After Hewlett Packard announced that it would abandon its WebOS products in a press release last week, as we reported, it lopped $200 off of its not-so-popular TouchPad tablet, selling the smaller 16 GB model for $99 and the 32GB version for $149. The masses reacted. Suddenly a device nobody wanted, as AllThingsD's Arik Hesseldahl describes, "seems incredibly popular: HP’s own Web site appears to have sold out of them. Engadget noted that the TouchPad is the hottest gadget on Amazon today, but not for the newly slashed price. At the moment, the 16GB unit is going for $454 on Amazon, and the 32GB version for $502." Why the sudden change of heart for HP's big ole lemon?
People want cheap gadgets? When the TouchPad sold in the $400 range nobody wanted to splurge on a sub-par tablet. Sales stank, even after various failed discounts few people longed for a TouchPad as AllThingsD's Arik Hasseldahl reported earlier last week. "According to one source who has seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory." A week and a few hundred dollars later people yearned for a device that Mashable's Chris Taylor called a "flawed tablet." HP must've filled some low-budget tablet void, at least that what TechCrunch's Michael Arrington thinks. "But one thing I was very right on is the huge demand for a less expensive tablet computer, even in today’s iPad world. HP’s sale of the TouchPad for $100 just confirms this--people will buy millions and millions of these things even if it doesn’t have an Apple logo on it."
Yes, people will like a good bargain, but HP isn't the first tablet to dip below the $150 mark. Amazon retails various devices for reasonable sums.
Brilliant marketing! Coming off of a big announcement for such a big company, people are bound to respond, and react they did. The ailing company released "big news" that it would discontinue its WebOS software, kill their tablet and maybe spin off-their PC business. Riding on the buzz of that announcement, they then proclaimed that the dying device would sell for cheap. Get our tablets while you can. This strategy worked: People are buying the product for more than it initially sold.
"What we said was we'd stop manufacturing Web OS devices," PSG executive vice president Todd Bradley told CNBC yesterday, reports SmartHouse. "We're not getting out of the tablet market." HP won't make anymore TouchPads but Richard Kerris, an HP vice president, said his team plans to continue developing the software.
They also launched a new PC earlier this week, the HP Compaq 8200 Elite All-in-One Business Desktop.
They certainly lost money on the initiative, at least in Hasseldahl's estimation. But they sold devices that would've collected dust in warehouses. And the capital they lost with the price cut they gained back in increased brand value--people really want their goods. Perhaps a little media buzz was all HP needed to lift itself out of the doldrums.
This article is from the archive of our partner The Wire.