Hold on to something tight, webOS geeks. Your favorite tablet, which I can only assume is the TouchPad, might not be the last webOS tablet incarnation from HP. An HP executive and former webOS VP recently stated that the company could resurrect the TouchPad stating to Reuters, “tablet computing is a segment of the market that’s relevant, absolutely.” But let’s hope that HP’s Personal Systems Group head Todd Bradley remembers the TouchPad’s rough path to success.
Bradley is currently touring China where he’s likely putting on no less than a small circus trying to convince partners, suppliers and HP sympathizers that the company’s high revenue, high margin PC business will continue to be the top-selling brand. HP’s CEO Leo Apotheker announced earlier this month that they were considering leaving the consumer PC marketplace. This may be done by either selling or spinning off the business. Bradley dismissed claims in his Reuters interview that someone like Acer, who just reported a downturn in the second quarter of 2011, could buy the massive business. Instead, HP might spin the consumer side off into a new company.
This would require, what Bradley called, “unwinding [of] the integration” of PCs within HP and would require this new company to stand tall amid tough competition and not rely on big daddy HP during tough sales quarters. In fact resurrecting the TouchPad and expecting the same sort of buzz generated over the last couple weeks would be tough for a new company.
The TouchPad launched on July 1st but was killed just seven weeks later. We praised the tablet and the webOS operating system, but couldn’t find a reason to recommend the tablet at its $500 MSRP. That’s what an iPad costs, we said and pointed out that with Apple’s tablet you get a massive app ecosystem. The TouchPad then dropped down to $399, which didn’t exactly breed confidence in the product and we still couldn’t recommend it. But then HP canceled the TouchPad and put it on a $99 fire sale. We said Buy! Buy! Buy!
The TouchPad went from zero to hero literally overnight. Early reports place the TouchPad as currently the second best-selling tablet. Best Buy stores nationwide had people lined up to snag the $99 tablet. This came less than a week after the WSJ reported Best Buy was sitting on a massive oversupply of TouchPads. Consumers passed on the tablet when it was $400 or more. They ate it up when it dropped to less than the cost of a Kindle.
As the company stands today, HP likely has the deep pockets able to support selling a next-gen TouchPad at a slight loss where a spun-off company wouldn’t have that luxury. Selling the tablet at $99 is simply unsustainable, but with the right mixture of lower-end hardware, cloud storage, and revenue-producing content distribution, HP could potentially undercut the iPad and hit the sweet spot of $250. That’s what Amazon is primed to do with its tablet.
People like the TouchPad — read the recent online reviews — but the $99 is a big part of the judgement. It’s by far the best value tablet on the market today and hopefully HP will make another round available at the current price. But it’s not the best tablet. That title falls squarely on the $500 iPad, which dominates that price-point. If HP wants to bring back the TouchPad — even with its new-found army of foot soldiers — HP first needs to learn its lesson: Don’t go toe-to-toe with Apple. The path to victory is to win the hearts of the villages.