backtop


Print 34 comment(s) - last by inperfectdarkn.. on Aug 22 at 10:02 PM


Retailers like Best Buy may opt for a "fire sale" on the TouchPad.  (Source: Unwired View)

HP is also looking to dump its profitable consumer PC unit, which is the top U.S. and global seller. HP wants to use the money to buy Autonomy, an even more lucrative enterprise software maker.  (Source: Wikimedia Commons)
Company is also contemplating how to dispose of PC unit

The era of webOS is over at Hewlett-Packard Comp. (HPQ).  While some would argue that the decision to kill the struggling lineup of tablet and smartphone devices was premature, HP has made its decision and it's standing behind it.

I. A TouchPad Fire Sale?

But that doesn't change the fact that it has a very big problem on its hands -- $100M USD worth of unsold HP TouchPad tablets.  At $400, that works out to 250,000 unsold units, but some speculate that HP may be taking a smaller per-unit write-off, which could indicate an unsold total as high as 300,000 units.

So what to do with the stock of TouchPads?  Sell them for pennies on the dollar?  Burn them? Bury them in concrete in the desert?

HP says it will be up to its sales partners, which include Best Buy Comp., Inc. (BBY) and Staples, Inc. (SPLS).  It will give them a case payout for the devices, which they can either return to HP or using the cash, sell the stock at fire sale prices.

It's unclear whether any of the big box retails are going to bite on the latter route.  But if they do, the former Palm unit may just have one last gift in store for its fans -- a deeply discounted TouchPad.  Such an offer may even convince some skeptics to partake.  Much like that girl at the bar starts looking better after a couple drinks, the rough edges of the TouchPad may become lovable quirks, if it's offered for, say, $150 USD.

HP and its carrier partners have not yet announced whether they will be conducting a similar program for unsold Pre3 smartphones, which were reportedly in advanced production, but sadly died soon before what would have been its U.S. launch.  Likewise, it must decide what to do with whatever Pre Plus, Pixi Plus, Pre 2, and HP Veer handset stock is sticking around at carriers.

The one word of warning when it comes to buying these devices is to consider that while they'll likely come at great prices, should they be sold, the operating system is unlikely to see significant future work, and likewise the app catalog is unlikely to see many new titles, now that HP has abandoned the platform.

II. HP May Have to Chop up PC Unit to Make it Sellable

In related news, HP's bid to offload its consumer PC unit (which reportedly has to sell seven computers to make as much profit as a single Apple, Inc. (AAPL) machine) is encountering resistance because of the unit's high value.

HP is the world's top seller of personal computers, and the top seller in the U.S., so the company is literally putting the number one position in the market up for bid -- an unusual sight.  Again, the reason why gets back to its dropping profitability -- HP wants to focus on more lucrative business solutions, following in the path of rival International Business Machines Corp. (IBM).

The unit is valued, according to Reuters, at around $10-12B USD.  It makes $38B USD in annual revenue, but only has a 5.7 percent profit margin (around $2.17B USD in annual profit).

Reportedly Taiwan's ASUSTEK Computer, Inc. (TPE:2357) and Acer Inc. (TPE:2353) are interested, but don't have enough cash on hand to fully purchase the whole business.  

Hong Kong-based Lenovo Group, Ltd. (HKG: 0992) has $3.8B USD in cash and a market cap of $45.76B USD, so it could complete a purchase with a mix of approximately 30-40 percent cash and 60-70 percent stock.  South Korea's Samsung Electronics (SEO 005930) also reportedly has a lot of cash on hand and is interested in getting deeper into the world of computers.  The deal could see problems, though, with U.S. antitrust regulators, as Samsung is already in the top two spots in global phone sales.

Whoever HP sells too, it's looking to move relatively fast, avoiding waffling on the transition.  That's bad news for HP's Taiwanese suppliers like Quanta Computer, Inc. (TPE:2382).  Whoever buys HP, they're likely to favor new suppliers -- a general market trend.

HP is looking to use the cash in generates to fund a $11.7B USD bid for London-based Autonomy Corporation Plc. (LON:AU).  Autonomy is one of the world's largest enterprise software companies.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: open the OS
By MrBlastman on 8/19/2011 12:03:57 PM , Rating: 3
ET was so terrible that it isn't even worth the price of a single .223 round to put through it. I remember playing it when I was 9 years old just after the videogame crash of '83 and I thought it sucked hard even then. Sure, games weren't all that amazing back in '84 but darn... ET--it just well, it made no sense at all and there were some real doozies that I had come across. This one took the cake.

As for HP selling off the computer division, I think it is a big mistake. So do a lot of people, apparently. I'd love for someone to interview Carly Fiorina about it. I never could stand her and always thought the Compaq purchase was ludicrous, but, still, it'd be funny to see what she thinks about this.

Leo is nuts. They never should have dumped Mark.


RE: open the OS
By JonnyDough on 8/19/2011 1:12:19 PM , Rating: 2
I have never liked HP. Overpriced printer ink on junk printers, PCs that are tough to open, ugly, and most of all just plain bloated with crap software - which takes me back to the printer again...drivers.

Anyway, selling their PC division was a great idea. Maybe someone can do better with it. Their monitors were ok sorta I guess, but I am sure they were manufactured at least in part by Samsung or something. Can anyone verify that?


RE: open the OS
By The Raven on 8/19/2011 2:44:34 PM , Rating: 2
quote:
I have never liked HP. Overpriced printer ink on junk printers
What printer do you have now that doesn't have overpriced ink? That I would like to know!

Also, my experience is that HP printers (LaserJets anyway) have been best in class. Now that is my experience going back to the 80s, and I don't know how their current line of LaserJets are like so...


RE: open the OS
By JonnyDough on 8/19/2011 2:53:11 PM , Rating: 2
I have a nice Brother laser printer. I still have a few qualms about it, but it prints fast and accurately in black and white. I am currently without a color printer - as I have had little luck with inkjets in the past. My HP used to claim to print large photos, but the photo paper would turn while printing, ruining the photo. If only they would use an entire rubber roller instead of just wheels to move the paper.


RE: open the OS
By LRonaldHubbs on 8/19/2011 2:56:57 PM , Rating: 2
You're right, all ink is overpriced.
http://theoatmeal.com/comics/printers

That said, Canon's ink for some models is cheaper than other brands because the print head is not part of the cartridge. I had a Canon i550 that lasted me about 8 years, and I could get a package of all four cartridges for $35. Now I have a Canon MG5220, and the pack of four is $45.


RE: open the OS
By vailr on 8/20/2011 2:58:00 AM , Rating: 2
Canon Pixma iP3500 replacement generic ink cartridges (includes the chip) only cost (shipped) ~$1 each from Amazon. Pack of 15 ink cartridges for $10.67 + postage.
http://www.amazon.com/gp/product/B001R9ATYK


"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki