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Even veteran retailers like Staples and Best Buy can't sell the TouchPad.  (Source: Palm Infocenter)

Only approximately 600 people took advantage of's fire-sale-priced TouchPad.

HP is letting its rebranded Palm unit return to its old ways -- overproducing and yielding new handsets at a snail's pace.  (Source: Business Blog)
Fire sale TouchPad prices are the latest sign that HP's troubled acquisition is continuing its old ways

Want further proof that Hewlett-Packard, Comp.'s (HPQ) webOS is going nowhere fast?  Look at, veteran daily deals site, who tried its hand at selling HP's sole webOS tablet, the TouchPad.  Even the mighty 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 (AAPLiPad 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.


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.

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By rsmech on 8/19/2011 12:42:47 AM , Rating: 2
I think Apple will be twice as big and twice as profitable in two years - what's your prediction?

I don't disagree that they will still be doing well in 2 years. You are missing the point. It took them more than 2 years to kill themselves the 1st time. There was nothing but Apple when I was younger. What happened then?

Apple has an unequalled reputation for quality and customer service.

I'm not going to dispute what you may be calling quality. Are you talking about looks or a phone that loses reception when you touch it wrong? We could go back & forth on quality, Many other mfg. have good quality also. They also have design flaw at times as well as Apple does.

Customer Service. Is this where you are talking about bricking phones, or if I remember correctly wasn't it Apple who sold cutomers laptops with new network hardware that wasn't fomally finalized yet and than when it was charged $10 for the software upgrade to make the hardware they already paid for work with the new standard. Kind of reminds me of when usb 2 came out & it was a standard "free" download with windows.

Apple has built the world's largest digital products and media store.

I knew many people who didn't want to leave iTune because they would loose all their investments in songs if they switchted. I know there were ways but the average usere didn't know them. Locking them in paid off in spades.

Apple has created and deployed the world's most successful retail operation which is growing rapidly.

Like I said before they were the king once before, what happened then?

Apple has consistently honed it's product line to a clinically precise and immensely consumer friendly range of SKUs all wrapped in cohesive branding

Blah, Blah, Blah. sounds like a salesmen.

Apple is one of the few tech companies with excellent and highly integrated software and hardware skills and products

Exactly. That is the point the previous poster was making also. Another word for "integrated" is "Locked, Closed". It's obvious from the past given a chance the customer wants choices. Luck for Apple the gaming consoles solved one of those choices for the consumer. Apple is learning when it comes to the iphone, consumers have more choices for apps than on the desktop side. But android provides even more choices, who is the consumer choosing now. iphone or Android?

Apple has always prioritised product design higher than almost any other company

I can buy a windows base pc with better hardware for cheaper, what were you saying?

Apple's product line is unusually integrated and coherent

My windows mobile device integrated with my work pc right out of the box. Neither the pc or mobile device needed any 3rd party software. How about your iphone?

Apple's supply chain is probably the best of any tech manufacturer which translates into quality of components, value for money and in certain key products such as the iPod and iPad significant price advantages.

Sounds like they are on the verge of killing their supply chain with Samsung. Also Apple doesn't make their own cpu's, memory, video controllers, network controlers, display screens, you pick the part. Many but not all the parts they use other companies have the same access to or equivalent parts. Again sounding like a salesman.

Apple's cash mountain means it it can buy up critical components in a sort of monopoly of supply strategy.

Makes them no different than MS, Intel, Google, and others. what's your point, they are not any more special then the others, it's not a plus if your competition can do it to.

One could go on but you can see where this is leading.

Not really, you haven't even left the starting line. I read a lot of smoke & mirrors and qualities they have in common with their competition. Again I state a major reason a kid doesn't pout when his parents buy an Apple computer is because he has his gaming console.

One thing I will give you that will help Apple is that when I was younger it was the boys that were on the computers more than the girls. For boys it was games which was Apples weakness. Now with social networking and console it really doesn't matter what you own. My main point was to say Apple didn't do it on their own, something filled a hole in Apples line up. (consoles)

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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