Apple enthusiast magazine Beatweek on the "Failure of the TouchPad"
BeatWeek's Bill Palmer on what he deems as HP's relief of the "failure of the TouchPad" before Apple's lawyers had a chance to sue HP due to the hardware similarities between it and the iPad:
This week HP cut the price of the Touchpad, again, this time with a “please take this off our hands before we have to landfill it” bent which suggests that the product will be discontinued before long. And if you think we’re kidding about HP’s top brass wanting things to play out this way, think again.
Of course, as GigaOm's Kevin Tofel astutely opined in his article about the price cuts last week, this is business as usual for HP. It's apparent that HP is currently in "let's get these in as many hands as possible as fast as possible" mode, and judging by Amazon's number 2 and 5 slots for best seller in the tablets section, the TouchPad isn't exactly floundering.
The management at Hewlett Packard has changed since the days of Carly Fiorina’s reign of error, but the philosophy at the company appears to be intact: HP is a printer company.
Before we continue, one thing needs to be cleared up for Palmer and anyone else holding this fundamental misunderstanding of HP: HP is an enterprise software, hardware and services company first, and a retailer of consumer electronics second. The PSG group is certainly the largest, bringing in some 30% of HP's revenue, but the rest comes from other sectors, primarily enterprise related.
Cited as groundwork for the 2010 Palm acquisition is Hewlett-Packard's deal with Apple in 2004 to sell HP branded iPods:
In fact the groundwork was laid for it last decade when, instead of launching its own MP3 player, Fiorina struck a deal with Apple and then ultimately released an “HP iPod” which was literally nothing more than Apple’s own iPod with the HP logo etched on the back of it. Suddenly, HP had the iPod and it didn’t have to lift a finger. Nevermind that the deal took shape even as Apple was reading iTunes for Windows so that it could sell its own in-house iPod to PC users, making the “HP iPod” wholly irrelevant.
Of course, HP preinstalled iTunes on its computers from the get go.
Nevermind that the HP iPod bombed. It sounded good to shareholders at the time, and created the illusion that Hewlett Packard was something more than a printer company.
The exercise did prove to be unsuccessful, and towards the end of the agreement in 2005 HP's iPod sales accounted for some 5% of overall sales of the MP3 player.
That's irrelevant, though, since comparing the 2004 iPod deal and the buyout of Palm is a fool's errand. The Palm purchase was a different animal entirely, and unlike any time in HP's history the company is now in control of the entirety of the product from both a hardware and software standpoint. And to show how serious HP is about this, there has been a significant shift of resources to propel the significance of webOS in the company's strategy, with little speaking louder than the fact that Stephen Dewitt now heads up the Palm division.
The TouchPad was trickier. HP acquired the webOS touchscreen operating system (along with former Apple honcho Jon Rubinstein) when it bought dying Palm, but while that came with some existing Palm Pre phone designs, there was no tablet blueprint.
True; work on the TouchPad didn't begin in earnest until after the acquisition was complete.
Unwilling or unable to strike another iPod-like deal with Apple, HP went ahead and made its own HP-branded iPad instead, but running its own webOS. In the face of the iPad’s overwhelming tablet dominance, and Android being the position to lap up the minority of tablet buyers who trick themselves into buying something other than an iPad, there never was room in the market for the TouchPad.
It's bold to assert that there isn't enough room in a space that's less than 2 years old. Analyst firm Barclays anticipates that there will be some 62.7 million sold before the end of 2011, with 23.7 million of those being non-Apple tablets. That's a lot of people "tricking" themselves into something other than an iPad, and that number is set to increase by an order of magnitude next year. HP's chances here are anyone's guess, but few of the Android OEMs can match the company's raw distribution and supply chain capabilities.
But its impending failure doesn’t matter in HP’s eyes; it launched a foray into the tablet market, expanded upon its webOS investment, and brought it to a close before the lawyers could get involved.
Yes, Apple was awarded a patent for the industrial design of the original iPad, but not for the overall tablet form factor. Sure, the TouchPad is similar to the original iPad in many respects -- screen size, location of the "home" button and front facing camera -- but chances are close to slim that it's similar enough to warrant any legal action from Apple.
Wrapping up the article is this gem.
It might not count as a victory for any other company out there. But when your company’s mission statement is written on mirrors using smoke, suffice it to say that HP is probably calling this a good day.
As a quick aside, we mention Beatweek as an Apple enthusiast site since a good number of its articles -- most notably those by Palmer who is the publication's editor in chief -- are Apple related. The author bio on Beatweek.com is telling: 12 of his most recent 20 articles are Apple product accessory or iPhone news related.
