HP’s New Strategy and Firesale Fiasco
News came down last week that HP was looking to “Evaluate Strategic Alternatives” for their Personal Systems Group (PSG). The personal systems group includes business and consumer PCs, mobile computing devices and workstations. This would include Business desktops and laptops, consumer desktops and laptops, and all WebOS-based devices.
HP has laid out a couple of different strategies for their PSG. The first includes spinning it off into it’s own separate company. The second would potentially be selling that part of their business to another company like Lenovo, Samsung, or even Acer or Dell. HP did not specifically mention any companies that could potentially purchase HP’s PSG, but there are only so many manufacturers.
Any company that bought HP’s PSG would immediately benefit from HP’s massive foothold in the consumer market as well as their retail distribution partners. HP is considered the #1 manufacturer worldwide of laptops. HP has determined that PCs are no longer a viable-enough business to continue supporting the business with other ventures.
With the decision to rid itself of the Personal Systems Group also comes a firesale of the existing stock of WebOS devices; specifically the HP TouchPad. As soon as retailers were given the go ahead they dropped the prices of the two TouchPad models to $99 for the 16GB and $149 for the 32GB model. This set of a firestorm of consumers looking to grab a tablet device on the cheap.
Many retailers were sold out within hours. Some retailers did not even drop their prices (I’m looking at you TigerDirect) and would not price match either. There were some online retailers who still have stock, but have not dropped the price (as of this writing).
I actually have a personal story regarding the TouchPad. I had called around to several Walmart stores in the area to inquire about their HP TouchPad stock. I found one store that had two when I called. I immediately drove to the store. Upon arriving I saw a gentleman who was walking at a somewhat fast pace and I knew he was going to try and get a Touchpad. He briefly talked to the Manager, who was walking past, and the manager said there was only one TouchPad left. We both ran and arrived at the same time.
Since there was only one TouchPad left we had to decide who was going to be the one to purchase it. We discussed it for a few minutes and ultimately I decided that he should have it. Why, you may ask. Because he didn’t want just a tablet, he wanted the TouchPad specifically. To be honest I felt a bit defeated, but still glad since I performed a nice gesture to let somebody else get something that they actually wanted. I did need to grab some items, so I did so and left Walmart.
After returning home I decided to start looking at online retailers who might still have TouchPads available for purchase. I did manage to find one, not through a link or any means except my own thought process.
I had to spent 2.5 Hours dealing with the site going up and down and getting the following error:
Microsoft VBScript compilation error ’800a03e9′
Out of memory
/LM/W3SVC/600510919/Root/dstore/global.asa, line 0
Eventually though I was able to successfully place an order. It cost me a bit too much for shipping, but I guess I rather pay a bit more for shipping and get the item than not get it. I am not 100% sure what I am going to do with it, should it actually arrive. I may keep it for myself or I may even give it to somebody.
If I do actually receive the TouchPad and decide to keep it for myself I may put up a review.
What caused such a frenzy and scurry to get a discontinued product? Marketing. Letting it be known that your product is actually available and at a bargain price. I am not saying that HP should have sold every tablet at such a drastically reduced price but look what it managed to do for sales. HP will most likely have only a few hundred TouchPads left, for warranty repairs and the like, instead of the hundreds of thousands that they were sitting on.
I know HP needed to make money off of the product, but selling it at a razor thin margin may have gotten more people to purchase the product. We will see if there is enough consumer demand to keep the product around or convince HP to continue to support WebOS. If they choose to not support it, at least allow it to go into the Open Source Community so others can continue to maintain it.
Source: HP Newsroom