HP Discovers The Wonderful Power Of Scarcity, And The TouchPad Lives On

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Hot damn, I want one of those HP TouchPad tablets. Why? Because they’re sold out!

Perception of scarcity is a fascinating human condition. It’s one of the first things we learn as children – that running towards something is usually a guarantee that you won’t get it. But act like you don’t want something, and it’ll come running to you. The creation of the perception of scarcity is a winning, if shallow, tactic in most human relationships.

And finally HP has its day. In July HP couldn’t sell a TouchPad tablet despite having distribution deals with Best Buy and other major retailers. Apple had sucked all the oxygen out of the tablet market. HP offered its inferior product at the same price as the iPad. But consumers weren’t fooled. No one wants a Dodge at a Cadillac price.

But drop that price down to $100 and let people know that they better move quick to get one of the last TouchPads and the perception of scarcity kicks in. The units fly off the shelves. And I argued that HP should keep on making them and fulfilling that demand, even at a small loss per unit:

I say to HP – KEEP MAKING TOUCHPADS, as fast as you can. See what the demand curve looks like at $200, and watch the app developers suddenly get crazy excited about WebOS again. You may have a huge hit on your hands, and a bunch of lemonade from all those lemons.

Today the company made another smart move – they’re going to do another limited run of TouchPads.

Why? Some people are saying that HP probably has volume commitments and this is cheaper than just not building and selling the units at all. The company certainly may have made volume commitments, but my guess is they could have gotten out of those contracts given how much other business they send the factories. Also, why stoke the PR fire again when the TouchPad embarrassment is almost behind you?

Nope, they’re just messing with us, and taking another hit on the scarcity bong.

It feels so good.

People want us.

They really, really want us!

The company is already hinting that the TouchPad may live again [editor’s note: awesome]. But while they’re figuring that out one way or another, what better way to keep everyone excited than to create just a few more TouchPads (scarcity!) and sell them in “at least a few weeks.” Now everyone is waiting, with breath appropriately bated, for those hard to get new units. The press will try to figure out the date and location when the TouchPads go on sale. Previously unenthusiastic retailers are making anxious calls to try to lock down as many units as they can. I expect Robert Scoble will be waiting out front of Best Buy the day before, along with a few other hard core TouchPad fans.

I can sense the giddiness at HP.

Here’s another interesting data point. TouchPads are going for about $300 on ebay right now. That’s a market clearing price – people who have them need to get rid of them fairly quickly, and they seem to be doing just that at around $300. Which just happens to be about the manufacturing cost of the TouchPad.

So hell yes they’re going to keep making these things. They can dominate the mid market for tablets, the place Android was planning on settling in at after their first prime time push. After Q4 HP will announce another batch of TouchPad’s will be built, just in time for the holidays, to meet more of that pent up consumer demand. Or the PC spinoff of HP will do it. Someone will. Because selling a device at cost and then bringing in the revenue through the app store is a proven and lucrative business model.

This is the best marketing money can buy. HP finally has a hit product and people lining up to buy it. It doesn’t get any better than this.