HP to produce one final run of TouchPads to meet ‘unfulfilled demand’

“HP has plans to produce another round of its TouchPad tablets before the year is out, despite its earlier decision to discontinue its mobile hardware products,” Mike Isaac reports for Wired. “‘Despite announcing an end to manufacturing webOS hardware, we have decided to produce one last run of TouchPads to meet unfulfilled demand,’ HP spokesman Mark Budgell wrote in a company blog post. ‘As we know more about how, when, and where TouchPads will be available, we will communicate that here and through e-mail to those who requested notification.'”

“Budgell says it will be a few weeks before devices from the additional run will be available for purchase,” Isaac reports. “The blog post signals further confusion from a company in upheaval.”

“Two weeks ago, HP announced suddenly it would end production on all of its mobile hardware, including the soon to be released Pre 3 and Veer smartphones. The decision also included the company’s iPad competitor, the TouchPad, killed off a mere 49 days after its debut in July. Circulating rumors suggested third-party retailers were sitting on hundreds of thousands of unsold stock,” Isaac reports. “HP followed its announcement by slashing prices on remaining TouchPad inventory, reducing the price of the 16-gigabyte TouchPad to $100, and the 32-gig version to $150.”

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Isaac reports, “There’s no guarantee, however, that HP will continue to sell the last round of tablets at a $100 rate. Hardware teardown web site iSupply speculates that, in terms of components alone, a 16-GB TouchPad costs HP approximately $300 to build. That’s a $200 bath HP is taking on each individual unit sold, not including the cost of labor, shipping and associated expenses.”

Read more in the full article here.

MacDailyNews Take: Hey, yeah, let’s ramp up another run and either lose hundreds of dollars per unit or fill up warehouses again with unsold fake iPads! There’s some real genius business acumen over there in OPIPL (Overpriced Printer Ink Peddler Land). By comparison, Apotheker has achieved the impossible: Making Ballmer look like a competent CEO.

 

[Thanks to MacDailyNews Readers “Fred Mertz” and “Terry O.” for the heads up.]

38 Comments

  1. They couldn’t meet “unfulfilled demand” with their product, because consumers are demanding quality products. They will have the same results if this additional run is producing the same craplets they made last time.

  2. This may be an attempt to clear out the inventory of already sourced parts, in which case it would not make sense to sell below cost, so I think we can forget about them being sold for below $100.

    However this is extremely bad news for any other company that is considering launching a rival to iPad. HP is burning the ground from beneath everybody else, but with no potential for gaining anything themselves.

  3. There hasn’t been such a fire sale since General Sherman burned Atlanta.

    But you are right HP has single handedly gutted the Android tablet market. What fool would pay $300 to over $600 for an Android when they can pick up an much better HP and install Android on it?

    Apple even quietly adjusted their low end price by $100 to a new low of $299 for the read deal iPad on their refurbished generation one web site.

    For those planing to waste their money on an HP I recommend they add a couple of bills and get the real deal iPad now with a half million apps.

    1. >For those planing to waste their money on an HP I recommend they add a couple of bills and get the real deal iPad now with a half million apps.

      I think you misunderstand a lot of the reasons people are buying the TouchPad. For a lot of people, it’s not because they want an iPad but are too cheap, it’s because even if you don’t end up using it that much, or hell, just want to use it as a photo frame, $99 isn’t a big deal, whereas $300 is. My boss already has an iPad 2 (and loves it), and he bought one just to let his kids play with because it’s not a big deal if they fuck it up, whereas he’s afraid to let them near his iPad 2.

  4. This move has nothing to do with demand (or lack there of). HP had already asked their component suppliers to produce X amount of inventory. Inventory they meet. Now HP doesn’t want to build the pads and doesn’t want to buy the inventory but their component suppliers aren’t letting them renege on their contracts. So HP decides they might as well make them, they have to buy the parts anyway.

    1. Good point! If HP already has to buy the components because of preexisting deals, then the true (opportunity) cost of producing a TouchPad is near $0 (other than shipping costs, etc.). So a sale at $100 is actually profitable for the company.

      1. Nonsense, it still costs money to assemble, package, and ship them. Probably more than the $99 in revenue.

        But that’s fine… For every tablet except Apple’s iPad, the consumer expectation will be going forward, if it’s released at $499 (or whatever price), just wait a few weeks and it will be $100 less. Wait a few more weeks and it will be on sale for $99. HP is only reinforcing this perception.

        Apple’s pricing message is always consistent. Don’t expect any sale prices on the current model, until the next model is released. So, if you want one, you might as well buy one as soon as possible. And Apple gets full retail price, sells out inventory.

  5. A. They found another warehouse full of inventory. (inventory error)
    B. The number of returns were higher than they thought.
    C. Their suppliers had more parts in stock that HP is contractually obligated to use.

    None of the above would look good if they admitted to it. So they came up with the story of making more at a loss to meet demand.
    Doesn’t make any sense, but it sounds better.

  6. IF they really are producing “another run” of TouchPads, management at HP is unbelievably stupid. There’s no way these will sell even at $300, which MAY cover HP’s cost to produce the thing (but not R&D for webOS, let alone the $1.2 billion to purchase Palm).

    The ONLY way this could be beneficial is to drive up sales numbers of webOS for either raising capital to spin off the PC division into a separate company or to sell/license webOS to another handset/tablet manufacturer, like Samsung.

  7. Most likely, HP guaranteed and positioned a lot of material and parts with suppliers. They could just eat all that or try to resell to other companies, but some of it likely would have to be scrapped. So, if they’re on the hook for a certain amount, they may as well make news out of it.

    Regardless, all these decision are weird.

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