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HP Scraps TouchPad, Pulls Out of PC Business

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Analysts say Apple has singlehandedly knocked HP out of the PC, smartphone and tablet business. (Photo: Apple.com)
Analysts say Apple has singlehandedly knocked HP out of the PC, smartphone and tablet business. (Photo: Apple.com)

BUSINESS

  • Hewlett Packard terminates TouchPad tablet PC and WebOS operating system operations
  • HP announces it will end PC business to concentrate on software and business solutions
  • iPad 2 sales continue to break records worldwide

Hewlett-Packard is pulling the plug on its TouchPad tablet PC less than two months after its release, the company reported. The world’s largest computer maker will end all WebOS hardware operations, which also includes HP smartphones.

Alongside headlines of the TouchPad’s demise, HP also confirmed it will put an end to its PC business in order to concentrate on software, servers and other business equipment. The company announced plans for its $11.7 billion acquisition of UK software firm Autonomy in a move that recalls the business overhaul that IMB pulled off six years ago.

“Better Than Number One”

When HP first unveiled plans for the TouchPad in February, it spared no words in talking it up, saying “in the tablet world we’re going to become better than number one”. Just 49 days after the device’s entry onto the United States market, it was evident that its tablet would get nowhere near Apple’s iPad 2, the undisputed best-seller in the segment.

Retailers and consumers alike were quick to shoot down HP’s post-PC device, reporting slow performance, awkward user interface, recurring keyboard bugs and a lack of applications.

After just five weeks, HP cut $50 from the retail price on its website, with retailers offering up to $200 off the $599 price tag in-store. HP said the reductions were aimed at students going into the new school year, but whatever the reason it failed to dramatically impact sales.

Worldwide Flop

The Wall Street Journal-owned tech blog, All Things D reported Tuesday that since the July 1 release date, US electronics retail behemoth Best Buy had only managed to sell 25,000 of the 270,000 TouchPads ordered. A bitter pill to swallow, given that the iPad 2 literally flew off the shelves nation-wide, with retailers all but sold out of stock in the first weekend.

Over 500,000 units were sold in the first week, including over 300,000 on the first day, albeit across several outlets. With sales so much lower than expected, Best Buy reportedly tried to sell the overstock back to HP, who declined the proposal.

After two slow weeks in the US, on July 15 the TouchPad went onto the shelves in the United Kingdom. According to technology market tracker Context, in the first fortnight only 12,000 units were sold, with just 2,000 more throughout the rest of Western Europe.

In Australia, meanwhile, the TouchPad put in a good case for the shortest-lived consumer electronics product in history. Released last Monday through mega-retailer Harvey Norman, the exclusive carrier, HP’s tablet lasted barely five days before the company announced its discontinuation.

Harvey Norman has promised to refund around 1,000 customers who bought the TouchPad. Those in the UK are not likely to see such a commercial gesture from their retailers.

Irresistible Apple

All the while, iPad 2 sales continue to break records worldwide. Apple currently tops the smartphone and post-PC markets, and its domination extends beyond the iPhone and iPad.

Brian Marshall, an analyst at investment services firm Gleacher & Co, sums it up neatly: “Apple singlehandedly knocked HP out of the PC, smartphone and tablet business.” HP’s announcement is another example confirming Apple’s status as the irresistable driving force in today’s consumer electronics market.

Key Statistics - Global Tablet Market (source: Strategy Analytics)

  • By 2015, the global tablet PC industry will be worth $49 billion.
  • After televisions and PCs, the tablet market will grow into the third largest consumer electronics sector, with 149 million sales forecast for 2015.
  • The Apple iPad is expected to continue dominating the tablet market, with Samsung remaining a distant second.

By James Mulholland for
James Mulholland is a Paris-based internet and broadcast journalist specializing in sports, current affairs and technology news, while also freelancing as a photographer.

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