HP Channel Partners Left Sitting On TouchPads

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Retailers offering the TouchPad are wondering what to do with their stock, as HP tries to reassure customers

Resellers are desperate to get shot of HP TouchPad tablets, following the company’s shock announcement last week that it is shutting down its WebOS hardware division.

The TouchPad, which was launched by HP in the US on 1 July and in the UK on 15 July, was on the market for less than two months before the company decided to pull the plug on the platform. This is despite significant interest from the industry and earlier suggestions from CEO Leo Apotheker that webOS would be running on all HP PCs in 2012. Of course, HP also announced last week that it is planning to spin off its PC business.

Drastic measures

Now HP has slashed the US price of the TouchPad – once billed as a viable competitor to Apple’s iPad – to $99 (£60) and $149 (£90) for its 16GB and 32GB versions, down from their original price tags of $499 (£302) and $599 (£363) respectively. This follows earlier price cuts just six weeks after the arrival of the TouchPad, as a result of weak sales. British prices have remained stubbornly high, but are expected to fall before long.

This leaves HP’s channel partners in a bit of a pickle – with many of them holding large stocks of what is effectively a dead product. US electronics retailer Best Buy, which is reportedly sitting on more than 200,000 TouchPads, initially called on the vendor to take back its stock, but has apparently been refused, as it is now selling the devices again at a reduced rate.

TechMarketView analyst Richard Holway told Microscope magazine that the channel should not have to suffer for a strategic decision made by HP. “If I was them I’d be demanding that stock was taken back on the basis that who on earth is going to buy a discontinued product?” said Holway.

In an attempt to reassure customers, HP’s senior vice president Stephen DeWitt told Bloomberg that the company will continue to stand by webOS, and is considering partnerships and licensing deals with manufacturers that may use the software in their devices. “The webOS is not dead,” he said. “We’re going to continue to evolve it, update and support it.”

Poor sales figures

The news that HP has been struggling to flog its TouchPad tablets first emerged when an internal report was leaked, highlighting flagging sales at Best Buy stores in North America. This was apparently causing tension between HP and Best Buy executives. “HP, for its part, is pleading with Best Buy to be patient,” one source told AllThingsD at the time.

HP’s decision to ditch its entire mobile operation is nevertheless surprising, given that HP paid $1.2 billion for smartphone maker Palm (creator of webOS) last year. The acquisition was supposed to provide the foundation for a line of compelling mobile phone and tablet devices – and HP seemed to have made a solid start, with both the TouchPad and the Pre 3 receiving positive reviews.

Meanwhile, Microsoft has wasted no time in making a play for developers left in limbo by the disbanding of HP’s webOS hardware division. Brandon Watson, the director in charge of developers for Microsoft’s Windows Phone platform, tweeted on Friday: “To any published webOS devs: we’ll give you what you need to be successful on #WindowsPhone, including free phones, dev tools, and training, etc.”

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