HP Exits Low-End Tablet Market To Focus on Profitability
Tech giant HP is exiting the low-price tablet market. In fact, the company has already put the kibosh on low-end Android tablets. You can no longer find many of them on HP’s Web site.
Although HP is still selling the HP 7 G2 tablet (pictured) for $99 and the HP 8 G2 tablet for $149, neither model is currently in stock. It seems likely that these items have been discontinued, though you can still find them via some e-commerce sites like NextWarehouse.com and Buya.com at deep discounts.
"We are going to focus where there is profitability and growth and will not chase the low-end tablet market,” Ron Coughlin, president for personal systems at HP, said in a statement. “We are focusing on business mobility to deliver tablets built for field service, education, retail and healthcare.”
Cutting the Fat
Low-cost tablets seem to be a dime a dozen, especially low-cost Android-powered tablets. One of the most popular is Amazon’s Fire tablet. The seven-inch model runs just $49.99. Asus, Lenovo and Acer are also competing in this end of the tablet market.
But HP is not getting out of the tablet business altogether. The company is still selling the Envy 8 Note tablet running Windows 10 for $329.99, for example. But there is a clear preference for Windows over Android in its remaining stock.
We caught up with Roger Entner, principal analyst at Endpoint Technologies Associates, to get his thoughts on HP’s withdrawal from the low end of the tablet market. He told us the tablet market is under assault.
“Even Apple, after creating the market, is having a hard time making a go of tablets,” Entner said. “Clearly HP [Inc.] has to right the ship, now that it's spun out and on its own. Trimming unprofitable lines in declining segments seems like as good a place as any to start.”
On November 1, Hewlett-Packard officially split into two companies. Hewlett Packard Enterprise offers technology solutions aimed at helping enterprises optimize IT and build cloud and mobile solutions. This new brand includes HP’s enterprise group, enterprise services, software and financial services businesses.
The new HP targets the consumer end of the business, operating HP's printing and personal systems businesses. HP focuses on new innovations like multi-function printing, Ink in the Office, graphics, commercial mobility, and services.
Tablet Market Declining
Like the PC market, the tablet market is also posting losses. Market research firm IDC has said that tablet shipments, including 2-in-1 devices, are expected to decline 8 percent in 2015. That’s a significant slowdown from IDC’s previous 3.8 percent prediction. The firm predicts shipments will reach 212 million, most of which are pure slate tablets.
"In the past, the biggest challenges with 2-in-1 devices were high price points, less than appealing designs, and, quite frankly, lack of demand for Windows 8, which was the OS most devices were running," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker, in a statement.
"With more OEMs offering devices in this segment, prices have started to come down significantly. We estimate that over 40 different vendors shipped 2-in-1 products in the second quarter of 2015, which is up from just 14 vendors two years ago," Reith said. "With the launch of Windows 10, the introduction of more Android-based products, and the possibility that Apple will unveil a larger, screen-detachable iPad, this is the space to watch."