HP's TouchPad launch, inventory under the microscope

HP's TouchPad launch, inventory under the microscope

Summary: HP's earnings conference call is likely to feature a bevy of questions about the TouchPad and the marketing and research and development resources it sucks up.

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When HP reports its fiscal third quarter results Thursday one prickly set of questions for CEO Leo Apotheker will revolve around the company's launch of the TouchPad.

AllThingsD's Arik Hesseldahl is reporting that Best Buy is stuck with roughly 250,000 TouchPads that didn't sell. Now HP and Best Buy are bickering over who will pay for all these TouchPads. HP has cut the price of the TouchPad in an attempt to move more units.

The fact that Best Buy and HP are fighting over TouchPad inventory isn't all that surprising. It's clear that the TouchPad wasn't a hit with consumers, but Best Buy didn't give the tablet much support either. At my local Best Buy you can barely find the TouchPad. HP's tablet is in a corner---a device ghetto---as brands like Acer and Samsung get more play. Apple's iPad still attracts the crowd, but it's clear the TouchPad is bottom of the barrel when it comes to selling priority.

Contrast Best Buy's approach to the TouchPad with RIM's launch of the PlayBook. Best Buy sales folks were well versed in the PlayBook. These same people barely know the TouchPad is there.

Jason Perlow noted the Best Buy-HP friction at the TouchPad launch. Perlow pointed out there was little signage and HP quickly contacted Best Buy.

Perhaps HP isn't providing enough incentives to Best Buy, but it's clear that there isn't much priority for the device. Who gets the blame? Probably both parties.

Auriga analyst Kevin Hunt said in a research note:

The tablet launch appears to be a failure at this point, and the degree of R&D and marketing spend that is being burned there is also a valid question going forward.

Fortunately for HP, the TouchPad---and any financial hit from the launch---is a pimple on the arse of an elephant. HP's quarter will revolve around server, networking and storage sales. The consumer PC business will struggle, but enterprise gear and services will make or break HP's financial results.

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Topics: Tablets, Enterprise Software, Hardware, Hewlett-Packard, Laptops, Mobility

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23 comments
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  • RE: HP's TouchPad launch, inventory under the microscope

    Can't believe that such a good product does not sell. This shows people associate themselves with APPLE / Android brand more than looking for what they really need.
    I reckon the same might be the case for Windows 8 too. MS watchout, warning for you
    krishnansriram
    • RE: HP's TouchPad launch, inventory under the microscope

      @krishnansriram

      Perhaps, the product is no good. It looks like last years iPad and I've always thought the focus on "true multitasking" and "flash" was going to bite them.

      Of the many lessons I believe that I learned during the OS/2 wars of the 90s, one of the most important was on understand customers and customer facing features.

      People don't care about "true" multitasking. This emphasis on cards and multitasking, on "look, we can run a video in a two inch square while checking email" wasn't something people want or to be frank, need. People, I think, wish to browser and listen to music. Or view a video. If a new email comes in, they want to switch to it, handle the email,the switch back. Whether or not the video keeps playing is irrelevant.

      Apple's sales have shown this time and time again. Apple attack the most important use cases via their multitasking APIs and Flash has *never* been important to the vast majority of the mobile world.

      Their focus was all wrong, IMO, and now the price of that wrong focus is being paid.
      dhmccoy
      • RE: HP's TouchPad launch, inventory under the microscope

        @dhmccoy
        Well after the updates, the device is not that bad. It is great and WebOS is great on Tablets than phones. The issue here is marketing. HP released a half baked product without rear camera (how many of the tablet users use a rear camera on a slat device is beyond my thought though). So when a casual buyer checks iPad and any other device, they normally get attracted to iPad because of variety of reasons. When HP released touchpad it was in bad shape, the response was slow and buggy, and some of the touchpads stopped working within a week in stores. BB staff complain that HP Staff didn't show up to fix the mess etc. There are more reasons than the quality of the product itself.
        Ram U
      • RE: HP's TouchPad launch, inventory under the microscope

        @dhmccoy

        The Touchpad does all the things that you want (Browser, music - with premium speakers, video, and email).

        What multitasking allows you to do though is start to compose that email, stop look up that YouTube video that you wanted to reference, get that URL, and paste it into the email. It's really quick and handy.

        When watching a football game at the bar (I'm a fan of a team who isn't the local team and thus the bar is my DirecTV), I'm able to keep apps open for Twitter as well as browsers for blog updates from my favorite writers and live stats. It helps the commercials go by. I never have to close any of them. I just switch through them almost like alt+tab on my Windows PC.

        Flash has never been important to the vast majority of the mobile world because it didn't exist. It's like say that cars weren't important to the people in the 1750s.

        I think it makes sense for people to carry the expectations of their computer to their mobile device. This is 1998 where everyone is using Palm Vs any more. Ask people if they want the full feature set or a subset and they'll say full feature every time.
        bmacfarland
    • RE: HP's TouchPad launch, inventory under the microscope

      @krishnansriram
      I walked in to a Best Buy last week with my gf and as we walked by one of the Touchpad displays, she asked, 'Hunh, what kind of iPad is that?' At the Galaxy Tab 'This iPad is a little wider'.

      That's what competing tablets are up against. The iPad is becoming synonymous to tablet, in consumer's minds. I've seen it elsewhere as well.
      Theseus
    • RE: HP's TouchPad launch, inventory under the microscope

      @krishnansriram <br><br>I agree, every (working, in reference to the BestBuy stores lack of ability to charge them) HP TouchPad I have seen works great, does what it is supposed to, is VERY quick and responsive. I highly recommend the HP TouchPad to any non-techie person with a techie friend or family member.<br><br>Simply because of the lack of applications to make a techie person happy.<br><br>I had to plug both of the models in at the only best buy store local to me.
      aiellenon
    • RE: HP's TouchPad launch, inventory under the microscope

      @krishnansriram. I was surprised as well, but it shoudln't come as a surprise. With little developer support and a strong PR from the main competitor then it was a matter of time. I liked WebOS, but like many Android tablets that came out of the gate it needed to feel finished, polished and have developer support in a big way. It didn't. Google is persisting and I am sure it's peristance will pay off. I would like to see Web OS go open source for tablets. I would love to see what it would look like on a xoom or similar Android tablet.
      striker67
  • RE: HP's TouchPad launch, inventory under the microscope

    >>but Best Buy didn?t give the tablet much support either.
    You are 100% correct. I have seen at most of the Best Buy stores, the HP TouchPads are non-working most of the time they don't even start to experience. When I asked one of the staff there, he said that HP engineers would come and fix it, but that was just needing a charge. You will see 100% of iPad2s on display work properly, and rest of the tablets only Gods at Best Buy know. I got mine from a newly opened Best Buy Mobile store for $249 with Best Buy new store discount and other. Things there are working as of now (because it is not even 2 weeks old store), I give them another 2 weeks and you will see none of the tablets except iPads will work there either. I am pretty sure.
    Ram U
    • RE: HP's TouchPad launch, inventory under the microscope

      @Rama.NET
      From an acquaintance that manages a Best Buy, I hear that Apple retail reps, are very, VERY stringent and specific about how and under what types of conditions their products are to be displayed. And they always secretly visit stores to check.
      Theseus
  • RE: HP's TouchPad launch, inventory under the microscope

    Could be a sign of tablets in general and how the market is saturated.
    LoverockDavidson_-24231404894599612871915491754222
    • RE: HP's TouchPad launch, inventory under the microscope

      @LoverockDavidson_
      +1. i don't think it is saturation, but I see it as having multiple devices and consumers to carry. I think once laptop, tablet merge into one device, there would be more demand. If you look into Windows or MacOSX, they are moving in the same direction.
      Ram U
  • These numbers do not add up!

    Best Buy has close to 1200 stores. The article quotes a source that indicates they have 217,000 plus HP Touchpads IN STOCK. That would mean that each and every store worldwide would have in stock over 180 HP Touchpads. This is very unusual for Best Buy, which generally hews to a "just in time" inventory management philosophy. Especially so for new and unproven products. It will be interesting to see if these numbers are validated, and if so, what Best Buy was thinking regarding the Touchpad launch........these figures just do not smell right!
    rodfarthing
    • RE: HP's TouchPad launch, inventory under the microscope

      @rodfarthing
      Not saying you are 100% wrong, but...

      ever hear of a warehouse? how about a distribution center?
      aiellenon
  • RE: HP's TouchPad launch, inventory under the microscope

    iPads sell because of advertising. In the SF Bay Area I see iPad billboards everywhere I drive. Until HP matches the money Apple spends on advertising they won't win.
    lippidp
    • RE: HP's TouchPad launch, inventory under the microscope

      @lippidp First, as we now know HP won't be spending anymore on advertising for the Touchpad let alone matching what Apple spends. Second, marketing only gets you so far. You might see iPad billboards all over in the bay area but where I live there aren't any and guess what, the iPad sells like crazy here too so it's not the billboards. There are also fewer iPad TV ads than there are for the competition too so maybe this whole "It's the marketing" theory isn't all it's cracked up to be.
      non-biased
  • HP should just scrap webOS, figure out how to put Windows 8 on it,

    and try their luck again next year. But, they'll need to keep the hardware handy, and perhaps even improve on it with a few more features which Win8 will support.
    adornoe
  • Big money on ads only goes so far...

    The product has to live up to expectations.

    People are not as stupid as they seem, they know a lemon.
    Johanna232
  • when did anyone buy &quot;just as good&quot;

    HP get real; if your are going to "beat" apple then gives us a tablet which is 1/2 as thin as IPAD and 2x faster than IPAD; give me a break....always put your best foot forward you tried to scam us...now you will pay twice
    amasys
  • RE: HP's TouchPad launch, inventory under the microscope

    In my opinion, this really doesn't have much to do with what a device looks like or if it has flash or multi-tasking. It's simply not promoting it as it should have been. If everyone is truthful about the reality of the Touchpad and the iPad, there really isn't THAT big of a difference. Both devices have their strong and weak points. With Apple, you are introduced to their World and their products and services and what they mean to the AVERAGE user. Anyone can go to their website and feel like their in an amusement park. It's the adventure. It's the experience. THAT'S what Apple sells. Whether the products are worth the experience is up for debate but if you're sold on AppleWorld, you'll be sold on what they offer. <br><br>On the otherhand, if you go to most any other website for non-iPad tabs, you get something more akin to a business proposition - you like it? Click the 'Buy Now' button. The thing that bothers me about HP is that they have done quite well over the years with their PC's and laptops making them interesting and even "fun" to some point. And they really could have done that to a high degree with the Touchpad, but they didn't. Why? Who knows? Maybe they knew it wasn't quite ready for primetime. Maybe they were trying to appeal to the more logical-thinking among us who aren't amused by excessive hype. I don't know. But as great a device as the TouchPad is (especially after the update), a majority of the consumers will never know how great it is. Keep in mind though: It's not about one being better, but different. <br><br>There still is hope to salvage this misstep if HP would work out whatever hardware/software it feels it has to fix and start selling itself to the consumer. HP needs to get back to that "fun" side and let everyone know what they can do and how it can apply to our daily lives. Or, even....wait for it.....CHANGE our lives. But having said all that, I'm afraid Apple has the feel-good-warm-fuzzy-AppleWorld-marketing ploy to themselves and no one can even challenge it. But, as they say, what goes up must come down and eventually, someone will figure out a new and better way of doing things. I hope so.<br><br>I imagine if Dickins was responding to this article, he might call it 'A Tale of Two Tablets'.<br><br>"It was the best of marketing, it was the worst of marketing"....
    omahapianist
  • Now they know how many holes it takes to fill the Albert Hall

    A lot of these discussions about "iPad vs The World" contain the hidden assumption that the device is the product. Huge arguments go on about how the devices compare, as if that were the determining factor.

    It isn't. When people buy a drill, they don't really want a drill. What they want is holes. Apple is not only alone in using its advertising to discuss holes instead of drills, they are the only ones who have a drill for which there's a bit for every purpose. The other guys have to talk about the feeds and speeds of their drill because they don't have many bits. Which means they can't make a very wide variety of holes. And holes are what the customers are ultimately buying.

    To succeed, you have to know what you're selling. Apple seems to be the only one who understands that they are selling uses, not hardware devices.
    Robert Hahn