Is HP selling some more TouchPads to mend fences with suppliers?

carwreckby Joost J. Bakker IJmuiden

Why would HP make more TouchPads to sell at a loss?
[Via Brainstorm Tech: Technology blogs, news and analysis from Fortune Magazine » Apple 2.0]

No, they don’t plan to produce “one last run” in order to make it up in volume

TouchPads quickly sold out at $99. Source: HP

Can you spot the dissemblance in the announcement posted Monday on Hewlett-Packard’s (HPQ) The Next Bench blog?

Despite announcing an end to manufacturing webOS hardware, we have decided to produce one last run of TouchPads to meet unfulfilled demand. We don’t know exactly when these units will be available or how many we’ll get, and we can’t promise we’ll have enough for everyone. We do know that it will be at least a few weeks before you can purchase.

That’s right. It’s there in the first sentence. HP management has made some monumental blunders lately, but it knows better than to sell product at a loss just to “meet unfulfilled demand.”

There may be a lot of reasons — although as an Apple (AAPL) iPad owner I can’t think of any good ones — to buy a $499 orphaned device when its price suddenly drops to $99.


Digitimes reported that the reason was that HP had contracts with its suppliers who had already stockpiled enough parts for 100,000 tablets. I would expect that those contracts are designed so that the suppliers do not have to eat the entire cost.

So, to recoup what HP may owe its suppliers for creating the inventory that HP pulled the pug on, HP will have them make one more run of perhaps 100,000 tablets.

Quite an expensive decision to make so precipitously. HP must have run the numbers and seen a huge cliff ahead if it did not put on the brakes.

Of course, it essentially totaled the car, as HP now moves out of the PC business.