Want further proof that Hewlett-Packard, Comp.'s (HPQ) webOS is going nowhere fast?  Look at Woot.com, veteran daily deals site, who tried its hand at selling HP's sole webOS tablet, the TouchPad.  Even the mighty Woot.com could only sell 612 of the infernal devices.

I. TouchPad Sales Get Ugly

When HP launched the TouchPad in July, it proposed a price of $500 USD for the 16 GB model and $600 USD for the 32 GB model, roughly in line with the pricing of Apple, Inc.'s (AAPL) iPad 2 and top of the line Android tablets.

The problem was that the TouchPad wasn't exactly top-of-the-line when it came to its user interface, according to reviewers.  Most reviews complained of slow performance and a clunky OS layout.  The problem isn't so much that webOS 3 is terribly bad.  It's that it's not as good as the competition.  In that regard the OS appear to be exactly cut out for the world of tablets.  

HP is still laboring at trying to save the TouchPad -- and its bottom line.  It slashed $100 off the price of both models.  And it recently issued a major update full of tweaks to try to salvage the experience.  HP says the updated will make your TouchPad "even more like nothing else."

But that's done little to help sales.  Retail giant Staples, Inc. (SPLS) recently slashed another $50 off the price of the TouchPad, offering it for a bargain bin $350 USD and later lowered the price even further to $300.  

Rival retailer Best Buy Comp., Inc. (BBY) may soon find itself in a similar lot.  According to a report in All Things Digital, internal reports reveal that Best Buy ordered a stock of 270,000 TouchPads, hoping the devices would be a hit.  It's only been able to sell a reported 25,000 units in the month since -- less than ten percent of its inventory.

An All Things D source at Best Buy confirms that reports of the retailer being buried under the surplus stock are "consistent with what I've seen", and even goes as far as to say the sales figures might be "charitable".  They say that the actual numbers could be quite a bit lower as a substantial number of customers have sought refunds on the devices.

II. HP MUST Act Now

Plunging prices have hit TouchPad sales with a double whammy.  Not only are many customers not interested in the TouchPad, but many of those who are actually interested are now opting to wait in hopes of further price drops.  States Rich Doherty, head of the Envisioneering Group, an analysis firm, "After the initial surge of interest after the July release, all those price promotions have caused consumers interested in buying a TouchPad to pause because they think the price is going to fall further."

But you don't need a high-paid analyst to tell you that.  

Soaring back stocks?  Plunging prices?  Where have we seen this before?  We can tell you where we've seen this before -- the Palm Pre in its dogged final days of fire sales before Palm, Inc.'s own fire-sale-priced acquisition by HP.  Since the start of the smartphone era Palm has suffered from unrealistic expectations and a "shoot first, ask questions later" mentality when it comes to production.  That, coupled with a snail slow pace of handset releases, ultimately doomed Palm as an independent company.  Now HP's webOS devices unit is looking awfully familiar -- a lot like the Palm of old.

Of course HP does have one advantage over Palm, in that it's the top U.S. PC retailer.  HP may be able to push sales of deeply discounted TouchPads during the back to school shopping season by offering deep discounts to those who also buy an applicable HP personal computer.

Sales dilemmas aside, we feel that its high time for HP to commit to some serious intervention and soul-searching when it comes to its rebranded Palm unit.  HP has thus far seemed publicly nonchalant about its struggling unit.  In other words, HP is content to let Palm be Palm.  But in doing so, it's letting its unit sink even deeper in the mire.

At this point the webOS unit has less than 1 percent of the tablet market and less than 1 percent of the smartphone market.  It's beyond a failure in sales.  

On the other hand, it does have a decent operating system, which, with the proper TLC and imagination could be reborn into something bleeding edge (like Microsoft Corp.'s (MSFT) ambitious Windows Phone 7).

In short, the time for the world's biggest PC company to act is now.  It cannot tolerate the ex-Palm unit to return to its old ways.  Because if it does, it might as well kiss the lucrative tablet and smartphone market -- and it's goal of future sales leadership -- goodbye.