HP: We’re Producing One Last Run Of TouchPads To Meet Demand

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Ten days ago, HP announced that it was going to be liquidating its abruptly-discontinued TouchPad, the WebOS-powered iPad competitor that launched early this summer. When it first launched the device was going for $500; a later price drop to $400 didn’t do much to help sales. But the liquidation sale sure did. The new pricetag: $99.

All TouchPads available from both HP and retailers alike were sold out within a day or two. And since then, technophiles eager to get in on the deal have been refreshing their inboxes, Twitter feeds, and HP’s websites to find out when the remainder of HP’s unsold inventory would become available.

HP just announced its answer: not for a few weeks. But there’s some good news: instead of simply emptying out its warehouses, HP is actually going to manufacture a run of TouchPads to meet demand.

HP doesn’t explicitly say that the new run of TouchPads will also be sold at $99. But a later question in the FAQ still references that price, so it seems like it may still be in place.

If that is indeed the case, HP is likely taking a significant loss on every device sold (iSuppli pegged the cost of each unit at $318 — I doubt they’re spot on, but if they’re even in the right ballpark, HP is taking a loss). There’s an argument that HP might simply be willing to pay its way to a substantial tablet marketshare to spur a stronger WebOS ecosystems and more devices in the future. But that could be a very expensive tactic.

Alternatively, this might be a way to help build goodwill in the community, though now that HP is getting out of the consumer PC business, it seems like this wouldn’t be HP’s biggest priority.

Update: As pointed out in the comments, another strong possibility is that HP either has, or has committed to buying, a certain number of TouchPad parts, and that it might make more sense for them to assemble and sell them than to scrap them.

Finally, as TC editor Michael Arrington proposed last week, it’s possible that HP will find a way to churn these out for a much lower price than everyone expects, perhaps by sacrificing screen quality. People have shown that they’re willing to cough up $100, maybe even $200, for a device that doesn’t come from Apple — if HP could get a device in that sweetspot, then make additional revenue through content and app sales, it could have a hit on its hands. Then again, if HP had figured out a way to pull this off, then they wouldn’t be selling the devices in a limited run.

Either way, I’m in for one as soon as they go on sale.

From the HP blog, which is currently bogged down by a ton of traffic:

Q: When is HP getting more HP TouchPads? One week, two weeks, a month?
A limited supply are coming and it will be a few weeks before they are available. As we know more about how, when, and where TouchPads will be available, we will communicate that here and through email to those who requested notification. We can tell you that HP’s Small and Medium Business team has sold out of HP TouchPads and will not have more inventory.

Q: Can you comment on whether HP had to manufacture more to meet the recent demand?
HP will be manufacturing a limited quantity of TouchPads with webOS during our fourth fiscal quarter 2011, which ends October 31.

Q: Will HP continue to make more TouchPads with webOS to meet the demand?
HP is discontinuing the development of webOS devices and is winding down device operations within our fourth fiscal quarter 2011.