Last week, I had an argument with a friend about HP’s decision to drop out of the hardware market and their attempts to shift warehouses full of unwanted HP Touchpad stock at the firesale price of £89 (or $99 in the US). I put forward the notion that, with the Touchpad launching with such tepid demand as to see global sales figures counted in the mere tens of thousands, HP decided to do something radical – create demand and swallow the cost. My friend was convinced that they were merely swallowing the cost of a failed device and getting rid of the evidence as quickly as possible.
It’s been widely reported that HP wiped 100million off their value simply by doing this, which certainly indicates a company licking it’s wounds and walking away from things as quickly as possible…but what if, in the middle of a long meeting to decide how to put the best possible spin on the disaster that was WebOS and the Touchpad, some brave executive put forward the following idea:
Let’s sell the Touchpads at a loss now but create massive interest in the device and WebOS.
Sound crazy? Maybe. But let’s look at the facts – HP have long desired to license WebOS out to partners, the problem being that no one is going to pay to put WebOS onto their hardware if there is no developer or consumer interest in the platform. If you create a market of millions of WebOS users, you do two things – create an instant audience, and get your product into the hands of people who will potentially love it and rave about it; people who you would otherwise not have engaged.
This makes perfect sense – As an original Pre owner I’ve always maintained that WebOS would be perfect on a tablet – if you can get it into the hands of the general public, they will love it and they will talk about it.
Let’s look at something else that could really demonstrate the strategic approach HP took here – total cost. Sure, they may have wiped 100million off their value by selling all their Touchpad stock at a loss…but they’re currently riding high in the tablet market place, with only the formidable iPad above them – to buy such a position within just two weeks of launch, globally, would have cost tens, if not hundreds of millions of dollars. 100million? That seems like an increasingly good deal.
I’m increasingly convinced that HP have cleverly turned what looked like a product launch disaster into something that could well place them as a major contender in the tablet and mobile market. WebOS had all the hallmarks of a fantastic platform, and now there’s the ready made audience of millions of owners who are there to spend money on apps, which will in turn attract developers, which will in turn attract licensing interest. All of that for a mere 100 million? Bargain.
HP Touchpad – the best marketing ploy ever seen?
Posted: 31st August 2011 by boboshady in Development, Digital Commentary, General Content, ProfessionalLast week, I had an argument with a friend about HP’s decision to drop out of the hardware market and their attempts to shift warehouses full of unwanted HP Touchpad stock at the firesale price of £89 (or $99 in the US). I put forward the notion that, with the Touchpad launching with such tepid demand as to see global sales figures counted in the mere tens of thousands, HP decided to do something radical – create demand and swallow the cost. My friend was convinced that they were merely swallowing the cost of a failed device and getting rid of the evidence as quickly as possible.
It’s been widely reported that HP wiped 100million off their value simply by doing this, which certainly indicates a company licking it’s wounds and walking away from things as quickly as possible…but what if, in the middle of a long meeting to decide how to put the best possible spin on the disaster that was WebOS and the Touchpad, some brave executive put forward the following idea:
Sound crazy? Maybe. But let’s look at the facts – HP have long desired to license WebOS out to partners, the problem being that no one is going to pay to put WebOS onto their hardware if there is no developer or consumer interest in the platform. If you create a market of millions of WebOS users, you do two things – create an instant audience, and get your product into the hands of people who will potentially love it and rave about it; people who you would otherwise not have engaged.
This makes perfect sense – As an original Pre owner I’ve always maintained that WebOS would be perfect on a tablet – if you can get it into the hands of the general public, they will love it and they will talk about it.
Let’s look at something else that could really demonstrate the strategic approach HP took here – total cost. Sure, they may have wiped 100million off their value by selling all their Touchpad stock at a loss…but they’re currently riding high in the tablet market place, with only the formidable iPad above them – to buy such a position within just two weeks of launch, globally, would have cost tens, if not hundreds of millions of dollars. 100million? That seems like an increasingly good deal.
I’m increasingly convinced that HP have cleverly turned what looked like a product launch disaster into something that could well place them as a major contender in the tablet and mobile market. WebOS had all the hallmarks of a fantastic platform, and now there’s the ready made audience of millions of owners who are there to spend money on apps, which will in turn attract developers, which will in turn attract licensing interest. All of that for a mere 100 million? Bargain.