Aug 21, 2011

The future of the HP Touchpad: pricing, development, apps, and more

Following HP's decision to discontinue the Touchpad and WebOS, an epic thread began at SlickDeals on Friday night. The discussion surrounded various retailers' plans to liquidate Touchpad inventory - $99 for the 16GB and $149 for the 32GB. These prices were well below the MSRPs of $499/599 and none of the other tablets (Tab, Iconia, Transformer, Xoom, and even the meager Thrive) could even come close to these prices, even on Black Friday. You can't even get a used iPad for close to $99.

The bargain hunting crowds from SD soon overwhelmed the various retailers - HP's own site was the first to start clearing out Touchpads and its systems were quickly brought to their knees. Woe to the admin who arrives at work on Monday morning to find a smoldering heap in the server room. Rumors then quickly spread about other vendors who might offer the Touchpad - Best Buy was the subject of much speculation after their Canadian affiliate began offering units at firesale prices. DataVis had over 6,000 units in stock but it's website was also brought down - they quickly regrouped and posted them on eBay, where the entire lot sold out in less than 15 minutes. Amazon was slow to respond, but offered Touchpads as Gold Box discounted items on Sunday for a lucky few who happened to refresh the page at exactly the right moment. Best Buy initially claimed to be returning all Touchpad stock to HP, but revealed late on Saturday that it would start selling them as closeouts with no returns. Many who had tried to pick up a deal in the store were turned away earlier in the day. Massive traffic then hit as hordes of people requested units for in-store pickup. Most stores had closed by this time on the east coast, so shoppers headed to the stores first thing on Sunday morning to try to claim their reserved unit. Disappointment struck again as communication had broken down between, corporate, and the stores - so many stores just started selling their stock to whomever happened to be first in line. Later on Sunday afternoon, eCost's website melted down after they appeared to be selling them at the discounted price.

As for myself, I ordered a 16GB unit on Saturday for $399 from Amazon with the expectation that they would cut the price in the next few days. With Amazon's no hassle returns, the worst case was that I would be out a few bucks. Fortunately, my order shipped on Sunday for delivery on Tuesday (thanks Prime!) and the online customer service rep quickly refunded $300 to my credit card. Normally Amazon does not price match or offer price protection, but they really had no choice in this case.

No one knows exactly how many Touchpads will be released once all the clearance sales are complete, or if the $99/$149 prices will hold. Estimates have put the number of units manufactured in the 250,000-500,000 range. Many of those buying the units this weekend intended to flip them for a quick profit, and completed eBay sales were still touching $300 through the weekend. Craigslist was also flooded with potential sellers, and a few WTBs. Once sanity is restored to the market, it's doubtful that the Touchpads will continue to demand a premium and may even sell below their clearance prices due to the small installed user base and lack of formal support for the software. Today is the peak of the HP Touchpad bubble.

This is not to say that development for the Touchpad will stop - it will simply move from HP to the informal channel of developers that is constantly looking for new hardware to root. With HP's history of quasi-support for open source software, I expect they'll publish many of the specs for the tablet before winding down WebOS completely. There's also a good chance that Android developers will complete a port of Google's software to the Touchpad, greatly expanding the universe of applications that will run on it.

All of this will play out over the coming months, but the biggest unknown is - when will HP stop running those awful commercials touting the Touchpad with its $399 price tag?

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