Just days after we reported Hewlett-Packard (H-P) would Dump The PC business, they have decided to do another run of TouchPads.
Well, buyers went crazy and the stores sold out overnight, prompting the H-P execs place another order with their supplier.
Despite the fact that it costs over $300 per unit to manufacture, and they will lose $200 per sale, H-P figures “What the Heck” let’s do it anyway.
Now I can understand the Loss Leader concept, actually it’s a great marketing ploy, as long as you have a “Back End” in place, to profit from the customer over the long term.
When the TouchPad Tablet, running their proprietary WebOS first went on sale in July, they made little dent in Apple Inc.’s iPad dominance of the tablet market. After a 20% price drop, H-P execs decided sales were too weak to justify a continued investment, and decided to drop the product line. Then H-P created a TouchPad frenzy when it dropped the price.
Now, they didn’t say what they would charge for the new batch of TouchPads, but warned there might not be enough to go around.
H-P spokesman Mark Budgell said “We don’t know exactly when these units will be available or how many we’ll get. We can’t promise we’ll have enough for everyone.”Although, the company said it is pleased by the response it has gotten so far.
H-P still plans to “Spin Off” the computer business, and took out a full page ad in Wall St Journal, to explain their position.