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Hewlett-Packard Cuts TouchPad Prices to Compete With Apple

HP to Make Final Run of TouchPads to Meet Flare-Up in Demand
After announcing plans to stop making WebOS products, including the TouchPad and a line of smartphones, Hewlett-Packard cut the tablet’s price to $99, down from $499 originally. Photographer: Noah Berger/Bloomberg

Hewlett-Packard Co. has cut prices of TouchPad tablet computers by $100 one month after introducing the product, a move that may help the company compete with Apple Inc.’s market-leading iPad.

TouchPads cost $399.99 for a 16-gigabyte model and $499.99 for a 32-gigabyte version, according to Hewlett-Packard’s website. The Palo Alto, California-based company said in a June 9 statement it would charge $499.99 for 16 gigabytes and $599.99 for 32 gigabytes.

Hewlett-Packard in July introduced the TouchPad into a market dominated by the iPad, which generated $6 billion in sales in the most recent quarter. Price reductions make the TouchPad $100 less expensive than comparable iPad 2 models, which may help the HP tablets draw customers from Apple, said Brian Marshall, an analyst at Gleacher & Co.

“Lowering prices is a decent way to stimulate demand,” said Marshall, who is based in San Francisco and has a $50 price target for Hewlett-Packard shares. Hewlett-Packard should have priced the TouchPad below the iPad when it introduced the tablet last month, Marshall said. “To have a product that’s new to the market come out at the same level as the iPad offerings doesn’t make much sense.”

Hewlett-Packard’s shares gained $1.27, or 4.1 percent, to $32.32 at 4 p.m. on the New York Stock Exchange. The stock has dropped 23 percent this year.

Hewlett-Packard said in an e-mailed statement that it “continually evaluates pricing for its products and is pleased to permanently extend its back-to-school promotion on the HP TouchPad.”

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