Hewlett Packard is up to something sneaky. Again. HP has announced that it will make more of those lame TouchPad tablets that it was desperately trying to get rid of last week by selling the unwanted devices for a discounted $99, as we reported. Before, nobody would touch the tablet, but the limited-time-offer set off some sort of carnal need for HP TouchPads. Now they are all sold out and going for $300 on e-Bay; we thought it was a pretty brilliant marketing scheme. Well done, HP: You got rid of your stinkers, made back some of the losses, and did some well-played brand management. Even if you were losing money on the tablets, which cost around $300 to make, the move worked for you guys--at least the first time. But this second go around: What's going on here?
It's a bit of a head scratcher that HP would manufacture more of something that they desperately wanted to get rid of. It's math: If they make more units and sell them at $99 they will lose money. $207 to be exact, explains The Wall Street Journal's Ian Sherr. "The decision to manufacture a second run, however, left analysts scratching their heads. The introductory model of the TouchPad costs $306 to manufacture, according to an estimate from research firm IHS iSuppli, suggesting a loss of roughly two-thirds if it is sold for $99."