Rhodri Marsden: The lesson is: be careful if you take on Apple

Click to follow
The Independent Online

Illustrating basic laws of economics doesn't have to be dull; all you need to spice things up is a bit of corporate blundering. Hewlett Packard had made extravagant predictions of the demand for its tablet computer, but the TouchPad was greeted with barely perceptible shrugs of indifference.

HP's almost petulant decision to pull out of the market and sell off Touchpads for $99 was odd – but not as odd as its statement that it was "pleasantly surprised" by the subsequent demand for them.

We're now in the bizarre position where TouchPads are sufficiently scarce to be selling on eBay for twice the price they were bought at during the sale. HP has been tempted to produce another run, and is now openly optimistic about a spin-off plan for its mobile computing division.

It's entertaining to imagine the intense conversations that must be occurring at the highest levels of HP, but the drop of its share price by 50 per cent in a year is an indication that not everyone is finding it funny. The wider lessons from the short life of the TouchPad probably surround management and strategy, but one lesson can be delivered in bullet-point form: don't launch inferior copies of Apple products and expect people to pay the same price. Expect them to pay about a fifth.