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Best Buy upset with HP over selling just 25K TouchPads

post #1 of 117
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Best Buy is reportedly unhappy with HP after having sold just 25,000 of the PC maker's TouchPad tablets and is unwilling to pay for the more than 240,000 unsold units, according to a new report.

Multiple sources who have seen internal HP reports have told Arik Hesseldahl of AllThingsD that big-box retailer Best Buy took delivery of 270,000 TouchPads and has only managed to sell less than 10 percent of its inventory. One source suggested that the 25,000-unit sales number may even be "charitable" because it doesn't take returns into account.

According to the report, Best Buy has refused to pay for the remaining tablets and has asked that HP take them back. But, HP has reportedly pleaded with the retailer to be patient. One tipster claimed that a senior HP executive will soon travel to Minneapolis to smooth things over with Best Buy executives.

The world's largest PC maker is scheduled to report its quarterly earnings on Wednesday. Should the company choose to report TouchPad sales, it may call out the tablet's "channel sales," which would include the full 270,000 devices shipped to Best Buy, rather than the lower "sell through" figure, which would likely spook investors.

Best Buy and HP declined to comment on the report.

Envisioneering Group analyst Rich Doherty said other retailers such as Wal-Mart, Microcenter and Fry's are seeing spotty sales of the TouchPad as well. He added that HP's recent $100 price cut has actually backfired by prompting customers to wait for further discounts.

After the initial surge of interest after the July release, all those price promotions have caused consumers interested in buying a TouchPad to pause because they think the price is going to fall further, Doherty said.

HP released the TouchPad in July to middling reviews, which called it a "mediocre tablet." Former Palm chief John Rubinstein jumped to defend the device and webOS, comparing the platform's shaky start to the early days of Apple's Mac OS X.

Just one month after the tablet's release, HP slashed the price of the device by $100. Days later, a company executive announced that the sale price would remain permanent.



Muted interest in the TouchPad stands in stark contrast to Apple's success with the iPad 2, which went on sale in March. In April, the company reported experiencing the "mother of all backlogs" with the second-generation iPad, adding that it was selling every unit it could make. Tight supply of Apple's touchscreen tablet continued through July, when ship times for the device finally improved to estimates of 1-3 days, down from as long as 4-5 weeks. In the June quarter, Apple sold 9.25 million iPads.

post #2 of 117
one word. LOL.
post #3 of 117
"Best Buy is reportedly unhappy... having sold just 25,000... TouchPad tablets and is unwilling to pay for the more than 240,000 unsold units"

They have to pay for nearly TEN TIMES the number of units they sold???
I'd be unhappy. Also bankrupt.

"HP has reportedly pleaded with the retailer to be patient."

Yeah, 'cause electronics only get better with age. Like wine.
Well, I'm off to buy a VCR.
post #4 of 117
Not surprised. I work at Best Buy and my store has sold maybe 6 of the 100 that we initially got in. I would take one of them over an Android tablet though....
post #5 of 117
Quote:
Originally Posted by Mister Snitch View Post

"Best Buy is reportedly unhappy... having sold just 25,000... TouchPad tablets and is unwilling to pay for the more than 240,000 unsold units"

They have to pay for nearly TEN TIMES the number of units they sold???

I'd be unhappy. Also bankrupt.

Best Buy buys the tablets from HP at cost, then marks them up a bit and sells them to consumers to make the money back.
post #6 of 117
Quote:
Originally Posted by Aybara View Post

Best Buy buys the tablets from HP at cost, then marks them up a bit and sells them to consumers to make the money back.

As someone who used to work there and had access to cost, I can tell you that there is very little margin in computers (if any). At times, there are ever computers (or other products) being sold below cost to bring in the customer. That's why it's their goal to attach accessories and services to every product. HP is screwing them with this deal.
post #7 of 117
I don't get why anyone would buy an HP tablet.

An iPad makes sense as it is the best tablet available and I can understand buying Android tablets if you already have an Android phone (as many people do). But a WebOS tablet?
post #8 of 117
Quote:
Originally Posted by q2h View Post

As someone who used to work there and had access to cost, I can tell you that there is very little margin in computers (if any). At times, there are ever computers (or other products) being sold below cost to bring in the customer. That's why it's their goal to attach accessories and services to every product. HP is screwing them with this deal.

Was using it more as an example of why Best Buy has paid for more tablets than it sold.

Basically it sound like someone at Best Buy thought they would sell better (or HP convinced them they would sell better). Probably trying to capitalize on the long wait times the iPad 2 had at launch..."Hey, I came in for an iPad. It seems you don't have any in stock, so I guess I'll just buy what you have...Look the HP Tablet!"
post #9 of 117
Suck it up, Best Buy! If you're stupid enough to stock that many Touch Pads then you should pay the piper.

Be patient... soon HP will find a reasonable price point... $9.99.
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post #10 of 117
HP stands for Hugely Puny, right?
post #11 of 117
Quote:
Originally Posted by q2h View Post

As someone who used to work there and had access to cost, I can tell you that there is very little margin in computers (if any). At times, there are ever computers (or other products) being sold below cost to bring in the customer. That's why it's their goal to attach accessories and services to every product. HP is screwing them with this deal.

I was kind of thinking the same thing. For an authorized reseller in the United States the profit margin on most computer products is 3-6% (desktops, laptops, PDA's, MP3 players, Tablets, etc ...). This means that Best Buy is probably making somewhere between $15-$20 profit on each $400 TouchPad. You don't make a lot of money of each sale individually ... you make money by selling a lot of them.

If a product just sits there you're losing money ...
post #12 of 117
'Consumers Don't Want Tablets, They Want iPads.'
post #13 of 117
Another half-baked iPad killer rushed to market.
post #14 of 117
Quote:
Originally Posted by WardC View Post

HP stands for Hugely Puny, right?

I'm fairly certain the H stands for Hubris...
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post #15 of 117
.....

CNN: Obamacare largest tax increase in American history

 

FORBES: ObamaCare's 7 Tax Hikes On Middle class

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CNN: Obamacare largest tax increase in American history

 

FORBES: ObamaCare's 7 Tax Hikes On Middle class

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post #16 of 117
Quote:
Originally Posted by Orlando View Post

I don't get why anyone would buy an HP tablet.

Well, therein lies the problem.

They aren't.
post #17 of 117
HP can't play hardball with Best Buy and make them eat a (200,000+ x $300+ each =) $60+ million loss on the TouchPad. because then that would be the last HP product BB ever sells.

they'll make a deal. HP will do a big Holiday ad campaign featuring the "improved" TouchPad with some purported major OS update, the price will drop to $300 after an additional $100 HP "instant" rebate, and HP will take back whatever stock is left unsold after Xmas. all the other big chains will get the same deal.

that's my bet. just watch.

hey, by the way, whatever happened to all the unsold 7" Samsung Galaxy tabs? out of the 2.1 million "shipped" late last year. you know, that can't be upgraded even to Honeycomb (but oops Samsung forget tell buyers that). oh i see you can still buy one at J&R for just ... $350!! oh yeah, i bet they are selling zillions of those. (ok, one 16G wifi-only is listed now on eBay. with less than 2 days to go it is up to $155 after 29 bids. i'll put it on my watch list and see where it winds up.)
post #18 of 117
Quote:
Originally Posted by AppleInsider View Post

He added that HP's recent $100 price cut has actually backfired by prompting customers to wait for further discounts.

. . . which is exactly why policy wonks are deathly afraid of deflation.
post #19 of 117
Quote:
Originally Posted by AppleInsider View Post

The world's largest PC maker is scheduled to report its quarterly earnings on Wednesday. Should the company choose to report TouchPad sales, it may call out the tablet's "channel sales," which would include the full 270,000 devices shipped to Best Buy, rather than the lower "sell through" figure, which would likely spook investors.

They could pull that "channel sales" stunt once.

Eventually HP would have to fess up to poor sell through. If it's really bad, they would have to do like Logitech just did when the latter wrote off a bunch of Google TV units, took a one-time charge that torpedoed the company's quarterly earnings and handed the CEO his hat.

You can't bury such ineptitude very long these days.

If TouchPad sales are a complete train wreck, we will know within months, if not weeks or days.
post #20 of 117
Gee, who did not see this happening?

Oh yeah, Apple haters.

I think we can put a fork in WebOS.

Kind of a shame. Its better than Android.
post #21 of 117
Quote:
Originally Posted by MATTpgh View Post

Not surprised. I work at Best Buy and my store has sold maybe 6 of the 100 that we initially got in. I would take one of them over an Android tablet though....

Thats not hard to do.
post #22 of 117
Quote:
Originally Posted by AppleInsider View Post

Best Buy is reportedly unhappy with HP after having sold just 25,000 of the PC maker's TouchPad tablets and is unwilling to pay for the more than 240,000 unsold units, according to a new report.

well, then, they're just not very good salesmen, are they?
post #23 of 117
In this thread I've heard:

"Kind of a shame. Its better than Android."

"I would take one of them over an Android tablet though...."

And I can't go 5 minutes without seeing the Russell Brand TouchPad commercials on TV.

So... what is wrong with the TouchPad? Why aren't people buying them?
post #24 of 117
Quote:
Originally Posted by Pooch View Post

well, then, they're just not very good salesmen, are they?

Actually, they are probably good salesmen.

They are probably pushing the iPad which has higher consumer visibility, higher average sales price, higher margins, higher customer satisfaction ratings, lower failure rate, lower return rate and probably some ancillary behavior like higher accessory purchases (the latter is where retailers often make fatter profits).

Oh, and way more volume (units sold).
post #25 of 117
Who cares about best buy. I am more interested in how many amazon sold. Best buy and brick and mortar electronic stores are on the way out. Apple store is kind of an exception because it's a store, an experience center (which will stick around and maybe even grow in my opinio. For apple and non apple alike) and a tech support center.

When people go to buy stuff other than food they go online, and I think that is where the key lies. If amazon sales are as dismal I doubt we will see touchpad 2. Perhaps a corporate only, but not consumer.
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post #26 of 117
Further proof that the iPad has a 95% marketshare of the tablet market, not the 60-70% figure that Wall Street Journal and others have been tossing around.

Please update the AppleInsider app to function in landscape mode.

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post #27 of 117
Who cares how bad the sales of HP WebOS tablets are going. Bet the barn by integrating WebOS to your PC desktops and laptops and make that grand ecosystem you were talking about!

They will come...... NOT!!!

Build half-a$$ hardware, half-baked software and you get consumers that know better than to buy your product.

Why haven't any of you Apple competitors figured it out yet?
post #28 of 117
"One tipster claimed that a senior HP executive will soon travel to Minneapolis to smooth things over with Best Buy executives."

I assume he’s bringing a very large van?
post #29 of 117
Has anyone considered that Apple is going to bankrupt the "old line" technology companies? This is pretty much like the cold war.

Everyone is killing themselves to make an "iPad killer" and/or an "iPhone killer" and/or a "MacBook Air killer" and/or a "MacBook Pro killer". And they're failing. Miserably.

Google just spent more than its annual profits on MMI, just to compete with Apple so they can *give* away Android. HP is wasting time trying to sell TouchPads and hasn't managed to make either a decent Palm-based phone or tablet. Microsoft is creating a Windows 8 that may well abandon their existing Windows 7 base due to its radically different, touch-optimized UI.

The JooJoo. The Notion Ink Adam. Intel's Ultrabook initiative. Intel's Atom initiative. nVidia's Tegra. All promised to set the world on fire, but fizzled like a bad cigarette lighter.

Meanwhile, Apple has enough money to sit back and do nothing until all of these have spent themselves into oblivion.

If Steve Jobs can do all this, having literally brought Apple back from the brink of bankruptcy, while being monstrously ill, can you imagine what he would have accomplished if he were well? Even if Apple implodes tomorrow, every CEO of every Fortune 500...no, every Wilshire 5000 company should resign in shame and embarrassment.

Absolute genius.
post #30 of 117
Quote:
Originally Posted by sflocal View Post

Who cares how bad the sales of HP WebOS tablets are going. Bet the barn by integrating WebOS to your PC desktops and laptops and make that grand ecosystem you were talking about!

They will come...... NOT!!!

Build half-a$$ hardware, half-baked software and you get consumers that know better than to buy your product.

Why haven't any of you Apple competitors figured it out yet?

Then why do people still buy Dell computers, they are half-rate hardware with half-baked software and they are still pushing out more Desktops than Apple can sell iMacs and Mac Minis, and HP is still selling more laptops than Apple.

And we all know Apple laptops are at the top of the game as far as industrial design, and the software, OS X Lion and iLife, it's the best on the market.

The reason? You can get an HP/Dell laptop for $299 or $399 when Apple starts at $999 for the bare-bones tiny MacBook Air, and goes up to $2700 for their 17" offerings.

Apple can't compete on those price lines. Simple as that. If Apple really wanted to do the volume selling of laptops, they need to get their prices more in line with the rest of the market. This has always been the reason people turn to PCs, simply because they cannot afford the Mac alternative...the iPads and iPhones can be easily got for the sub-$500 range, that is why they sell like hotcakes.
post #31 of 117
Quote:
Originally Posted by Twelve View Post

Has anyone considered that Apple is going to bankrupt the "old line" technology companies? This is pretty much like the cold war.

Everyone is killing themselves to make an "iPad killer" and/or an "iPhone killer" and/or a "MacBook Air killer" and/or a "MacBook Pro killer". And they're failing. Miserably.

Google just spent more than its annual profits on MMI, just to compete with Apple so they can *give* away Android. HP is wasting time trying to sell TouchPads and hasn't managed to make either a decent Palm-based phone or tablet. Microsoft is creating a Windows 8 that may well abandon their existing Windows 7 base due to its radically different, touch-optimized UI.

The JooJoo. The Notion Ink Adam. Intel's Ultrabook initiative. Intel's Atom initiative. nVidia's Tegra. All promised to set the world on fire, but fizzled like a bad cigarette lighter.

Meanwhile, Apple has enough money to sit back and do nothing until all of these have spent themselves into oblivion.

If Steve Jobs can do all this, having literally brought Apple back from the brink of bankruptcy, while being monstrously ill, can you imagine what he would have accomplished if he were well? Even if Apple implodes tomorrow, every CEO of every Fortune 500...no, every Wilshire 5000 company should resign in shame and embarrassment.

Absolute genius.

Somewhere along the line someone will become a true full competitor to Apple when it comes to quality...Market share they are no where near the kind, but profits they are.

I am never a fan of one company becoming king, and I hope when all this sue, counter-sue, buy, sell, alter, drop, change, adopt, advance sh!t is done we end up with a lot of quality, at least 3 major OS's in the mobile realm (iOS obviously, a more mature Android, and probably WP7 though it's so boring despite being good looking) the same 2 in computing (Windows and Mac) and a hell of a lot of advanced tech for us consumers.

Anyone wishing for the death of any competitor is retarded. Which unfortunately a lot of cult-like iPhanboys seem to want. Fandroids as well, don't get me wrong, but Apple centric sites seem to be more than happy to wish death to companies than Android centric sites.

I want a cleaner, smoother, faster, more functional computing future. And these times are the foundation for that future.

People aren't falling for cheap poorly functioning devices anymore, Apple has changed that game...Android OEMs are upping their build quality and things are only going to get better for us all. Recent PCs are beautiful machines (high end ones anyways) and yea.

So thank you Apple for ushering in the future... but I sincerely hope you are not alone at the top.
post #32 of 117
Quote:
Originally Posted by WardC View Post

Then why do people still buy Dell computers, they are half-rate hardware with half-baked software and they are still pushing out more Desktops than Apple can sell iMacs and Mac Minis, and HP is still selling more laptops than Apple.

And we all know Apple laptops are at the top of the game as far as industrial design, and the software, OS X Lion and iLife, it's the best on the market.

The reason? You can get an HP/Dell laptop for $299 or $399 when Apple starts at $999 for the bare-bones tiny MacBook Air, and goes up to $2700 for their 17" offerings.

Apple can't compete on those price lines. Simple as that. If Apple really wanted to do the volume selling of laptops, they need to get their prices more in line with the rest of the market. This has always been the reason people turn to PCs, simply because they cannot afford the Mac alternative...the iPads and iPhones can be easily got for the sub-$500 range, that is why they sell like hotcakes.

Well I'd say a good 40% of the Windows PC buyers can't afford or can't see the added value in Apple PCs...probably less but I'm being generous. The other 60+% (people like me) honestly find Windows more appealing.

Using both in my day to day (Mac for work, PC for freelance) it is no contest which is better (opinion of course) and a lot of people have similar feelings.

Your argument is relatively sound but that tidbit sounded eerily like the argument that the only people buying Android devices are people who are too broke/cheap/poor to buy iPhones as if the high end Android devices don't cost just as much as an iPhone.
post #33 of 117
The weird thing here is that Mac users have much higher customer satisfaction ratings than Windows users. Same with iPhone users vs. their competitors.

It appears that saving money isn't all that gratifying.

Apple doesn't bother competing on price. You can buy a 4GB iRiver MP3 player for $25 whereas the 2GB iPod shuffle goes for $49. And yet Apple has something like 90% of the PMP (Personal Music Player) market. Cost competition alone isn't sufficient, at least when we're talking about Apple.
post #34 of 117
Quote:
Originally Posted by msantti View Post

Gee, who did not see this happening?

Oh yeah, Apple haters.

I think we can put a fork in WebOS.

Kind of a shame. Its better than Android.

Google just threw WebOS a lifeline by buying Motorola. all the other Android dependent smartphone OEM's have to start looking for OS alternatives immediately. if HP is smart and begins to license its smartphone WebOS pronto - which is in pretty good shape - it could have a big market impact real fast - 6 months to a year. that might even help prop up WebOS tablet sales a bit too.

let's see if HP has the brains to jump on this unexpected opportunity.
post #35 of 117
Quote:
Originally Posted by WardC View Post

Apple can't compete on those price lines. Simple as that.

No, it's not that simple. You've seen the following, of course...

"Asustek Computer is hoping to release two Ultrabook models, an 11.6-inch UX21 and 13.3-inch UX31, later this year. While the UX21 will reportedly retail for $1000, the UX31 will cost $1600, a $300 premium on Apple's $1,299 13.3-inch MacBook Air."

This is in line with Intel's Ultrabook initiative, and it shows that Apple's competitor's can't build an Apple-class product at a price less than Apple's. Why? They simply can't compete with Apple's supply chain. Same for all of the people who tried to match Apple's prices on equivalent tablets. (Building a cheap 5" tablet isn't equivalent.)

So... given the above, what makes you think that Apple couldn't leverage its supply chain and compete on the low end if they really wanted to do so?

They don't, of course. It would dilute Apple's brand to built commodity POS plastic boxes, and why chase after nickels and dimes when you can be pulling in the majority of the high-end profits?

One report said that Apple got 90% of the sales of computers costing $1,000 or more. Ninety friction' percent. And it's not an "Apple Tax" when the competition can't build them at that price either...
post #36 of 117
Quote:
Originally Posted by Michael Scrip View Post

So... what is wrong with the TouchPad? Why aren't people buying them?

Sales are disappointing because there was never much of a market in the first place.

Your average consumer is unlikely to have done much in the way of trawling tech sites to find the mediocre reviews and make much of an informed choice, they just went out to buy an iPad and not some other iPad clone, be it webos or android.

Also constantly fiddling with the price does nothing to promote regular sales patterns as it just encourages people to hold off buying and try and second guess when the next price drop is coming.

Meanwhile apple can still barely make iPads fast enough to keep up with demand.
post #37 of 117
Quote:
Originally Posted by DaveMcM76 View Post


Sales are disappointing because there was never much of a market in the first place.

Your average consumer is unlikely to have done much in the way of trawling tech sites to find the mediocre reviews and make much of an informed choice, they just went out to buy an iPad and not some other iPad clone, be it webos or android.

Like I said... there are HP TouchPad commercials on TV all the time.

Let's say someone goes to Best Buy to buy a TouchPad after seeing it on TV. Then they end up choosing a more expensive iPad instead?
post #38 of 117
Quote:
Originally Posted by AppleZilla View Post

'Consumers Don't Want Tablets, They Want iPads.'

I agree, but the competitors are actually pretty nice devices (Galaxy is my favorite non-iPad, but HP seems nice too based on my limited test run). They are all much more responsive than I anticipated.

On the other hand, I really don't see how somebody would pay for something similar to an iPad when you can get the real deal for the same price.
post #39 of 117
A big problem with the Touchpad is that its future is uncertain. Even if you're like me and think it's kind of cool, no one wants to end up with a product with no software, accessories, or even basic security updates.

Accessories are another huge factor. With all these Droid tablets there's no single form factor to target when designing certain products, like say this.
post #40 of 117
(removed way off topic quote)

and this is related to the HP tablet how???
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