Best Buy upset with HP over selling just 25K TouchPads - Page 2

iPad has mass media exposure that other tablets don't get - you see reporters and presenters using them on tv shows all the time so people recognise the product and know the name. TouchPad is close enough to iPad that people may not even recognize it as being a different product.

I'm basing this on experience with the rest of my very non technical family and I wouldn't be overly surprised if a lot of people saw TouchPad adverts and failed to realise it wasn't actually an advert for an iPad... from the few TouchPad adverts I've seen here in the UK they are very similarly styled to the iPad ads, and people may just see a 10" tablet with "Pad" in the name... same thing surely... They then walk into best buy or whereever and ask for "that tablet thing I saw on the tv... the something pad"...

I'm not trying to cast all non tech folks as stupid, but having spent years trying to do tech support / tech education for my extended family there are a lot of people out there who really can't tell the difference - I'm related to at least 5 of them.

about as much as most articles at appleinsider actually have to do with apple.




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Locally, I can see why apple sells. Because its the only tablet retailers have actually set up. APple gives retailers virtually no margin, while making them provide a dedicated area for apple products. Other tablets are jammed in with a pile of computers/ereaders. Most are not connected to any wifi (which the ipad is) and completely and utterly useless for anyone trying to see what the products are like. I have an ipad, my wife has an ipad. I want to see what the options are like, but I go in, the android tablets are locked, the HP (just released and no price cut for us...) is stuck on setup wifi screen. Walk around the other side, the Blackberry is in the same state. But then again, this stupid place locks all computers except macs.

Once again, this is not always true - not even close.

One of Apple's best sellers is the Air. PC vendors can't beat the Air on price - and are begging Intel for price cuts just so they can compete. The iPad is priced right in line with most of the competition (other than clearance sales like TouchPad). In many cases, a 7" tablet from a competitor will cost you as much as a 10" iPad.

60% of Windows users find Windows more appealing? You're hallucinating. The overwhelming majority of Windows users never even consider a Mac and don't know anything about it. Whether that's because of FUD or network effects or price doesn't really matter. Only a very small fraction of Windows users seriously consider a Mac.


You are in the minority. Apple consistently has much higher customer satisfaction ratings than anyone else. And there is anecdotal evidence that people who have used both prefer the Mac - by a significant portion.

Wonder if HP will charge Best Buy a restocking fee?

What a lot of us geeks don't get is that the man in the street is not a geek. He doesn't call these new computer thingies tablets, he calls them iPads - just like he goes into a shop for a vacuum cleaner and asks for a 'Hoover' he goes into a shop and asks for an iPad. I know at least one person who went into a phone shop asking for an iPhone but came out with something else because the salesman (who couldn't offer an iPhone) told him it was the same as an iPhone. My friend didn't know the difference and now regrets the purchase but has to wait for the end of his contract.

My sister (who is completely non-technical) and her kids all knew what an iPad was. They were all over me when I saw them recently and had my iPad with me. And my brother-in-law is a died in the wool PC Gamer Windows fan. Yet the non-tech part of the family have two iPod touches, an iPhone and an iPod shuffle between them.

The reason Best Buy overstocked itself probably had something to do with them listening to the noisy anti-Apple brigade and equating noise to volume. They chose to take the risk of over-ordering the TouchPad (presumably to hit the lowest price point on the HP discount price scale) and only they should pay for it.

Yes, it was Best Buy's mistake to order so many.

However, BB does have a legitimate complaint against HP. They were promised a good quality product. To the extent that the TouchPad failed to live up to the marketing hype, HP does have some liability. Beyond liability, of course, is the matter of credibility. Even if HP didn't overhype the product, BB sells a lot of HP products and it may not be in HP's best interests to force the issue on a POS product that no one wants.

BestBuy has approximately 1200 retail outlets (plus websites) to sell equipment through. That's roughly 200 units per storefront, which sounds extremely high.

People with the Palm Pre Plus generally love them. From what I hear, WebOS is great. I've not really used any WebOS devices, but the demos I've seen look slick.

I think its great to have alternative, competing OSs on the market. I've not seen anything like that since the days of the Trash 80 vs. the IBM PC vs. the Apple II. Things were more complex and interesting (albeit more confusing for consumers) in the pre-Macintosh, pre-Windows era.

I expect that Best Buy is a big enough customer that they and HP will find common ground. The alternative is for BB to sell most of them to a liquidator for pennies on the dollar, which would be very bad for HP. If the sell them to NewEgg, for example, who then blows them out for $99, it would ruin the market for WebOS, maybe forever.

HP needs to step up to the plate. Take the bullet. Keep the customer satisfied. And many other cliches.

Yep. Kinda hard to sell stuff no one really wants to buy.

Click on the "completed listings" box to see what they really sell for. The "Buy It Now" prices are wet dreams, and the current auction prices are low until the last 30 seconds of the auction.

The other big problem is that HP f-ed up the release and no one wants a half-baked iPad non-competitor. All sorts of problems with it, to which HP later admitted, almost proudly.

It's as if Rubinstein loves to hate himself.

Not sure what HP was thinking.

I say this sincerely... $99 will appear to be too much for this tablet. Someone would really have to know what they are buying to spend that much.

It's sad because webos is a fine operating system but HP really missed its opportunity to make a splash. Now they may never stay in the game because of this one pathetic failure.

I can't imagine being one of the 15,000 to 25,000 people who bought one at full price. I'd be returning it to BB.

WebOS is useless with not enough apps, and most importantly, owned by a company nobody trusts. Nowadays trust is the most important thing when selling tablets because it's a luxury and non-essential item. That's why all the Android tablets failed miserably.

Could be people dislike Russel Brand and hate anything associated w/him. I don't, but some might. I think the main thing wrong w/the TouchPad in most people's eyes is it lacks an Apple logo and is not called the Ipad.

Well after this leak (once verified of course, cough cough) I guess HPs investors will know and can be duly spooked!

I think HP should do a deal with BestBuy and do a promotion to give one of their tablets away with every set of HP inks, I mean there must be enough profit in those damned inks!

If they don't, HP can't legally call all the ones that are returned "sold", now can they.

but but.... I thought webOS does Flashi! What happened?
ROTFLMAO

Ah all these iPad "killers!".... Why don't they focus on coming up with a legit iPad challenger first and leave the "killing" for later?

I feel bad (in a sarcastic way) for those 25,000 FOOLS who bought in to a product that will be killed soon. They thought HP is backing this, we have a future....wrong!

Windoze tablets next? Possibly with a whopping 2.5 hour battery life?

Not at all. $99 would be more than fair. Lots of people have spent considerably more than that for a simple eReader that doesn't do anything else. Paying $99 for a tablet that will function as an eReader as well as doing lots of other things is very reasonable. Heck, at $99, I might buy one and give it to my daughter to watch movies when we're traveling.

No, that was first. They got surprisingly good battery life. You've missed out on a decade of history.

But Windows was never meant for a touchscreen. And the tablets were huge.

Windows Phone 7 tablets will be interesting, though (Or Windows 8 tablets, whichever they decide to use).

That is fine except virtually no one bought a Palm Pre. Apple can sell iPads to there existing base of iPhone owners. Motorola, Samsung, etc can sell Android tablets to the existing base of Android smartphone owners. But for the TouchPad to be a success HP must appeal beyond Palm Pre owners as there isn't enough of them.

Therein lies the problem. You've answered your own question. People aren't buying them because people dont want to pay for them. Look at the first quote, where you read someone saying "They would take one over an Android". Tablets are not gifts, they are not awarded prizes.. they luxury devices requiring payment first. Noone is giving or taking anything here, you have to purchase it first.

In other words its easy to woulda, coulda, shoulda. Its another to thing to look at what you will actually spend your hard earned money on. If someone walks into a store looking to spend their money on a tablet. There are very few reasons to purchase a $400 HP Touchpad/Transformer or $500 Xoom/Tab.. over a $500 iPad2. Very few reasons.

As someone has said. There is no market for tablets. There is a market for the iPad.

I don't know about that.

Apple sold nearly 10 million iPads in the previous quarter which comes out to nearly, but not quite, 250k units sold per week.

Best Buy didn't order too many of them. They just aren't selling.

If say roughly 250,000 units can't be sold by Best Buy nationwide and through online channels, something is very wrong with the product. Even if zero sales were made online, an average of 200 units of a brand-new tablet per store for a one month period is a very simple target.

Even if Apple sells 1 million iPads a month in the US alone, that's over 32,000 units PER DAY.

I still don't know why people think WebOS under HP really has any future at all. It's just rubbish, and will take another six months to be anywhere close to the iPad.

Maybe HP can turn things around, but this is really worse than anyone thought. The anti-Apple sentiment, geek fantasies and blogs desperate for clicks and anything non-iPad are proven once again to be not even in the same universe as our current reality.

It's sad how often those who do not understand product categories, markets and relative value of competing products fall back to such ridiculous statements like this. Honestly, do you think Apple would put their logo on the product known as the HP TouchPad? Really? How does the build quality stack up to an actual Apple product? How about the OS? If you're breaking new ground with a completely different type of product, you can put something out that's sort of half baked and get away with it because everyone understand there was a lot of innovation going into your accomplishment. If you're entering an established market with just another "me too" product and you're trying to compete with a very polished product with a very large and established ecosystem... what do you expect? This product was DOA for very obvious reasons.

Also, if you're going to distinguish your product in some way, it should be for a feature that actually works. Flash on mobile is a big joke and it only serves to lower the end user experience. It didn't help all of the Android tablets, it didn't help RIM and it's not going to help HP.

I think that's actually 3 words. Or 1 acronym.

But regardless... it's accurate!

Uhm I'm not falling back to anything. It's a simple fact, the Touchpad is not as high quality an item as the iPad, it doesn't have the number of apps, etc. For the general buying public tho (read:not geeks like us), it boils down simply to the fact that it is not an iPad, so they don't want it. That was the angle I was approaching from.

My cousin was able to get a 16 gigabyte Touchpad for $299 out the door a few weeks back (during Tennessee's no sales tax weekend). Staples had a $100 coupon on the touchpad for a few days right before HP cut the price $100. He has a Palm Pre phone so it worked out well for him. I personally would have recommended an iPad but for $299 and having a pre phone I couldn't fault him. Seemed like a real good deal to me.

What HP and other tablet makers don't get is that people want not just an iPad, but the experience and the ability to say "I have an iPad".

Someone I know was boasting how he decided against the iPad because it didn't have a USB port. I asked, how often are you going to use an USB port on your tablet? His answer ... well, I don't know, but if I need it, it's there.

This is the flaw in HP and others thinking. Apple is great at designing and delivering a product that the customer doesn't know they want. Apple competitors design and deliver products based on what they (the company) think customers need.

Big difference.

Nah!

What both Best Buy and HP want to avoid is adding additional real costs to an already thin profit potential.

It's the distribution theory of "re"...

Re-moving from inventory, re-palletizing, re-loading, re-transporting, re-ceiving, re-inspection, re-stocking, re-financing inventory, re-duced margin... lead to re-grets, and often, re-placement of management.

Add to that customer re-turns and it becomes a re-al lose-lose proposition.

What HP will do is extend payment terms for, say an additional 60 days so that
<weaslewords>
the full benefit of the TouchPad's recent price adjustment can be fully realized by the consumer
</weaselwords>


The thing that made me laugh is this:

" a senior HP executive will soon travel to Minneapolis to smooth things over with Best Buy executives."

Is the exec going to ride the Wells Fargo Stagecoach from Palo Alto to Minneapolis? Will he send a Telegram when he gets to Dodge?

Huh? You say Google getting into the hardware business is going to get android cloners looking at alternatives, so they would go to HP which also makes OS/hardware? Am i missing something? what is the difference between the two?

The you have Microsoft/Nokia, with their horrid Microsoft Windows Phone 7 OS.

Companies had a choice when entering the phone business...develop their own OS/Hardware or go the cheaper short term route and be a "mee-too" cloner with nothing to differentiate your products. Classic short term thinking has led them to be in the passenger seat of the losing car.

I'll back that bet action!

As to the 7" SammyTab -- they just did what a golfer does when he hits the ball with the driver...

...They "smoothed" it!

Every retailer claims that there's no margin on what they sell. I've had retailers tell me they make no money on Apple hardware, but then they also claim that there's no margin on software. I refuse to believe that they only make money selling accessories like cases, warranties and the magazines or candy they sell at the register. While the manufacturers have substantially reduced margins over the years, it's not credible that retailers have no margin on practically everything. And if that is the case, then the retailers should refuse to sell such products.

The question in this particular case is why did Best Buy make such a large inventory committment to the TouchPad before they had any idea whether it would sell? (Unless HP said they'd take them back if they didn't sell.) When I've gone into BB to inquire about products, they check inventory and they usually actually have very low levels, so I assumed that this was their strategy - to acquire inventory on demand.

Terrific post.

Welcome to the boards!

Add: Just noticed that you've been a member since April. Post more often!

Bright minds think alike.

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1) It sucks.

2) It isn't an iPad (see #1)

I agree that there is an opportunity here, but it will take some finesse to pull it off.

Say, HP leaves the phone market altogether -- HP isn't really very good at it.

Then they make deals with Sammy, HTC, etc. to use WebOS on their phones.

Part of the deal is that the phone mfgrs won't sell their own WebOS tablets -- they really aren't very good at it.

Aside: It appears that phone manufacturers and carriers aren't very good at selling tablets -- Apple seems to have "cornered the market" of "how to sell tablets"

So, HP reserves the right to sell WebOS tablets for itself, and targets business, first (pay developers to write business apps) then consumers (pay developers), later.

HP sets up the WebOS ecosystem and encourages (initially pays for) development of phone and tablet apps, alike.

HP makes deals with its WebOS phone partners where each sells the others products into their markets -- HP sells Sammy and HTC phones to business (and some consumers) -- Sammy and HTC sell HP Tablets into their consumer markets.

They could even have a common branding using the WebOS (or some better) name.

Basically, Sammy and HTC would be providing HP with WebOS phones and HP would be providing Sammy HTC with WebOS Tablets.

Edit: Hmmm... I wonder who will manufacture those WebOS HP Tablets.

That's an opportunity that, if realized, could benefit all the players: the manufacturers, the developers, the business market, the consumer, and the industries (phone, tablet, computer).

I think one of many reasons are the commercials. HP is using celebrities to sell I guess thinking we'll think, 'cool he/she says it's good - let me go buy one,' that doesn't always work esp in tech. While Apple uses emotions to connect to people in their commercials. Almost every Apple commercial in the past 2-3 years makes the viewer have some heartfelt emotion (like the early FaceTime ads showing the soldier talking to his gf and the deaf people signing and the grandfather looking at his grandchild on FaceTime. The iPad ads play on the parents and women's emotions showing how their kids can use it to learn and adults can use it for everyday task, etc). I really think that is one major reason the general people want Apple products, effective commercials that connect. Also Apple truly shows what people can do with their products instead of HP, motorola and others basically wiping screens across real quick and repeating over and over how their item runs Flash. Marketing/advertising are king!

I haven't heard of any wide "distrust" of HP... especially when compared to Google.


There is a rather simple way to resolve the WebOS apps issue -- pay developers.

The payment could take the form of:

-- up front payment
-- bonuses for early availability
-- inclusion in WebOS tablet and phone ads and promotions
-- guaranteed (underwritten) sales of the apps
-- special bonuses for multiple or follow-on apps.

That is what would get the attention of WebO$$ DEVELOPER$$ (sorry for yelling)