Early Adopter or Old Geezer? I think I’m getting old. Technology changes too fast these days. I started writing an article a few weeks ago with the goal of talking about the potential (positive) impact of HP’s newly released Touchpad. Excited with the device’s potential I bought one the first day. Here’s what happened since: July 1st HP Releases their highly touted webOS tablet the HP TouchPad One month prior HP CEO Léo Apotheker states to D9 Conference, "We will not release a tablet that isn't perfect." Reviews were mixed: But the overall consensus was “tremendous potential.” InformationWeek's Fritz Nelson summarized it best, "It's an innovative tablet with some fantastically juicy surprises that will make you want it now, but it carries enough disappointments that you'll probably wait for the next version. It's not enough to make you put down your iPad 2...but it will make you wish that your iPad bestowed the TouchPad's user experience and included its other innovations.” Matt Buchanan at Gizmodo explained: “There is the iPad, and there is everything else. The TouchPad is the first tablet that could be truly something more than everything else. The TouchPad gets it. The big ideas, like Synergy (HP's webOS cloud service) and the Card interface, make sense. The details, like the seamless connection between the TouchPad and Pre3 smartphone, make sense. That puts it way ahead of everything else, at least conceptually.” Jon Rubinstein (then head of webOS, also formerly with Apple where he invented Apple’s iPod), compared early, negative TouchPad reviews to early, negative reviews of Mac OS X and urged his troops to be patient: "We still have work to do to make webOS the platform we know it can be, but remember…..it’s a marathon, not a sprint” Errrr…ummmm…….. August 18th HP announced that they “will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward.” The news was shocking. Everyone from Russell Brand to Hitler was dismayed. HP was “killing” their tablet that was released less than two months ago. After unflattering reviews by unoriginal Tech writers, dismal sales (some reported under 25,000 units sold in the first 7 weeks) perhaps it shouldn’t have been a surprise. After all, many great products (or their inventors) get killed before consumers ever get their hands on them. HP’s CFO Cathie Lesjak described the situation “the software was met by strong reviews, but the sell-through of the product was not what we expected. Our intention was to solidify webOS as the clear number 2 platform for tablets. But with such a young ecosystem and poorly received hardware, we were unable to achieve our target.” But what were the reasons why no one was buying the TouchPad? The hardware isn’t bad (it’s not AS good as the ipad2 either), the operating system is solid (after HP released their OTA update) and user experience is superior to any other tablets. In fact, consumers that bought them liked them! Then what’s left to blame the failure on? Marketing, timing, pricing or insane corporate strategy blunders? Most likely, all four.
Marketing and PricingGary Katzer at webosroundup.com wrote “One of the reasons why those of us who use webOS are so passionate about it is because we love how it works…..The problem is….. we need to grow webOS so new users can consider webOS as a viable option to iOS or Android. Seeing webOS IN-ACTION is one of the easiest ways to demonstrate how awesome it is.” So far the problem every big tablet maker has had is they keep trying to compete with the iPad. But they all seem to be competing with the wrong value proposition. You can’t try to beat Apple with only hardware, functions and features. HP can’t compete with Apple marketing. Apple’s marketing and the story they tell is second to none. People aren’t buying tablets today, they’re buying iPads. The only way to get around this is either don’t compete in the same space or use the one lever Apple won’t (because they don’t have to), pricing. HP failed here as well. They priced the devices too high to begin with, realized it once sales were dead on arrival and quickly discounted the devices. This move spoke more as “defeat” to consumers than “great deal” and sales continued to stay flat while consumers waited for more discounts. TimingOS Bugs at launch: Early complaints mentioned slow software or other OS issues. The fact that these existed was clearly troubling, what HP later admitted was unthinkable. They KNEW about the issues but released the device anyway. HP’s Rubenstein in a letter to internal employees responding to early negative reviews “The good news is that most of the issues they cite are already known to us and will be addressed in short order by over-the-air software and app catalog updates.” Apps: Not enough market-share means not enough developers, which means not enough apps. 6,000 apps for webOS (most not optimized for tablet screen size) vs. 100,000+ for iOS iPads. While I’ll argue against quality over quantity any day, there were some critical mistakes here as well. HP clearly misunderestimated the importance of apps at launch date. No, HP didn’t need 100,000+ apps, but they needed the big ones. While the number of “optimized for tablet” apps exceeded the number available for most Android tablets at launch, the big names weren’t there. Some of the most popular apps missing from the TouchPad; Netflix, Pandora, EverNote, Yelp, Amazon Kindle (HP released this approximately a month later) and mass quantities of FREE games. However there were signs of great things to come. HP struck an exclusive deal to provide every TouchPad owner 50GB of cloud storage from Box.net free for life (a $20/month value over three years and this alone pays for the device.) This essentially turned every 16GB TouchPad into a 66 GB TouchPad and every 32 GB TocuhPad into a 82GB device, far more than any other tablet! The TouchPad also was released with by far the best FaceBook app to date and came with a FREE full version of Angry Birds. If HP had struck more exclusive deals with the Big developers and got the top apps to the TouchPad prerelease, it would have negated one of the biggest complaints. Touch to Share: Another differentiator for the device was the “Touch to Share” capabilities. The webOS technology promised to integrate your webOS devices seamlessly by sharing information between devices simply by touching them together. The only problem? HP released the TouchPad but didn’t have any phones capable of using the feature! Why not update their current phone (the Veer) with the capability or release their new Pre3 phone prior to the tablet? Or at LEAST release them at the same time?
August 20th Two days after HP’s decision to discontinue operations for the TouchPad because, as HP’s CEO Léo Apotheker put it “webOS devices have not gained enough traction in the marketplace with consumers and we see too long a ramp up in the market share” HP announces clearance pricing for the TouchPad. $400 off both models. Pricing was to take affect the next day, but some retailers, including HP jumped the gun. The web went wild. A posting on SlickDeals started it all. The thread continues to break records for posts and viewers, with well over 4.5 million views since the price drop. Within 48 hours, HP had what they wanted all along “traction in the marketplace” and “the clear number 2 platform for tablets.” Late into the evening online retailers began to drop their pricing and quickly sell-out of their inventory. People were rushing to their nearest 24 hour Wal-Mart, only to be turned away by management that wasn’t even aware of the price drop. As soon as an online retailer would drop the price, SlickDeals forum faithful would update everyone and the store would be out of stock within minutes. I’ve never seen anything like it. I’ve waited in lines on Black Friday, tried to buy loss-leading deals online and stayed up all night to get good tickets to concerts. But this was the most activity for one product (discontinued no less!) that I’ve ever seen. I sat there most of the night just watching the madness. Slick Deals: Forum: Places Previously Live With Drop (SOLD OUT): USA: * MacMall [macmall.com] - (OOS) * OnSale via Amazon - 16GB $99 + $5.77 shipping [amazon.com] - OnSale via Amazon - 32GB $149 + $5.77 shipping [amazon.com] (OOS) * Amazon Lightning Deals (16GB) [amazon.com] (OOS - 11:25 EST) - lasted 25 min * Amazon Lightning Deals (32GB) [amazon.com] (OOS - 1:04 EST) - lasted 4 min (seemed like 2 seconds) * B&H [bhphotovideo.com] *sold out CDW (OOS) - 800.800.4239 BJ's (OOS) * Datavis (priced at $120 and $170) [datavis.com](Sold Out) Datavis on eBay [ebay.com] (Sold Out) * Fry's (Sold Out) HP Home & Office - 16 GB [hp.com] (Sold Out) * HP Home & Office - 32 GB (Sold Out) HP Small & Medium Business Sold Out * J&R(Sold Out) - Kmart - 32GB [kmart.com] (Sold Out) MicroCenter -(Sold Out) - Office Max [officemax.com] (Sold Out) * Office Depot (Sold Out) PC Richard (Sold Out) Radio Shack (Sold Out) Sam's Club (Sold Out) Target (Sold Out) Walmart (Sold Out) * HHGregg [hhgregg.com] Sold Out CostCentral - no longer showing up on their site as of 10:25pm EDT Zones.com @ $99 and $149 OOS * Staples Out of Stock Sams Club OOS Canada: * Best Buy Canada (Sold Out) FutureShop (owned by BBY) (Sold Out) Places Without Drop * Barcodegiant (OOS) CircuitCity [circuitcity.com] (Currently Unavailable) Meijer (Out of Stock) Newegg (Out of Stock) * Overstock (Out of Stock) ProVantage (Out of Stock) Sears -- 32 GB [sears.com] (Out of Stock) [8/20/2011 11:44:45 PM EST]. * Vann's (Currently Unavailable) * Buy.com - "Sorry this product is no longer sold on buy.com" (Mon 3:36 PM EDT) * BuyDig (Product page no longer available) * CompUSA.com Check in Stores * Newegg (Sold Out) * Tiger Direct (OOS online) * Geeks.com (Product page no longer available) as of 12:55 EDT * Zones (Sold Out) * CostCentral (Product page no longer available) * CompuVest (Product page no longer available)
Some tech writers and consumers were arguing the foolishness of buying a now defunct device. I think the arguments are short-sighted. HP has stated they still plan on supporting the hardware warranties and plan another OTA webOS software update soon. HP has also emphasized (somewhat vaguely) their continued desire to develop for webOS. Even if we discount everything HP says (which might be prudent) the TouchPad overwhelmingly meets the need for the majority of activities done on a table. According to Forrester research, the top three uses of tablets are: Email: 73%, Look up Information: 72% and Play Games: 66%. The TouchPad has the best email interface I’ve used and has a great web browsing experience. The number of games is the weak point, but for $99 it’s a great deal. A poll on Slick Deals questioned why everyone was buying the device. Of nearly 3,000 responses, the overwhelming response (60%) was “I just wanted a good low cost tablet.” Approximately 40% of those polled bought between two to four of the devices. The day after the clearance began there were lines at Best Buy stores and HP’s Home & Office site was getting so much traffic it continually returned database and server errors. HP’s Social Media manager came to the call to let everyone know they were out of stock and would be posting an “alert” website where people could sign-up to get notified when more would be available. Within minutes of the “alert” website being available, it too crashed. Hundreds of thousands of devices have shipped. Thousands more orders placed online have been cancelled or delayed with some of the larger retailers struggling to get more stock to keep customers happy. Demand is higher than ever. The TouchPad rose to the top of Amazon’s best seller list in just under two days. An increase in sales rank of more than 2.5 million%!!!!
Google searches for HP TouchPad were more popular than Kim Kardashian, on her WEDDING DAY! With searches for the device rising more than 5400% on Google.
Paul Suarez from PC World wrote “Ever since I heard the price of HP's TouchPad was going to drop to $99 I all of a sudden started liking the now defunct WebOS device a heck of a lot more. However, after spending the better part of Saturday trying to hunt one down, I'm convinced finding Bigfoot might be easier.” Twitter shared the news with comments like: “Somewhere, some HP Exec is laughing hysterically thinking "Now we unleash over Master Plan....FULL SUPPORT FOR THE TOUCHPAD! THE TABLET MARKET IS NOW OURS!!! MUWAHAHAHAHAH” and, “entering into bizarro world when you have to sign up to get on an email list to tell you when a discontinued item is back in stock.”
The PreCentral Forums saw nearly a thousand new members join in one day alone, the most seen since late 2009. Additionally, developers are reporting that their app sales are up. Way up. Some reported 10x to 12x increase in app downloads since the sale. I’d estimate that approximately 1 million HP TouchPads were manufactured (based on estimated cost of $328 to build and HP’s estimated write-off of $332 million from the hardware.) Since the sale began it’s easy to believe that anywhere from 500,000 to 750,000 TouchPads were sold, likely beating the opening weekend sales for iPad2. Estimated total sales for all Android tablets are approximately 1 to 1.2 million tablets. The HP TouchPad with webOS is NOW the clear number two hardware platform for tablets…… Unfortunately, HP won’t be selling them anymore…… st
P.S. I got a refund on the pricing difference from the Touchpad I purchased July 1 and used the money to buy two more……..