LEARNING FROM THE DEMISE OF HP’S TOUCHPAD

What a week for changes in major companies

• Google buys Motorola Mobility for $12.5 billion (US)
• HP discontinues their weeks-old TouchPad tablet
• HP looks at exiting the PC market

We’ll focus on HP’s flip flopping.

HP's TouchPad Tablet

There are two major operating systems for tablets and smartphones: Apple iOS and Google Android. Rather than use Android for free, HP decided to spend $1.2 billion to buy Palm last year and get WebOS. The heavily hyped TouchPad launched last month and quickly flopped. HP is already shutting down that division, which also made smartphones.

Best Buy wants to return 240,000 unsold units to HP which might crush and bury them in the desert as Apple and Atari have in the past. This might cost HP $100 million (US). Right now, they’re trying fire sale prices as low as $99. How would you feel if you pay $500 or more weeks earlier?

HP is the world’s largest PC maker but they are looking at selling their low margin PC division. That’s a major change too. HP needs to sell about seven PCs to match the profits of one Mac. This is further proof that we don’t buy on price.

RIM Too

RIM decided to scrap their Blackberry operating system but the replacement (QNX) won’t ship until 2012. For now, RIM just launched several improved but lackluster new Blackberries.

The Playbook tablet has also flopped but RIM is still unwilling to admit this. They may have shipped 500,000 but it looks like about half are unsold. The Playbook isn’t even in the top 5 tablets. Imagine needing to connect your Playbook to your Blackberry phone just to get email. What were they thinking?

History Repeats

The sad part is that Palm was the leader in mobile devices until they married phones and gave birth to smartphones. RIM then ruled the high end as mobile email and security became essentials. For some reason, HP decided to become the #1 PC maker in the world. They did. Now they’re looking at leaving for the same reason as IBM in 2004: low profits.

At the time, there were glowing articles about the "foolproof" strategies that the likes of HP and RIM were pursuing. Also sad is that good people at those companies lose their "safe" jobs because of bad bets made by a few.

Bad Decisions

Even the biggest companies falter, especially when successful and making profits.

Do you remember when Dell wore the halo? They were considered the best until buyers saw computers as commodities and opted for elegant designs. That's Apple's strength. Do you have a Dell music player, smartphone or tablet? If you do, how satisfied are you? If price wasn't a consideration, would you have chosen to Think Different?

The iPad already brings in more revenue than all of Dell’s consumer PC business.

We’re fickle. In recent years, there was a shift towards netbooks but they’re now boring commodities. Next year tablet sales are expected to take the lead.

Lessons

Who would buy an HP tablet now (unless at a give-away price)? How would you feel if you bought one at full price and told everyone your TouchPad was better than an iPad?

HP is admitting major past and current mistakes. What about you? Is it time to acknowledge some failures and move on?

Podcast 131 (4:58)

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Links

• RIP, TouchPad. Can any non-iPad tablet survive — ever? (CNN Money, Aug 22, 2011) (new)
• HP’s TouchPad is officially a bomb: Best Buy wants HP to take them back (Business Insider, Aug 16, 2011)
• HP TouchPads to be dumped in landfill? (PC Advisor, Aug 19, 2011)
• HP eats $100 million charge to cover unsold stockpile of TouchPads (Apple Insider, Aug 18, 2011)
• Apple may make more profit from one Mac than HP does from 7 PCs (Apple Insider, June 24, 2011)
• HP begins TouchPad clearance with $99 fire sale (Apple Insider, Aug 19, 2011)
• HP to buy Palm, shake up the mobile world (PC World, Apr 2010)
• People only want iPads (Business Insider, Aug 19, 2011)
• RIM risks Playbook repeat with QNX (Forbes, Aug 13, 2011)
• As PCs wane, companies look to tablets (New York Times, Aug 19, 2011)
• What does HP’s PC purge mean for computer users? (The Guardian, Aug 19, 2011)
• HP explores quitting computers as profits slide (Wall Street Journal, Aug 19, 2011)
• uApple: the iPad shows how you can be like Apple
• Are you more like Apple, Google or Microsoft?
• Why you can’t and don’t buy on price

PS We got our second iPad last week.