[nradov]

Not crazy at all. The rule in hardware is price it to sell, regardless of profit margins or lack thereof. Then — if you get sales traction — figure out how to drive your costs down through economies of scale, substitution of cheaper components, design simplification, etc.

[MatthewPhillips]

You have to have very deep pockets, and the ability to pacify your shareholders, to absorb these types of losses. I think people are really underestimating how much HP has lost here.

[nkassis]

Microsoft did it back in the day with the Xbox but I don't think it's a good strategy to use against a 70b in cash company who can match your prices to kill you. With that said if you did drive down the price for everyone Apple would be in trouble (so would everyone else but less due to their diversification). Imagine if we expect 300 tablets. That would be hard for a Apple to keep going on for a while, they managed to keep high prices with laptops and desktops but not on the scale of the iPad/iPhone etc.

[tomjen3]

Thing is, Apple has a lot of money now but MS can run deficits in the tablet business essentially forever. So can Google.

Half of Apples income is tablets. They can run for some time, but not forever.