Arik Hesseldahl

Recent Posts by Arik Hesseldahl

HP’s TouchPad: The Tablet That Refused to Die

Hewlett-Packard’s TouchPad is back for sale at Best Buy.

Unceremoniously killed under HP’s prior CEO on Aug. 18 after disappointing sales, the device quickly found a market after retailers and HP itself slashed the prices on remaining stock.

This time, according to a Best Buy press release, a 32 gigabyte TouchPad is going for $149, with the purchase of an HP- or Compaq-branded notebook or desktop PC. Sold separately, the price jumps to $599.99.

HP, for its part, has sold out of its internal stock of the device, according to a statement on the company’s Web site. TouchPads can, however, still be found on Amazon and on eBay.

By bundling the TouchPad with PCs at its biggest retail partner, HP is giving itself an arguable edge against Acer, Dell and Toshiba in what is sure to be a cutthroat holiday season for PC and tablet sales. After about a month on the market, and before the product wound up on the chopping block, Best Buy sold less than 10 percent of the 270,000 TouchPads it had in inventory.

It’s hard to know how long the deal can last. Sources familiar with HP’s build plans say the initial TouchPad order was for between 1.8 million and two million units, though a third source disputed that number without elaborating. Regardless of the number ordered, sources familiar with the deal say that HP’s decision to kill the product had no immediate effect on the build plans, as components had already been purchased and manufacturing was under way. A source familiar with the matter says the manufacturer is Taiwan-based Inventec, not Compal, as has been previously reported. HP was contractually obligated to take delivery on the remaining units in the pipeline.

That means the TouchPad is now officially a loss leader. As an IHS iSuppli teardown analysis in August showed, HP’s cost to build a 32GB TouchPad is $328.65. At $149.99, HP takes a paper loss of more than $178 per unit.

HP isn’t exactly crying over the lost money. Remember that as part of the hot mess of news it announced on Aug. 18, the company included plans for a $1 billion charge to account for costs related to shutting down the TouchPad and webOS hardware business.

Whatever happens, this is probably the last hurrah for the TouchPad — for real this time. That is, unless no one takes advantage of the offer to buy one along with a PC. Any stock left over after the holiday season rush will probably wind up in Best Buy’s equivalent of the bargain bin.


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