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http://dealsea.com/view-deal/54546
http://online.wsj.com/article/SB1000142405311190335270457654098
By IAN SHERR
The TouchPad is dead. Long live the TouchPad.
Hewlett-Packard Co. said it will temporarily resume manufacturing of its ill
-fated tablet computer just 11 days after killing its iPad rival as part of
a sweeping corporate overhaul.
The resurrection of the TouchPad follows a spike in demand after H-P,
desperate to clear out unsold inventory that had piled up at retailers,
slashed the price of the low-end model from $399 to $99.
The decision to discontinue the TouchPad came less than two months after the
tablet first went on sale in July, but made little traction against Apple
Inc.'s iPad despite an earlier 20% price drop. H-P executives said sales
were too weak to justify continued investment.
H-P didn't say what it would charge for the new batch of TouchPads, but
cautioned potential buyers there might not be enough to go around.
"We don't know exactly when these units will be available or how many we'll
get," H-P spokesman Mark Budgell wrote on a company blog. "We can't promise
we'll have enough for everyone." The company said it is pleased by the
response it has gotten so far.
On Aug. 20, H-P inadvertently created a TouchPad boom when it dropped the
price of the device. The move generated an Internet phenomenon—with Twitter
users sharing tips on websites were it was still in stock—and long lines
at retailers, including Best Buy Co., as consumers jostled to pick up a $99
TouchPad.
The decision to manufacture a second run, however, left analysts scratching
their heads. The introductory model of the TouchPad costs $306 to
manufacture, according to an estimate from research firm IHS iSuppli,
suggesting a loss of roughly two-thirds if it is sold for $99.
Sterne Agee analyst Shaw Wu said the temporary return of the TouchPad was
likely a poorly thought-through decision.
"They did a lot of these moves in haste," Mr. Wu said. He said the move will
likely create confusion among customers and application developers, which H
-P is still trying to woo.
H-P's temporary reversal comes in the midst of a strategic overhaul that
will focus the company on software and services. As part of the change, H-P
decided to stop making the TouchPad and other hardware running its webOS
software. It is also looking to spin off its computer business, the world's
biggest.
The company hasn't said what it will do with the group that manages the
webOS software, which was acquired with smartphone maker Palm Inc. for $1.2
billion in 2010. The company has said it was investigating ways to continue
using webOS.
Read more: http://online.wsj.com/article/SB10001424053111903352704576540982671537062.html#ixzz1Wcze2zGX |
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