$300 to make, on sale for $99: why is HP in the tablet business?

 

It was the product which wasn't meant to be. Designed to rival Apple's phenomenally successful iPad, Hewlett Packard's TouchPad was launched exactly two months ago, and met with the sort of reception of which retail nightmares are made.

A mere 12,000 were sold in the first month of European release, a figure which fell even further in the weeks that followed. After seven weeks, it was announced that the TouchPad would be discontinued – a humiliating retreat by an already ailing company.

But when retailers were told they could sell the remaining tablets at a quarter of the original price – $99, instead of the iPad price-matching $399 and $499 – the TouchPad's fortunes began to magically turn around. The sum was not enough to cover manufacturing costs, but was sufficient to prompt a buying bonanza. Cut-price TouchPads flew off the shelves, with lengthy queues forming outside stockists and websites experiencing frenzied demand.

So it was that Hewlett Packard yesterday found itself performing yet another U-turn. In an entry posted on the company's blog, it announced that after being "pleasantly surprised" by sales of the cut-price tablet, it would be returning the TouchPad to the market on a temporary basis.

"The speed at which it disappeared from inventory has been stunning," the statement explained. "We have decided to produce one last run of TouchPads to meet unfulfilled demand." The run will be limited to North American retailers only, and will last for only a few weeks.

There is, however, one fatal flaw in the plan. As technology bloggers have been quick to point out, the $99 TouchPads may be popular, but they're still not going to be profitable. Given the lofty cost of production, Hewlett Packard is thought to be losing some $200 on every device sold.

Why, then, they have decided to embrace the loss-making product is the subject of some speculation. Reports from Taiwan indicate that it may have to do with surplus parts held by manufacturers, while others have suggested the move is an attempt to garner a few positive headlines after months of negative press.

Whatever the reason, HP's reversal isn't quite proving the PR coup the company may have hoped. Critics have described it as "a triumph of madness over common sense", arguing that it adds to their reputation for indecision.

Meanwhile enterprising punters were merrily re-selling their bargain-bin TouchPads at double the price yesterday.

Next up – Amazon?

Amazon could soon be launching a7in tablet computer to rival the iPad, according to reports. Citing anonymous sources in "upstream component suppliers," DigiTimes magazine said the tablet would start shipping next month, and would be followed by a 10in version early next year.

The report in the Taiwanese magazine, known for its close links to suppliers of hi-tech components, adds weight to rumours that Amazon is soon to enter the market currently dominated by Apple's iPad.

While the company has not yet confirmed anything, CEO Jeff Bezos said customers should "stay tuned" when asked in May about the possibility of a product launch.

News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Sport
Louis van Gaal watches over Nani
transfers
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
PROMOTED VIDEO
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
transfersColombian World Cup star completes £63m move to Spain
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Project Coordinator/Order Entry, SC Clear

    £100 - £110 per day: Orgtel: Project Coordinator/Order Entry Hampshire

    C# Developer

    £35000 - £50000 per annum + benefits: Progressive Recruitment: My client is lo...

    SAP FICO CONSULTANT - LONDON

    £55000 - £65000 per annum + Benefits: Progressive Recruitment: SENIOR SAP FICO...

    SAP BI/BO CONSULTANT

    £60000 - £70000 per annum + Benefits: Progressive Recruitment: SAP BI CONSULTA...

    Day In a Page

    Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

    Noel Fielding's 'Luxury Comedy'

    A land of the outright bizarre
    What are the worst 'Word Crimes'?

    What are the worst 'Word Crimes'?

    ‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
    Can Secret Cinema sell 80,000 'Back to the Future' tickets?

    The worst kept secret in cinema

    A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
    Facebook: The new hatched, matched and dispatched

    The new hatched, matched and dispatched

    Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
    Why do we have blood types?

    Are you my type?

    All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
    Honesty box hotels: You decide how much you pay

    Honesty box hotels

    Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
    Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

    Michael Jamieson: Why weight of pressure rests easy on his shoulders

    The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
    Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

    The 'scroungers’ fight back

    The welfare claimants battling to alter stereotypes
    Amazing video shows Nasa 'flame extinguishment experiment' in action

    Fireballs in space

    Amazing video shows Nasa's 'flame extinguishment experiment' in action
    A Bible for billionaires

    A Bible for billionaires

    Find out why America's richest men are reading John Brookes
    Paranoid parenting is on the rise - and our children are suffering because of it

    Paranoid parenting is on the rise

    And our children are suffering because of it
    For sale: Island where the Magna Carta was sealed

    Magna Carta Island goes on sale

    Yours for a cool £4m
    Phone hacking scandal special report: The slide into crime at the 'News of the World'

    The hacker's tale: the slide into crime at the 'News of the World'

    Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
    We flinch, but there are degrees of paedophilia

    We flinch, but there are degrees of paedophilia

    Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
    The truth about conspiracy theories is that some require considering

    The truth about conspiracy theories is that some require considering

    For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn