TouchPad is no slam-dunk for HPJune 30, 2011: 12:31 PM ET
Hewlett-Packard's new tablet may offer competition for Android, but it can't compete with Apple's iPad on any level.
FORTUNE -- Starting Friday, there will be yet another tablet on the market—the TouchPad from Hewlett-Packard (HPQ). The new gadget is the hardware maker's attempt at taking on Apple's (AAPL) iPad and one of the first in a long line of upcoming WebOS devices.
But while the TouchPad's WebOS operating system—which HP inherited from its acquisition of Palm back in 2010—is sleek and even does a few things better than the iPad, it's unlikely to be a slam-dunk for HP. Why? Consumers don't necessarily want tablets—they want iPads.
HP can't compete with Apple on coolness (even by getting Russell Brand to endorse the TouchPad). And it isn't competing with Apple on price (like the iPad 2, the TouchPad starts at $500). It also can't compete with Apple's extensive App Store—at launch, the TouchPad's App Catalog will offer just 300 applications. iPad users, meanwhile, have access to over 100,000 apps.
Despite Apple's notorious micromanagement of its third-party apps, developers have flocked to create games, productivity tools and other applications for iOS phones and tablets. Lately, they've also raced to develop apps for Google's (GOOG) Android-running devices. That's because developers want to develop for platforms that consumers want to use. With over 25 million iPads sold to date, creating apps for Apple's tablet has its obvious advantages—a huge and growing audience ready to download those tiny, colorful icons onto their touchscreen device. HP says the number of apps available on the TouchPad is "continuing to change daily."
At a recent meeting with company executives, they also stressed that the tablet's App Catalog is about quality, not just quantity. To that end, HP is launching Pivot, which it calls "an entertaining and informative editorial resource for discovering webOS applications for the HP TouchPad." In other words, it's sort of like a digital magazine that highlights certain apps for users. As the number of applications in Apple's App Store and the Android Market grows, finding the right one can be tricky.
According to a recent report from technology research firm Canalys, these large app inventories can present overwhelming choices for consumers. "A consumer searching for a weather app in the Android Market, for example, will find numerous possibilities, many of which have not yet received any user ratings or reviews," say the report's authors. Of course, people do want to find the apps they're looking for.
While HP's TouchPad will offer some popular applications like Facebook and Kindle, it's lacking many others. Of course, there are some die-hard Palm fans (yes, I'm talking about you former Treo addicts out there) who have been itching for Palm's comeback and might be willing to shell out $500 for a TouchPad instead of an iPad, despite its lack of applications. And while reviews of the TouchPad are a mixed bag, many in the tech media have showered praises on WebOS, the operating system that powers it.
WebOS does do a lot of things right. For starters, it's better at multitasking than the iPad, and allows users to keep multiple applications open at the same time. It also has a feature called Synergy, which consolidates data from multiple contacts lists—like Facebook and Skype—into one master address book (it also consolidates different versions of online calendars and photos from various sharing services).
But will that be enough to lure significant numbers of consumers and developers to the TouchPad? Doubtful. HP is late to the tablet game, and the mass market doesn't necessarily care about new operating system features, it cares about what's cool. Despite the proliferation of other devices, Apple still owns the tablet market.
But HP has big plans for WebOS that reach far beyond the tablet market. That's why it shelled out $1.2 billion for Palm, creator of WebOS, last year. HP has already said WebOS will run on multiple devices—from printers to PCs. So while the TouchPad isn't a slam-dunk for the company, WebOS might still end up being a formidable competitor to Apple's iOS and Google's Android.