30 August 2011

Don't know when to lie down and die

Reuters has an article about HP resurrecting (probably the right word) the TouchPad:
Hewlett-Packard plans to crank out "one last run" of TouchPads, days after declaring it will kill off a line of tablets that failed to challenge Apple's command of the booming market.
A day after the chief of HP's personal devices division told Reuters that the TouchPad might get a second lease on life, HP announced a temporary about-face on the gadget after being "pleasantly surprised" by the outsized demand generated by a weekend fire-sale. HP slashed the price of its tablet to $99 from $399 and $499 the weekend after announcing the TouchPad's demise on 18 August, part of a raft of decisions intended to move HP away from the consumer and focus on enterprise clientele.
That ignited an online frenzy and long lines at retailers as bargain-hunters chased down a gadget that had been on store shelves just six weeks. "The speed at which it disappeared from inventory has been stunning," the company said. "We have decided to produce one last run of TouchPads to meet unfulfilled demand."
HP may lose money on every TouchPad in its final production run. According to IHS iSuppli's preliminary estimates, the 32GB version carries a bill of materials of $318. "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," HP said in a blogpost.
Critics have blasted HP for wavering on pivotal decisions, such as its original stated intention to integrate its webOS software into every device it makes, followed by a decision to stop making webOS gadgets, including the TouchPad. The storied Silicon Valley giant is struggling to shore up margins as smartphones and tablets eat away at its core PC business, the world's largest. On 18 August, HP said it was also considering spinning off the PC division.
CEO Leo Apotheker is under immense pressure from investors unhappy with HP's back-and-forth on strategy. The former SAP chief has also been forced to slash HP's sales estimates three times since he took over last November. In a resounding rejection of his grand vision, shareholders sent HP shares down almost twenty percent the day it announced its sweeping moves, which included a pricey acquisition of software player Autonomy. That wiped out sixteen billion dollars of value from HP, in the stock's worst single-day fall since the Black Monday stock market crash in October of 1987.
HP declined to comment beyond the blogpost. Shares in the company were down marginally in after-hours trading on Tuesday.
Rico says a 'personal devices division' ought to be making vibrators, not computers. But 'losing money on every TouchPad'? That's like the old joke about only losing a buck on each piece, but making it up on the volume...

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