third player in the modern tablet space within another year, any other companies with aspirations to enter this market should find a new hobby for the next three years.
This is just the way the market works -- and it's not necessarily a bad thing. An app developer, hoping to be profitable, does not have to support three or four different platforms -- just two. This means that the developer community will also be less fragmented: more resources to develop better apps. The result is that on any given platform there will be more content choice for the consumer, and a greater community of users.
And besides, the Android platform has proven that just because the base OS is the same, doesn't mean that there is not huge room for innovation by individual hardware manufacturers.
If all "the masses" were waiting for was a good "everything else" tablet, then HP's firesale may have accidentally destroyed pent-up demand in the "everything else" bucket, meaning that Honeycomb may have been killed alongside webOS.
One thought, to wrap up: I think HP may have sold somewhere in the vicinity of 750K-1 million Touchpads, assuming Best Buy and Amazon got similar inventory numbers, and correspondingly fewer the smaller the vendor. That's about one Touchpad per 300 people; alternatively, if you believe that households is the correct cost-conscious denominator to look at, 1% of the households in the US picked up a Touchpad instead of an Android or alternative "everything else" tablet. This is what they're going to use for a year or more now, suppressing demand for an alternative or replacement "everything else" tablet.
I guess we'll find out pretty soon!