$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.

PROMOTED VIDEO
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
Life and Style
ebookAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
i100
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Arts and Entertainment
arts + ents
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
Latest stories from i100
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

    Recruitment Consultant - Bristol - Computer Futures - £18-25k

    £18000 - £25000 per annum + Commission: SThree: Computer Futures are currently...

    Trainee Recruitment Consultant - Real Staffing - Leeds - £18k+

    £18000 - £27000 per annum + Commission: SThree: Sales - Trainee Recruitment Co...

    Trainee Recruitment Consultant - Manchester - Progressive Rec.

    £18000 - £23000 per annum + Commission: SThree: Progressive Recruitment are cu...

    Trainee Recruitment Consultant - Birmingham - Huxley Associates

    £18000 - £23000 per annum + Commission: SThree: Huxley Associates are currentl...

    Day In a Page

    Dress the Gaza situation up all you like, but the truth hurts

    Robert Fisk on Gaza conflict

    Dress the situation up all you like, but the truth hurts
    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

    In grandfather's footsteps

    5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
    Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

    Martha Stewart has flying robot

    The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
    Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

    Do women cyclists need 'pootling lanes'?

    Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

    The dining car makes a comeback

    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
    Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

    Gallery rage

    How are institutions tackling the discomfort of overcrowding this summer?
    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

    Eye on the prize

    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
    Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

    Women's rugby

    Tamara Taylor adds fuel to the ire in quest to land World Cup
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices