HP should rethink ditching the TouchPad, says Canalys

HP should rethink ditching the TouchPad, says Canalys
HP has probably had the most wanted gadget in the industry this year - the HP TouchPad. Overpriced at launch, the 9.7-inch webOS-running slate was sharply discounted to $99 just a month and a half after launch, spurring long lines of bargain hungry customers making it all look like Black Friday hit us earlier. But HP’s decision to dump the TouchPad might have come a little too early. 

"The TouchPad was overpriced at launch and did not sell. This led HP to draw a premature conclusion that the product category had failed," Canalys says in its latest research report.

The research group argues that not only HP would have been better off keeping the tablet - it would have been able to capture 10% of the iPad-dominated market for tablets. This, the researchers add, could double or triple the $8 to $10 billion estimated value of the PC unit, which HP said it wants to spin off. Some analysts expect tablets to continue their mushrooming growth and cannibalize notebook sales.

"The TouchPad has become the 'must-have' technology product of 2011. Perhaps no other technology vendor, apart from Apple, has ever created such hype for a technology product," Canalys added. Moreover, the tablet had reportedly become the hottest in HP’s product porfolio in the last decade. 

Finally, with Android tablets slow to catch up with the iPad, it’s exactly the HP TouchPad, which could have made a dent in Apple’s tablet sales. "HP has established a lead in the race to be the number two behind Apple in the pad business but the window of opportunity will begin to close if delays occur," Canalys concluded. At $99, there’s little competition for the TouchPad and it has proven super successful. HP has mentioned that while it has sold out all produced tablets, a second batch is coming soon.

source: Canalys via Reuters

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1. remixfa

Posts: 14605; Member since: Dec 19, 2008

they need to keep it and "relaunch" it at 200 or 250 so its still a great deal but they arent losing so much money on it.

7. JeffdaBeat unregistered

Dude, I still think tablets are overpriced. How about instead of trying to cash in on a TON of hardware revenue, cash in a little or take a hit on it. Video game companies have been doing that for years. Where they make their money up is in the games and network subscriptions. Cut the TouchPad to $200 like you said and start hiring in house app developers. Have them pump out different apps kinds of apps if independent developers aren't ready to make the jump. If they come up with a good batch of apps, more developers will get on board. Plus, people will actually buy their tablet because it would be cheaper than anything out there...

9. remixfa

Posts: 14605; Member since: Dec 19, 2008

/.\ .I .I . I . I What he said.

11. Gcombs

Posts: 136; Member since: Aug 22, 2011

Agree I don't think tablets should cost more than laptops.

12. remixfa

Posts: 14605; Member since: Dec 19, 2008

they dont.. if your buying a nice laptop not an Eee machine.. lol.

2. DoctorD0S unregistered

Eh everyone knows the prices were $99 and $149 and will expect that. They can probably get away with $149 and $199, but I am not sure over $200 will work. That said, the hardware is more than adequate for 95% of people who use tablets, and as such they don't necessairly have to improve it, just let economies of scale and technological progression drive the price down. If they could somehow pull off an Amazon model, and subsidize the price with something else (content, subscription something) they could probably do quite well.

3. chris da computa guy unregistered

It's ALL about the WEB-OS software. The touchpad is just a delivery mechanism for WebOS. The MONEY is in the platform the touchpad runs. If HP does keep the touchpad and continues to develop WebOS, then there is MUCH life going forward for it. Then it's just a matter of getting the software on all different types of hardware. I believe WebOS is a worthy competitor and can definitely become a VERY big money maker. I personally love the WebOS system. It just needs the apps and some more fine tuning. I love WebOS TRUE multitasking. It's great on the tablet. My wife and I both picked up a 32 gig model for each of us at the firesale prices. If anything, these firesale prices have reinvigorated the platform and have introduced it to many others who may not have otherwise really known about it or would not have bought one at the higher prices. Granted, i'm sure most who did pickup the tablet at the reduced pricing were probably techies like me. WebOS NEEDS to live on and become more of a sought after platform. I

6. iKingTrust

Posts: 716; Member since: Jul 27, 2011

Nice. Thanks for sharing. I think you may be on to something

4. iKingTrust

Posts: 716; Member since: Jul 27, 2011

"Finally, with Android tablets slow to catch up with the iPad" LMAO

5. hepresearch unregistered

Feb. 2011... Nokia announces the death of Symbian; sales of remaining Symbian handsets plummet, prices drop slightly, and market share withers away in a single quarter. Nokia Windows Phone 7 handsets never emerge, and Nokia Windows Phone Mango handsets will not be ready for the US until 2012. The completely unnecessary Nokia-death-plunge is nearly lethal, but it seems that they will survive after all. In dropping their differentiating OS's (Symbian, Maemo/Meego) and hence alienating their fan-base, Nokia learned a costly lesson, and I doubt they will ever repeat it. You would think people elsewhere would try to learn from this, and indeed it appears that RIM is giving it a shot, trying to salvage what they have left and release some new, possibly invigorating, models before it is too late. However, we then watched as this happened... Aug. 2011... HP announces the end of WebOS; many remaining WebOS tablets and phones are recalled, but the leftovers start to sell like CRAZY once the prices are dropped through the freakin' floor, to the point that inventory runs out in an instant. Orders rise and demand exceeds supply, despite the fact that HP is now offering partial refunds to many people who bought their devices. Not only does HP try to rid themselves of WebOS devices, but apparently they decide to divest their entire powerful hardware division (including laptops and PC's). Apparently, HP will no longer manufacture hardware, but will only create "cloud-computing software solutions" moving forward. In dumping a product, which easily could have kept selling at a slightly lower price, by setting panic-pricing and inspiring a flock of vulturesque bargain shoppers to buy out everything that was left, HP has single-handedly and unnecessarily undermined their own profits, created a severe supply shortfall, and destroyed their own credibility. They have sabotaged their own business model in order to achieve... well... nothing so far. Future plans? Nothing for sure in sight. Congratulations! Stupid, stupid, stupid... Stoooopid!

8. Mike S unregistered

Err, You should not confuse tablets being bought at fire sale prices with success. If HP has to sale tablets at a financial loss then it is not a success to the company and therefore it should drop the tablet. What the demand for the HP TouchPad proved however is that there is a huge market and demand for an alternative to the iPad. However, non-iPad buyers are not Apple suckers that will pay top dollar for the sake of being fashionable and popular. So to break open the non-iPad tablet market you need to give the consumers a high value and they will come.

10. ayephoner

Posts: 858; Member since: Jun 09, 2009

completely agree. the cheap android tablets on the horizon are going to kill. i almost wish i wouldnt have bought my touchpad and would have held off for one of them.

13. snowgator

Posts: 3621; Member since: Jan 19, 2011

I truly, truly thought HP was going in full steam, guns blazing to get the Touchpad into primetime. WeBOS is perfect for a tablet, and the market is only at the start of it's lifespan. Short sighted decisions from a company determined to drive itself off the cliff from a very strong market position.

14. downphoenix

Posts: 3165; Member since: Jun 19, 2010

HP launched too late and didnt have enough faith in the platform. Also pricing the same as Apple was a dangerous move, $400 would have been a good starting price and after 3 or 4 months they probably could have got the cost of manufacturing down to less than $300 and could have dropped it down to $300, breaking even but more or less having a good shot at being the #2 tablet Platform. After building up a solid market, then they could have more lucrative models out there, such as those that have extra memory for $100 or so more even though the extra memory might cost $20.

15. corporateJP

Posts: 2458; Member since: Nov 28, 2009

They had something going when the price dropped. Most people only want tablets to use as web browsers, picture galleries, etc. At a descent price, you rope them in. $600 for an iPad or Xoom is just crazy to me. Show me something good for less than $300, I'm all in...

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