Mobile OS optimize

HP loses $206 per TouchPad during fire sale

By slashing the TouchPad's price, HP hopes to work off unsold inventory and cut its losses. Here's a look at what the company loses on each unit.

HP dropped two bombshells last week. The company will spin off its PC unit and discontinue production of WebOS devices, specifically the TouchPad and WebOS phones. You can read Jason Hiner's obituary of the TouchPad on his Tech Sanity Check blog.

In an effort to unload the existing TouchPad inventory, HP slashed the ill-fated tablet's price to fire-sale levels. A 16GB TouchPad (originally priced at $499.99) could be purchased for $99.99, and a 32GB model (originally priced at $599.99) was going for $149.99. At these rock-bottom prices, buyers rushed to snatch up the remaining TouchPads. Demand was so heavy, HP's Web site couldn't handle the traffic and most retailers sold out within a few days.

So just how much money is HP losing on each TouchPad? Market research firm iSuppli estimates that each 16GB HP TouchPad costs $306.15 ($296.15 components + $10.00 manufacturing). The more expensive 32GB model costs $328.15 ($318.15 components + $10.00 manufacturing). These prices don't included development or marketing costs.

To see a list of the components inside the HP TouchPad, check out my TouchPad teardown analysis blog post, video, and gallery.

If these numbers are accurate, HP stood to earn $193.84 on each 16GB TouchPad and $271.84 on each 32GB tablet. Sadly, those profits were not to be. HP is now losing $206.16 on each 16GB TouchPad and $178.16 of 32GB models.

During its quarterly earnings call last week, HP announced that it took a $.05 charge per share for the TouchPad. Given the company's 2.07 billion outstanding shares, Josh Ong, from AppleInsider, estimates the total cost at "just over $100 million".

About

Bill Detwiler is Managing Editor of TechRepublic and Tech Pro Research and the host of Cracking Open, CNET and TechRepublic's popular online show. Prior to joining TechRepublic in 2000, Bill was an IT manager, database administrator, and desktop supp...

41 comments
birumut
birumut

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pjunkel-pcmind
pjunkel-pcmind

sharpear, I agree with you! I have owned several HP products over the years. By and large, they have never given me a lick of trouble, but I learned early on that if they did, HP tech support was almost as useless as Dell's. And, I find myself somewhat grateful to both Dell and HP for their $4itty service. It encouraged me to learn about computers and technology in depth so that I can fix them myself. I rely on no one to fix my PCs. And, I understood clearly when I purchased my firesale HP Touchpad that I would be on my own if something goes wrong. I have already played around with it, and like it a lot for the price. Would I have paid full price for it and been happy? No. But at it's bargain price, I am very happy to have the opportunity to learn another OS and to tinker. It does not matter if the OS may never be seen again. It is just interesting to me. And...I have a feeling we have not seen the last of WebOS at all. Since an Android port is in the works, I may or may not take advantage of that option in the future. However, I am less than delighted with Gingerbread on my HTC Evo. In fact, I would brand that piece of software a POS that has crippled a perfectly good piece of hardware. No wireless N indeed! So, I will think long and hard before I put Android on the Touchpad if it becomes available. Of course, since it will be a hacked version, it will probably run great! No, the HP Touchpad should not have been killed off. With a little patience and a competitive price (about $150 below the iPad), I think it might have done well. But that is just my uneducated opinion. Others have already said, and I kind of agree, perhaps HP is just crazy like a fox selling all these Touchpads at such a low price to get them into the hands of consumers ASAP. It will be interesting to see of they have a plan to take advantage of this or if they are just doing a Hail Mary Pass on the item.

sharpear
sharpear

I think these people are just mad that they missed out on this amazing deal, and have attempted to take it out on you Bill. I do very much like your Teardown guide and articles; you should not let these idiots con you into a worthless debate when you have better things to do like tear down the next new product that they will be envious about anyways. A couple spelling mistakes means nothing because your not an english major your a Tech. Anyways everyone here knew what you where referring to, and its like everyone was sitting here trying to figure out what the "Company didn't fasten on each unit". Although I have not looked at the teardown to confirm that. :) I got mine and its much better than my $40 8650 7" tablet. I have not looked into it much, but plan on customizing it when I get more time. I still want the HP slate 500 though, but kind of waiting around to see if the battery life and processing power will be much better in tablets by the time Windows 8 rolls out. Also to the people who talked about it not being supported? Name 1 product that HP actually supports to you fully without having a warranty? You can call them and ask about a printer before buying and they ask for your serial number to check warranty status to explain how the wireless will work on their printer. If you check their forums it's the user community that supports HP products not HP.

Gisabun
Gisabun

I heard the tablets cost $380 to make [including shipping, packaging, etc.]. So they may have lost $280.

gcanny@GC-Tek.com
gcanny@GC-Tek.com

I think that HP should release WebOS to the Open-Source Community to give WebOS a happy future... They could also release the hardware specs too.

AnsuGisalas
AnsuGisalas

There is a goodwill win. There is storage savings. There is partial recoup on money already spent. There is the fact that HP puts it's money where it's mouth is, not just wanting out of personal computing and tablets - actually getting out, and in record time. It's decisive and un_pussyfooting. However the chips may eventually fall, this was a strong move, and realistic. No-one would have bought a doomed device for much more than this.

thegreenwizard1
thegreenwizard1

I've tried to buy one in West of Fort Lauderdale. Best buy refused to sell them and send them back to HP, the same for Costco, Office Depot, Stapples...after moving from one store to another, I bought a Vizio 8 inch instate.

n0ty
n0ty

I've bought lots of HP gear in the past 40 years (Calculators, Computers, Test Equipment) and have no qualms about buying this one. I'm sure the hardware is sound, and HP is honoring a one year warranty. Also, my kid is a tech genius and tells me the underground Geeks have already ported Android Gingerbread to the Touchpad! So the whole "dead" WebOS thing doesn't bother me a bit!

npiotrowski
npiotrowski

at this price i was scrambling on hp's biz website trying to checkout. 8 hours of frustration finally paid off and i got one ordered and the shipping confirmation was sent to me yesterday. i don't care if it's not iOS or Android on this tablet. i'll finally have my first tablet!

daveinboise
daveinboise

I own a couple of laptops from HP, printers, screens, etc. and overall I like their products. But for $99 to buy a product that already has issues with it, name me an OS that is released that doesn't, knowing that those issues will not be resolved is just spending good money for a buying decision because I want a tablet - any tablet? I don't think so. I'll save my $99 for a tablet that will be around for a while - even if I go for a thousand dollar tablet I have a tenth of the money I need. Works for me.

mike
mike

Are you stuck with WebOS on this device? Surely someone out there will work out how to get some Linux or other on it, if they haven't already!

ohmyhead
ohmyhead

"Here's a look at what the company *looses* on each unit." Seriously? Come on, TR Dojo, you're better than this. Let's shine bright lights on the poor saps who are the first wave of real life Idiocracy, not join them. Meanwhile, I've missed out on the dirt cheap giant cell phones that won't fit in my pocket. Tragedy! As always, thank you for the info. :)

dfields
dfields

in VOLUME! I say, that's a joke, son.

stalkowski
stalkowski

Hate to tell you this Bill, but unless all of these Touchpads are sitting in an HP warehouse being sold through the backdoor by someone, they haven't lost a penny, it's the warehouses and distribution centers that are losing the money as they have already purchased them from the manufacturer (HP). Wish people would learn how the real world works before they report on what they think is really happening. You may be the "Head Technology Editor" but you don't know sqwat, it's like the boycott email that people receive "Hey Everyone, lets boycott this product on this date and we'll show em", the only problem with this is exactly what I stated above, the manufacturer has already sold to distribution centers and warehouse and have their money, you would have to boycott for months so that the distribution centers and warehouses have to sit on that product and not be able to move it, at that point, they would no longer place orders with the manufacturer. Please Grow Up People and be responsible for what you write.

ohmyhead
ohmyhead

Here you go, Bill. "A couple spelling mistakes means nothing because your not an english major your a Tech." You have predictably been forgiven your mistakes! And with an amazing stroke of luck, you have been forgiven your mistakes with a sentence containing what looks to have SIX mistakes of its own. \o/ And it insults you and our profession. "Manipulate our language however you please, to whatever large or small degree. Go on, go for it! You're just a tech!" A tech who publishes articles that are potentially read by millions, and certainly by thousands. I understand that typos happen, I'm not insane, nor am I a troller as this shining example of Cleveland's public school system here has proclaimed. I am not here to inflame the discussion. My purpose is not pointless. I am merely pointing out that if you're going to be a writer and publishing your writing, you should really, really proof-read your work. The rest of us should be doing the same in all manners of writing. All this forgiveness for making mistakes only seems to encourage more mistakes. If sharpear here was allowed to procreate and has a teenager, I'd love to see one of his/her texts to him. "Hey D u sher told tht guy on tht brd wassup!!@#$%$! p.s. pls stop beating me." Yeah, kid, he sure told me. And he was on the money about me missing out on the deal, too. Do you think he concluded that from my statement about what a tragedy it was that I didn't get a "giant cellphone that won't fit in my pocket"? Calling strangers names, also perfectly acceptable online...because no one objects to it. No one says, "Hey, that's rude." Parents were clueless when they raised us, I guess. And now, the Internet is an ugly place, a swirling sea of errors and rudeness. Well *I* object. Sharpear, you hurt my feelings. You called me an idiot. But I forgive you because you have proven my point here better than I ever could. I thank you, sir, and wish you well. You all wish I would can it, I get it. But there should be MORE people making this same noise. That's all I'm trying to say. And with that, I'll finally can it.

pfyearwood
pfyearwood

HP did not say they were dropping webOS but were putting it on the back burner. They could recoup more of their spent money if they find someone who wants to buy/license the OS. Plus, all the lawsuits Apple is throwing around lately, I wonder if anyone would touch it unless it was MS or Google. Paul

kevin.nichols
kevin.nichols

I have had mine for about 3 weeks now. The only issue I have had is every once in a while I get screen lag when using apps connected to the internet for content, and this happens less than 5% of the time. What issues are you having with your WebOS device?

Bill Detwiler
Bill Detwiler

Use of the word "looses" in this article's short description was a typo--nothing more, nothing less. I used lose (in one form or another) four times in this piece, including in the title. And, one of those times I accidentally added and extra "o". Unfortunately, I didn't catch the mistake until after I published the piece and sent today's TR Dojo newsletter. Thus is the world of online publishing--where writers and contributing editors (like your's truly) are their own copy editors. By the way, according to the online versions of the Oxford English Dictionary and Merriam-Webster Dictionary, "idiocracy" is not a word. Dictionary.com does list the word "idiocracy", but the reference seems more appropriate to the word "idiosyncrasy".

ExEC135CrewDog
ExEC135CrewDog

"Sqwat"? How about "squat" instead? Self-righteous indignation only works if you, yourself, are perfect.

BurningLamp
BurningLamp

Hey stalkowski@, With all due repect I think your tone was quite condescending. Even if you have better information than the other person I think the manner in which you put it across matters as much as the information itself, in my opinion.

dohorety
dohorety

In what retail world (particularly electronics) do you live where presumably distributors of any size at all have already paid their bills to manufacturers? The larger the distributor, typically the larger the the payment terms allowed, i.e. Net 45, Net 60... heck even Net 90 days. If you think HP is sitting like a fat cat with all of its money in hand... you're naive!

Threv
Threv

The Big Reseller lines don't pay cash, they buy on credit and recoup later. In this case with HP killing the price those distro Centers negotiate the diffrence on the back end. They may have agreed to pay X dollars on their LOC or 90-120day Accounts payable or whatever they negotiated but if they can't make a deal with HP then they ship the product back and use the credit for products that will sell so they eat Shipping and handling cost but not the entire amount.

blarman
blarman

"Takeaway: By slashing the TouchPad???s price, HP hopes to work off unsold inventory and cut its losses. Here???s a look at what the company looses on each unit." Still there as of 3:05 MST. Shockingly, however, the dictionary recognizes "loose" as an alternate spelling of "lose". But, please, people, use "lose". "loose" is the opposite of "tight", not to lack or miss something.

Bill Detwiler
Bill Detwiler

If you're going to point out a typo, don't apologize for it. Either be proud about what you're doing or don't do it. You pointed out the one instance (out of four in the article) where I accidentally typed loose instead of lose.

tkejlboom
tkejlboom

The suits are based upon general functionality, not copying specific lines of code. So, Open Sourcing the code wouldn't expose HP to any more lawsuits. The Open Source community wouldn't have much to be afraid of, as Apple would only have a case against HP for distributing the tablets in the first place. Of course, none of the patents are valid, but I get your point about just getting hit with a multi-million dollar suit being to rich for just about anyone's blood.

ohmyhead
ohmyhead

Congratulations on making only one mistake as opposed to none. ;) I was referring to the movie Idiocracy where the narrator explains that natural selection is indifferent to intelligence, so that in a society in which intelligence is consistently debased, stupid, irresponsible people easily out-breed the intelligent, creating, over the course of five centuries, an irremediably dim and sexually motivated dystopia. Loose(s) is now a popular way to spell lose(s) online. And as with all such things, when the culprit is called on it, the standard response is, "oh who cares, its just the net dont be such a spelling natzi." When the caring stops, it will eventually all look like chicken scratch and only slack-jawed teens with their boxers hanging out the back will be able to read anything. And they likely won't even want to. There's so much medicine to be smoked! Anyway, "Idiocracy" (my mistake for not putting it in quotes, or should it be italicized? Underlined?) is quite funny. You should definitely check it out. Oh, and I just spent an hour trying to track down this Touchpad deal and if central Orange County, CA has any, they ain't tellin' or sellin'.

navyhatch
navyhatch

Then nobody should "cares" what the price is? :) Just Saying!!!!

ohmyhead
ohmyhead

"...the dictionary recognizes "loose" as an alternate spelling of "lose". Care to share where you got this fun fact? Every dictionary I've looked at has specifically warned against confusing lose with loose. If I had a Touchpad, I'd be using it right now and wondering if it is defective because it refuses to produce evidence that you are shockingly correct.

pfyearwood
pfyearwood

Thank you, Dr. Zinj. Didn't think to try looking it up on Wikipedia. Guess I'm not as geeky as I thought. Paul

Dr_Zinj
Dr_Zinj

... "is a science fiction story written by Cyril M. Kornbluth, originally published in Galaxy in April 1951. It was included in The Science Fiction Hall of Fame, Volume Two after being voted one of the best novellas up to 1965." http://en.wikipedia.org/wiki/The_Marching_Morons, 25 Aug 2011.

pfyearwood
pfyearwood

I remember reading a sci-fi short story decades ago called The Marching Morons where the few remaining people with good IQ levels were the hidden slaves who kept the world running safely for the masses. Sorry I can't remember the author or the anthology. I don't think we really have five centuries to wait. Paul

ohmyhead
ohmyhead

Why does social decline have to be inevitable? Some things are worth fighting for. I don't want to loose this one! Wait...oh crap.

AnsuGisalas
AnsuGisalas

Non-phonemic spelling != Intelligence. English has one of the least representative spelling systems in the world, so there's probably no harm in letting entropy play (and no way to avoid it, either).

johnmckay
johnmckay

The dictionary is correct. It's up to the user to define the context and grammer. Spellcheckers do a great job; too good sometimes. Am I the only one that's sat there happily pressing 'correct' in a blind haze then realise I chose the wrong verb/noun..... then you cant find it with spellchecker again and read over and over till it jumps out? To the story: The voting options are biased; It looks like a good tablet, with promise, but risky buying if support drops and no more functionality gets added. I wouldn't risk my money on it unless someone buys it up, but I dont think it's a bad tablet in itself. Shame there's no voting option for buying a lame duck.

blarman
blarman

My Miriam Webster Dictionary (hardcover) from 1985 lists "loose" as a synonym of lose. Stupid? Yes. Has it been corrected? I hope so. What should people use? "lose" = to misplace or cease possession of. "loose" means not tight. Again, please people - you can not rely on spell checker for everything! Another word pair not to get confused is effect/affect. Affect is a verb - the action - and effect is a noun.