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One Final Manufacturing Run of Touchpads
Accepted on the first attempt, lochnessie writes "HP has announced a limited manufacturing run of Touchpads to be available in the next few weeks. The HP employee making the announcement posted 'I think it's safe to say we were pleasantly surprised by the response' to their massively discounted, sold-at-a-huge-loss tablet."
Is this the return of Dotcom accounting?
Sell at a loss, make up in volume?
How much money did Microsoft burn trying to get the XBOX off the ground? Sometimes it pays to make a little investment in the future. If HP had sold these even at $150/$200 or maybe $200/$250, sure they would have lost money on each unit, but how long until it overtook iPad? Tablets are going to be selling for $100 in 5 years anyway, and HP could have sold a LOT of them at a loss to make it into the market. Once the established leader had been displaced, they could have made tons of money on licensing, app store purchases, etc. Maybe even eventually on hardware. I think they were looking for a home-run, and when they didn't get it, they just gave up all hope. Bad move on HP's part.
-Arthur
Cave ne ante ullas catapultas ambules
If I had to guess, it's probably because they already have orders in with their suppliers that they can't cancel and contractual obligations to fulfill. The costs of making this final run are probably sunk costs, and they figured they might as well go ahead and make those last $99 sales before everything is shut down and done.
if there's demand for your product, keep making it.
I'm not sure that works if the reason for the demand is that you're selling it at a huge loss without any business model to recoup the loss.
There is demand because of the discount, not because of the value.
At an 80%+ discount and $100, its in the impulse buy range for a lot of people, no matter if it ends up being a useful device or not. Hell, I've got a drawer full of discounted crap in that price range.
I wouldn't assume a tablet at $250 or $300 would sell even remotely like $100... and if it was always $100, it also wouldn't have sold like that.
So, HP is making another batch of Touchpads, after already announcing that they were being discontinued. The 'overwhelming demand' is based on the $99 'firesale' price, which leads us to assume they were being sold at a significant loss. A few possible conclusions:
1.) HP was marking up their hardware costs by an astronomical percentage. If they are putting more touchpads into production, and planning on selling them at or near the closeout price, that must mean they still see room for profit to be made (even if it is razor thin).
2.) HP is just flat-out stupid, and is planing on losing more money by selling Touchpads at a continued loss.
3.) The WebOS brand isn't dead after all, and this was all a giant marketing ploy to jump-start the WebOS community. This makes sense even if HP plans on selling off the brand. With a huge influx of users, its now instantly more valuable than it was last month.
I'm personally thinking its a combination of all three.
No man is an island, But if you take a bunch of dead guys and tie them together, they make a pretty good raft.
I hear ya....Hell, I've pissed away $100+ easily on a good night of drinking out and about town. I'd lay that down on a $99 tablet...especially with news that the cyanogen folks were working to get it to install on these units.
$99 is definitely impulse buy for many people....
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
HP has a new notice up on their website intimating that they received a huge number of sign-ups for that notice. I'm not sure the small number of Touchpads still in the pipeline will be enough to satisfy all of that interest. I'd keep a close eye on your email over the next few weeks and be ready to jump right on that.
Fingers crossed though. I too would really like to get my paws on one.
If HP couldn't sell themat 400 bucks a piece, why would ebay? Their attraction is their cheapness and expendability. Hard to gouge potential customers when they only want one on a whim.
So one guy with a thousand fake names will get the entire run and sell them all off for $300-$400 a shot on eBay. Good, good, glad to see the system works.
Given that HP couldn't sell them at all until they dropped the price to $99... your scenario seems pretty unlikely.
I won't be surprised if someone tries to do it - but they're going to get stuck with a lot of inventory. The interest just isn't there.
#DeleteChrome
This would interfere with the suicide of the company...
If I used a sig over again, would anyone notice?
Probably they have stockpiles of things like cases or screens or other components that they want to run down. If the cost of assembling the parts into tablets is less than the $99 they can get for them (which it almost certainly is) - then it may just be cheaper to assemble and sell them rather than scrapping all of those parts.
Then why would you make another run at a loss after you were sold out?
Couple of potential reasons that aren't completely stupid:
1: Stockpile of unassembled / partly assembled components that they couldn't find some other company to buy in the last couple of weeks. and
2: Expensive to exit contract(s) with one or more companies at some levels of the manufacturing layers (component suppliers, final assembly provider).
Then why would you make another run at a loss after you were sold out?
Contracts probably. If HP ordered one million Touchpads, and they received 900,000 so far, the manufacturer might not let them off the hook.
What benefit does it offer to the slashdot community as a whole?
learning about the community creates the community
Nah, it'll be okay, they'll just make it back in VOLUME!
Support the EFF and Creative Commons. The war is coming, and they're supporting you...
If you want to see what sort of price the market has set, go onto eBay. The 16GB version is selling.. and I mean with real bidders.. at about £200 ($325), with the 32GB version coming in at around £230 ($370). So this is perhaps the sort of price point they should have been selling at.
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First you announce the discontinuation of the product you just brought out, so abruptly that the ads for them continue to run for another day or two, and institute a huge price cut (which means anyone who bought one at full price the week before will be an active HP hater for the rest of their lives), then, as people rush to buy them, you tell Best Buy to pull all their stock and ship it back, then you announce that you're going to build more of them.
Do they now have 3 or 4 different CEOs who take turns running the company every few days without ever talking to each other?
I see even classic Slashdot is now pretty much unusable on dial up anymore.
Yeah but they are selling on Craigslist for $320 RIGHT NOW and from what I read the BOM on the 16gb is $318. Sell them for $350 and make a nice tidy profit.
Sadly though this is why we are doomed and the far east will win, because nobody in the states wants to do shit unless "We can make iMoney nom nom nom!" and show constantly climbing profits to Wall Street, which is now just Vegas with nicer clothes.
Meanwhile companies like Lenovo will be more than happy to take those 100 million plus 6% profits that the western CEOs look down their noses on because "Its not iMoney! Nom nom nom". i predict the OEM will die, replaced by the ODMs who will cut out the middle man and keep the 6% profits for themselves. I wouldn't be surprised if some Chinese company just takes the Touchpad design, slaps Android on it, and has them for sale at $375 by Xmas.
I STILL think they are ALL missing the magic iPad killing price point though. Make a dual core ARM with 4Gb of storage and 512Mb of DDR2 for $199, with the single core going for $149, both running Android. You put that out and it will frankly slaughter as we have seen "good enough' and cheap kills should be the goal. Apple can keep the high end but the one that hits those price points with decent specs WILL take a HUGE chunk of the market, mark my words.
ACs don't waste your time replying, your posts are never seen by me.
However, this does prove EXACTLY how stupid HP is, if they killed it so quickly without knowing about 1 or 2 (whichever it was, if not both.) As for being "stunned" at the response--really? I mean, they got lukewarm reviews, but everyone said they were decent devices, and HP could have EASILY sold all of their stock at about $249 each*, and not looked quite so much like chickens with their heads cut off while doing so. The only message the $99 price sent was "We want out of this fucking business TODAY."
And in case anyone is wondering why HP is doing what they're doing, read this. Very nice one-page summary from the Wall Street Journal.
* $499: no sales. $449: no sales. $399: no sales. $99: SOLD OUT IN HOURS. Maybe there's a reasonable (though still not profitable) middle ground there somewhere...
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Yeah, now he only has to make the Android start without injecting the kernel, make it access the touchscreen, oh and let it use the hardware accelerated graphics. But I'm sure that's the easy part, yes ?
If all else fails, immortality can always be assured by spectacular error.
Name a SINGLE component at the specs I called for that would kill those numbers, just one. A 1Ghz dual ARM? shouldn't be a problem. 4Gb of NAND? Dirt cheap. 512Mb of DDR3? beyond dirt cheap, Android? Free. And the $149 model would frankly most likely be the more profitable one, you could cut the NAND to 2Gb (both will have MicroSD slots of course) and a single core ARM at 1GHz I'm sure would be quite affordable.
The problem is NOT the specs, the BOM, manufacturing costs, or even development. The problem is every damned western company wants to be Apple and won't settle for less than 30%+ profit margins. look at the Touchpad, you had a BOM for $318 and they were selling for $500. Even if you took out say $60 a unit for advertising (which frankly HP didn't do shit for advertising) they still would have been making out like fricking bandits and THAT is the problem. Honest 5%-10% profits simply aren't acceptable to the PHBs and Wall Street, it has to be iMoney.
And THAT sir is why the far east will royally kick our ass. it isn't that American companies can't design and build great products, it is that our CEOs and PHBs are too fucking greedy and won't have anything less than 30% profit. There can only be one Apple, yet they would rather make nothing than not make iMoney on a product. how fucking sad.
ACs don't waste your time replying, your posts are never seen by me.
I actually really wanted one, strictly for web browsing. I don't care if it won't have apps or support in the future, though the projects going around to put Android on them will certainly add value to something I only wanted to a browser anyway.
Mod up. This is precisely what the manufacturers are missing, including Apple. A tablet that does web and NOTHING ELSE would still compete very well against a tablet that cooks you breakfast. And this web surfing tablet could replace the computers of millions of people that never do anything else but www and webmail. It is insane that competitors allowed Apple to be the only light tablet on the market for so long... I can't believe that Microsoft didn't at least rush something out the door that was half-baked... all they needed was a browsing tablet (keep it simple, stupid). How hard would that have been? COME ON.
The Admin and the Engineer
First, look at the iSuppli BOM...
http://www.isuppli.com/Teardowns/News/Pages/HP-TouchPad-Carries-$318-Bill-of-Materials.aspx
The display is $69. The Touch Screen is $63. $45 for 32GB NAND. $26 for DRAM. $20 for the dual-core processor. $12 for power management. $8 for sensors. $5.50 for WiFi. $30 for the case, connectors, PCB, etc.. $20 for the battery. $5 for box and contents. $10 for manufacturing.
You're right in that there's not one single component that would kill those numbers... IT"S ALL OF THEM ADDED UP TOGETHER.
Your wonderful set of suggestions dropped the BOM down to $273. How many more corners and features are you going to have to cut to hit your numbers? And once you do, is the POS even worth buying? A plastic 5" tablet with an anemic processor, half the RAM needed to do anything, and no storage? Right. Ask Dell how well the Streak 5 sold...
(Oh yeah, add SD slot hardware and a controller chip to your BOM.)
And THAT'S only the BOM. Then it has to be shipped. Distributed. There's R&D, engineering, and development costs. Admin. Marketing. Patents, licensing, and legal. Recouping $1.2 billion in acquisition costs. Costs. Costs, and more costs. And that's before it's even in a store and the retailer marks it up yet again by another 10%. Then there are returns, damaged goods, shrinkage, and demo units.
30% profit? In your dreams. People look at the BOM and COGS and think, "Damn. They're making out like bandits."
Get a clue. To make ANY money selling a tablet at $149, your BOM would have to be less than $50. Good luck hitting that price point.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
Not really. Per a discussion I had with an HP rep today, the final run is to cover all the ones they sold over their "Fire Sale" weekend, to the people who didn't get one ordered before 4am on the 22nd. Somehow I managed to get confirmed for 3 (due to their malfunctioning website)....but in hindsight, I'll probably buy all 3, if for no other reason than to have a spare, and I might use one for Android. ...but back to the point, he said there were 25000 orders and they only had 5000 in stock.
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