OuchPad: Best Buy Sitting on a Pile of Unsold HP Tablets

Arik Hesseldahl — Wed, 17 Aug 2011 00:32:21 +0000

There have been plenty of hints that Hewlett-Packard’s TouchPad isn’t selling well. First there was a $50 discount. Then there were spot discounts of $100 at outlets like Costco. Then the $100 discount became permanent. Adding insult to apparent injury, a deal on Woot for $120 off an entry-level 16 gigabyte TouchPad netted all of 612 takers.

With HP set to report quarterly earnings tomorrow, sources familiar with the matter tell AllThingsD that TouchPad sales are failing yet another critical test: Sales at big-box consumer electronics retailer Best Buy.

According to one source who has seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory.

A second person who has seen Best Buy’s TouchPad sales figures confirmed the results as “consistent with what I’ve seen,” and went so far as to say that 25,000 sold might be “charitable.” This source suggested that the 25,000-unit sales number may not account for units that consumers return to stores for a refund.

Best Buy, sources tell us, is so unhappy that it has told HP it is unwilling to pay for all the TouchPads taking up expensive space in its stores and warehouses, and wants HP to take them back. HP, for its part, is pleading with Best Buy to be patient. We’re also told that a senior HP executive, possibly executive VP Todd Bradley, is slated to travel to Minneapolis soon to discuss the matter with Best Buy executives.

These numbers are emerging just one day before HP is set to report quarterly earnings. While it’s possible that HP will choose not to disclose any unit-sales results for the TouchPad — because as yet they’re unlikely to be large enough to be material — if it does report anything on the subject, that will probably be a figure known in industry circles as “channel sales,” which are the number of units sold to stores like Best Buy and Costco. Channel sales don’t reflect sales to end customers, known as “sell-through.”

HP declined to comment, as did Best Buy.

There’s more. TouchPad sales aren’t only failing to catch on at Best Buy, but also at other retailers, including Wal-Mart, Micro Center and Fry’s, says analyst Rich Doherty, head of the Envisioneering Group. Doherty says that spot interviews at stores on both coasts show that HP’s “wildcat pricing moves” on the TouchPad have prompted consumers to wait and see what happens in the next few months.

“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,” Doherty told me.

For the record, the TouchPad costs $399.99 for the 16GB model and $499.99 for the 32GB version. Both started at prices exactly $100 higher when first announced in June.

So what’s HP’s next move? Doherty says that with the back-to-school PC buying season underway, HP will likely use its leverage as one of Best Buy’s top suppliers — the other is Samsung — to offer bundle deals: Buy an HP computer, get the TouchPad for a special price.

Shopping for Basics and Saving Money on Your Next PC

Walter S. Mossberg — Thu, 30 Oct 2008 01:06:02 +0000

It’s time for my annual fall PC buyer’s guide. As always, this guide covers what average consumers doing typical tasks should look for in a desktop or laptop PC. That excludes heavy-duty gamers, corporate buyers, techies, or enthusiasts.

But this autumn, we find ourselves in a serious global economic slowdown. So I will focus this edition of the guide on how folks whose PC budgets have shrunk can still get something adequate for light use.

The guide below applies to both desktops and laptops, since the latter, at least in the consumer market, have achieved rough parity in performance and versatility, and are now more popular than desktops.

[ See post to watch video ]

Windows vs. Mac: I consider the Mac operating system, Leopard, to be faster, easier and more stable than Windows XP or Windows Vista. It isn’t susceptible to the vast majority of malicious software that circulates on the Internet. And Macs also include Apple’s superb built-in iLife multimedia suite. Macs can even run Windows, though that costs extra.

However, Apple (AAPL) has consciously chosen not to offer machines in the bargain category. The cheapest Mac desktop, the minimalist Mac Mini, which doesn’t even include a monitor, speakers, keyboard or mouse, costs $650 for a model with a hard disk I consider adequate. The cheapest Mac laptop, the base model of the prior-generation MacBook (which Apple has retained in its lineup) is $999.

Both are good values, mainly due to the software. And Macs can save you money over time. But if the lowest upfront cost is your objective, you can pay hundreds less for desktops and laptops from Windows PC makers.

Which Windows: Windows Vista is too often slow, and incompatible with older peripherals, such as the printers you might not want to replace in this economic climate. It also can cost more because it demands beefier, and thus costlier, hardware to run well than does the older Windows XP.

Budget shoppers should look around for a computer that still runs XP, either one of the dwindling number of models built with XP in mind, or one that has been “downgraded” by the manufacturer to XP. This downgrade “feature” can cost $50 or more upfront, but permits you to buy a cheaper machine.

Dell Inspiron 530

For instance, I recently advised two of my budget-minded friends to buy a low-end Dell desktop, the Inspiron 530, at Micro Center, a small but very good national chain of computer superstores. This Dell (DELL) runs XP, and has a low-end Intel (INTC) processor. The store is currently selling a version with a 250-gigabyte hard disk — more than enough for an average user — and 2 gigabytes of memory, generous for XP, for just $400 after instant rebate. You can get a similar good deal directly from Dell.

These particular friends, one on each coast, each bought a nice LCD monitor for $100-$150, and were out of the store for very little money. Since they only wanted to run Microsoft (MSFT) Office, browse the Web, do email and manage photos, this machine met their needs.

Another option is a low-cost machine with the Home Basic version of Vista, which also tends to cost less and to require less-expensive hardware than the more-common Vista Home Premium. If my friends had wanted laptops, I could have steered them to a 15-inch Acer Aspire laptop at the same store. This machine runs Vista Basic, with 1 gigabyte of memory and a 120-gigabyte hard disk, and costs $380.

You can often buy an even less-costly computer if you opt for the Linux operating system, but I still don’t advise this for average non-techie users.

Memory: For XP, or a Mac, I suggest 2 gigabytes of memory, but you can get away with 1 gigabyte for light use. For Vista, I recommend 3 gigabytes, but 2 gigabytes will do on a tight budget. You can always add memory later.

Hard disk: On a laptop, 160 gigabytes is the minimum I usually suggest, but you can get by with 120 gigabytes and upgrade when economic times are better. On a desktop, 250 gigabytes is easily obtainable, but 160 gigabytes will do.

DVD drive: If you never record DVDs, you can save money by buying a cheaper combo drive, which plays both DVDs and CDs, but records only the latter.

Processor: Look for a dual-core processor, but to save money, don’t worry about the speed, model number, or brand.

Video: A separate, or “discrete,” video card is best, especially for Vista Home Premium, but budget shoppers should stick with lesser “integrated graphics.”

Other features: If your home lacks the fastest “n” version of Wi-Fi, spend less for a laptop with the older “g” version. If you don’t need to do video chats or recording, don’t pay for a built-in camera and microphone.

Netbooks: If you don’t mind a tiny screen, cramped keyboard and limited file storage, these popular new mini-laptops can save you money. Some sell for under $400, even equipped with Windows.

Remember, pay only for the computing capabilities you need.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

AllThingsD » Micro Center

OuchPad: Best Buy Sitting on a Pile of Unsold HP Tablets

Shopping for Basics and Saving Money on Your Next PC