Can $100 Buy a Hit on Apple?

Early adopters have never felt this stupid.

Hewlett-Packard's (NYS: HPQ) TouchPad -- the tech giant's bold attempt at monetizing its $1 billion Palm acquisition by putting out a webOS-flavored tablet -- hit the market last month at $499 for the entry-level 16-gig model.

All you need now is a cool $399 to kick the funky stylings of the market's first webOS tablet. The 32-gigabyte unit is also receiving a $100 haircut to retail for $499.

Let's not confuse this with this past weekend's promotional sale across several sites and retail partners that dropped the TouchPad's price to as little as $385. That was temporary. This is the real deal. This is a permanent price cut -- well, at least until the next price cut comes around.

Why would HP do this? Why did it introduce a gutsy tablet last month at the exact same price point as Apple's (NAS: AAPL) entry-level iPad? Just as the manufacturers that have struggled with their Android-fueled tablets, it's hard to stand out on specs when your tablet doesn't have access to Apple's iconic App Store. If HP had hit the market at $399 last month, instead of simply upsetting its first five weeks of buyers at a higher price point, it would have been able to draw a bigger crowd than this week's quiet price cut.

Tablet makers outside of Cupertino have been too cocky. Did Motorola Mobility (NYS: MMI) really think it could move Xoom gadgetry for as much as $800 a pop when it was introduced earlier this year? Despite being the first tablet running Google's (NAS: GOOG) tablet-centric Honeycomb update for Android -- and with a killer spec sheet to boot -- the Xoom failed to dent the market. Motorola succumbed to a $200 price cut last month.

These price cuts don't make headlines because they come long after tech geeks have moved on to something else.

Remember Logitech's (NAS: LOGI) Google TV Revue? The gadget that turns dumb TVs into smart ones hit the market nearly a year ago at $299. There were some Google-related stumbles in getting studios to embrace the platform, but did you know that Logitech's Revue boxes are now readily available for $99? You probably don't know this, because nobody cares once a product stumbles. Applying this same logic to tablets, why are so many companies kidding themselves with price points that they will slash in a matter of months if not weeks?

The TouchPad at $399 is unlikely to make a difference now. The only upcoming tablet that has a shot at being a worthy iPad challenger will be's (NAS: AMZN) inevitable release.

When you do come, Amazon -- make sure you price your tablet aggressively from the start. There's no point in repeating everyone else's mistakes when you can simply learn from them instead. 

Will you be buying an Amazon tablet or a $399 TouchPad? Share your thoughts in the comment box below.

At the time this article was published The Motley Fool owns shares of Google, Logitech International, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Google, Logitech International, and Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a written covered call position in Logitech International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He does not own shares in any of the companies in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.

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