HP Brings TouchPad Back From the Dead

Despite killing off the webOS-based tablet, HP plans to manufacture some more – are happy consumers or angry suppliers to thank?

Sarah Thomas, Director, Women in Comms

August 30, 2011

2 Min Read
HP Brings TouchPad Back From the Dead

HP Inc. (NYSE: HPQ)'s webOS-based TouchPad isn't quite dead yet. The company plans to manufacture another batch to meet "unfulfilled demand" for the tablet, following its price drop from $499 to just $99 last week.

Along with its third-quarter earnings earlier this month, HP announced it will no longer build the hardware for any webOS devices, including the tablet, while it pondered what to do with its mobile devices unit, the Personal Systems Group (PSG). But, the company updated a blog post Tuesday saying it would produce one last run of TouchPads owing to unfilled demand, although it doesn't know when the units would be available or how many it would get. (See HP Shuts Down WebOS Device Biz and OS Watch: Who Wants WebOS?)

"The only “unfulfilled demand” was for a product that was being sold at unsustainably low, money-losing, fire-sale prices," jibes tech reporter Dan Frommer.

They say
Frommer isn't the only industry observer not buying the consumer-demand theory. HP issued the update after the DigiTimes reported that upstream suppliers are suffering from a component inventory surplus following the company's decision to halt production. Rather than building more TouchPads, HP could just be using up the parts its suppliers have lying around for them.

Boy Genius Report blogger Zach Epstein suggested that it wouldn't make sense for HP to build, ship and sell TouchPads at a loss just to satisfy existing contracts when it could agree on a lump payment instead. But, InformationWeek reporter Eric Zeman points out that it could be cheaper for HP to do so, rather than renege on its contracts, not to mention risk hurting its supplier relationships.

Components issues aside, HP did see overwhelming demand for the TouchPad once it dropped prices. The company sold out of the device across retailers in record time. The fire sale couldn't save its margins, however, as the tablet will cost the company more than $100 million owing to a $0.05 charge per share. (See Lessons From the $99 HP Tablet Rush.)

We say
HP doesn't seem to know what it wants to be when it grows up. Further clouding its strategy, its head of PSG, Todd Bradley, tells Reuters he prefers the company spins off PSG, leaving him as CEO, rather than sell the company to a competitor. He also claimed there may be a place for the TouchPad again in the future tablet market, which he says is still relevant to HP.

But the more apt question has already become, is HP even still relevant to the tablet market?

  • Making Sense of HP's Mobile Mess

  • HP: Tablet Effect Is Real

  • HP TouchPad Adds Entertainment Apps

  • OS Watch: RIM Rebounds in Emerging Markets

  • HP TouchPad Success Hangs on Apps

— Sarah Reedy, Senior Reporter, Light Reading Mobile

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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