Last ever batch of TouchPads isn't coming to Blighty Brits hoping for a cheap fondle won't get one from HP, as the final production run of the TouchPad will be bound for North America only. We knew one more production run was planned, but mobot.net managed to get official word out of HP that the slabs coming off the production line won't make it to this side of the pond, so …
Why on earth would a company, how ever self destructive, do another production run to sell a product at a loss?
I can understand the logic of dumping the original batch cheap, warehouse space costs money, and it's better for a company's image that a dumped product is "lost" quickly, than sit unwanted in a shop window going yellow with age, but doing another run? WTF?
Read somewhere earlier today that their killing off the line had caused some arguments with their suppliers due to stockpiled parts for it. It could be that theyve got the parts already paid for or already in some kind of contract so they may as well get SOMETHING for it than write off the entire cost of parts.
Whereas completing the production run so the items are usable means they can be chucked for merely fire-sale prices.
I doubt this run was started *after* the product was abandoned, unless HP had some ruinously expensive termination clauses with their manufacturers. Which seems unlikely.
When building a device you have to forecast sales and make contracts for supply of parts. It's possible HP has a warehouse of Touchpad parts and their options for getting rid are limited.
It's possible that it's cheaper to build them into Touchpads and sell them for firesale prices than it is to write off the parts and take a complete loss.
Let's say for example that they have a parts cost of $100. If HP has materials for a batch of 100 left over, or the parts have already been shipped, or the supplier has a contract HP can't wiggle out of, then HP's options are:
1. dump the parts anyway - loss: $1,000.
2. re-sell the parts as parts, if they're lucky getting half their money back - loss: $500
3. put them together and sell them for $99 - loss: (well, it depends on the assembly, shipping, and ancillary costs, but if they add up to less than $49 per item in this example, the loss will be less than $500.)
Now these numbers are fictional, but HP has the real ones, and I'd guess they ran through them and found that option 3 was the best of a set of bad options.
When you manufacture things in the far east, you sometimes consider that the 6 weeks or so on a boat is a part of the manufacturing process (sometimes things will be ordered Delivered Duty Paid). Apart from the possibility of part manufactured items, maybe there are some in the pipeline somewhere already.
Possibly someone in HP with no idea at all (so it could be everyone in HP!) didn't realise that they would sell out like hot cakes once they put an even less than reasonable price on them, and no-one considered them all selling out before the next batch arrived.
Because the parts in their present condition are WEEE. If HP *don't* assemble them into finished goods, they'll have to pay somebody to get rid of them. At least if they do one last production run, they'll be able to offset some of the costs, the disposal becomes somebody else's problem -- and the hit they're taking is probably less than what a recycling merchant is going to charge.
Also, there are cunning stunts you can pull with regard to taxes and losses.
@ 99 squids I was prepared to splash out as I read a lot of ebooks and even if thats all I used it for that was a decent price, add in the chance to androidize it and it became a no brainer. To the price points of the rest though they can bite my shiny metal touchpad.
I'm sure there's a bunch of folks that'd be more than happy to trade a cheap TP for a cheap pre3. It's very difficult to get a pre3 outside of the UK with almost all resellers unable to get their hands on stock (and there is a lot of stock). Entry level pricing seems to start at around $5-600 now. I bought one yesterday for $750 (after shipping etc), hope I get it.
I'm still waiting for my 4 TPs to ship that I ordered on the 21st direct from HP. I ordered a 5th on the 22nd and apparently that will arrive today but it's strange to me HP would process the order out of order.
So let me get this straight - the original price was $400 US, and the reverse-engineers said that they cost about $300 to make. If that's true (and I'm only going by press reports at release), then it seems to me they would make a lot more money if they sold off the parts than assembling them and losing $200 on each one at retail.
On the other hand, if the production run was already underway and the pricey components like the processors and flash memory are already wave soldered onto the boards, then I guess you've got no choice, it's not like they're going to sit there with gobs of CHIPQIK and unsolder all the pieces to resell them.
Gripping hand, I guess saying you sold out of two production runs gives you SOME pretty words to put on your quarterly statement, and having a bunch of these units loose in the world gives you some real life experience with how WebOS performs and that may be worth taking a loss in the short term if the data is useful for when they make WebOS toasters or whatever. It also avoids the publication of pictures of them in a landfill like atari cartridges of E.T.
Chances are after the screen and battery the most expensive component could easily be the SoC that runs the thing. That SoC could be a custom batch for HP and so challenging to resell.
The production is likely to be the toughest area, they could have committed to their EMS provider to manufacture a certain volume and on that basis the contract was formed. All the other components are commodity and could even go back on the shelf because it ismlikely that HP didn't purchase the secondary components themselves but the EMS provider managed the procurement.
You are confusing reality with HP.com
You are the worlds most respected maker of test and measurement products. So you rename that bit to something that sounds like a skin cream and flog it off.
You are the famous name in pocket calculators so you stop making them.
You buy up every other minicomputer maker but still have them compete internally. So you have competing offices selling HPs with NT, HPUX, VMS, NonStop, Tru64 but not Linux which is all anyone wants.
You are the worlds largest maker of PCs so you decide to get out of the PC+server business. But then make a bunch of contradictory announcements that you might or might not.
You signal your launch into being a services consultancy by suing the maker of the most popular DB for not supporting the PCs you are abandoning to become a services consultancy.
I think somebody has been drinking the inkjet ink
I think "Agilent" sounds more like a social anxiety medication.
Maybe you're right and looking for anything resembling Earth Logic is misguided, but there has to be SOME way they are trying to spin this, or they're going to get shareholders suing the board for mismanagement. Of course, that is probably going to happen anyway - they just made $400 million disappear in just a few weeks.
You might add,
You buy up a number of very respected consultancies, pink slip/P45 most ofthe best people.
You run managed services on behalf of some major companies like a total dork. The people you employ don't know HPUX from Windows.
You say you can service pretty well any make of kit yet fail to understand IBM X series (Intel CPU) Servers Bleep codes despite being given the documentation.
But my early 1980's DataScope still works perfectly.
HP-Sux really.
Are they really still selling that, I thought they killed DEC Alpha's? Please someone post a link, I need laugh!
Ah, so that's what drinking inkjet ink does to you. Oh talking of inkjets, HP region code their printers so that they won't accept cartridges from another region! They did kindly give me the code required to make my printer UK friendly from being UAE friendly. Had to waste an ink cartridge though, as it insisted on having both a colour and a black cartridge, whose region codes matched.
ishop-america.com
Shipping is a little expensive but in total it'll cost about £145 for the top model from Best Buy US including the shipping. Tax etc will cost extra though so, about 30 / 40 quid if you realllllly want one.
- It may seem like a bargain, but the price is reduced because no-one wanted one or needed one-
There is another possible gain in selling off assembled parts at a loss - the rush to get hold of a Touchpad has come as a surprise to HP, but, having, albeit accidentally, created a public "desire" for them, they are now in a position to sell off the division to the likes of Samsung. And the more - now highly desireable - Touchpads that are out there the more they may be able to get in a sale.
(Gloat: my 32G Touchpad, ordered from FNAC, arrived here in the west of Ireland (God bless the euro!) this afternoon -- hence the pint).
...we are even, I guess. :)
Speaking of Pre 3: I am willing to trade a 16GB Touchpad for a brand new, unlocked/retail Pre 3 and even willing to thrown in a Touchstone Dock for TP (uni adapter!) if you do the same for the Pre 3 (Touchstone Docking Kit for Pre, that is.)
I mean, managmenet seemed to have no idea that the Touchpad would fail at $400, depsite lots of early reviews indicating that the software was not fully tuned and needed a 1.1 release to fix.
Then dumping it on the market for less than people were willling to pay..you don't need a Phd in economics to have figured out that they probably could have sold them all at 25% more.. and made significantly less loss.
Obvious (and not just in hindsight) thing to have done, would have been to sold the first run at a little below cost ($200-$300?) and established the brand and WebOS ecosystem. HP must have mastered the art of getting PC's to customers at the least possible cost, so within a year or so would no doubt have got the cost of the build down to the point where they made money. In particular if they used the business channel and got the Touchpad into companies as a device suitable for vertical markets.
> You buy up every other minicomputer maker but still have them compete internally. So you have competing offices selling HPs with ..., VMS, ... but not Linux which is all anyone wants.
Plenty of people would be delighted to run VMS on x86 but having to raid fleabay for some clunky old alpha is just too much hassle.
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