Today on Google + I saw the following post from Francis:
We’re writing to inform you that your order XXX-XXXXXX-XXXXX from onSale has been canceled because the item(s) you purchased were out of stock. Please return and place your order again at a later time.
When I returned to my desk I checked my email … and of course I had the same thing waiting. The ‘item’, of course, was the HP TouchPad – recently discontinued and then put on fire sale clearance by HP for $99/$149 for the 16 & 32GB models.
These emails are amongst the literally tens of thousands sent by Amazon.com on behalf of onSale, a MacMall affiliate. And they were not entirely unexpected. Reports are that onSale had 10,000 TouchPad systems and accepted 100,000 orders before shutting down. That meant that either HP had to come up with an additional 90,000 systems … or a lot of folks would get ‘oops’ emails.
And it wasn’t just onSale – Matt Miller is reporting that Barnes & Noble is in a similar situation … which complicates things just as back to school shopping is in high gear!
Other retailers have had issues with orders, are being pressed to price match, have been gouging customers in this hysteria, and so on.
And while I can hear many saying ‘so how is any of this HP’s problem?, I believe that this situation is very much of HP’s own making and is why I call them ‘Three Time Losers’. Here are my thoughts:
- One Time Losers: A consistent failure to learn – in terms of launches and hardware. When the original Pre and Pixi launched, the main chorus of opinion was ‘great OS, weak-sauce hardware’. The company did a good job moving to Verizon in terms of the launch – but only added more memory without fixing the speed or battery complaints. After they were bought by HP, there seemed to be little coherent progress – the Pre 2 was ‘better’ hardware, but really just what the original Pre should have been. And the launch of the Pre 2 was scattered – but it looked great compared to 2011! This year HP announced the TouchPad, Pre3 and Veer in February with an ‘early summer’ release. The Veer dropped in mid-May with little fanfare – and a rather unimpressive strategy of leading with the weakest part of a line-up without a definite date for the flagship system. Then the TouchPad staggered out, and the Pre 3 was coming to Europe just over the last few weeks. None of the hardware was very competitive – EVERY review says ‘could have been better with better hardware’. The entire webOS family was ill-released, underperforming … and it seemed that HP/Palm just never listened.
- Two Time Losers: Launching a half-baked system on July 1st with virtually no notice. Within a few weeks of initial launch, HP started calling July 1st a ‘soft launch’, and were starting to market the TouchPad with celebrity commercials and so on. Then an update arrived that fixed MANY of the issues of the initial software release. Sounds great, and could have been a fantastic splash – except for that first couple of weeks. Pretty much every site reviewed the TouchPad during that time, and thousands of ‘early adopters’ got hands-on with it at a Best Buy or wherever … and all of the experiences were ‘meh’ – even from folks like myself who were webOS fans.
- Three Time Losers: For killing off an entire product line in such an inept way. After the big weekend discount and immediate price drop, tech sites were already watching HP closely as they went into their quarterly announcement. No one expected the announcement that they were terminating the webOS operation and looking to spin off the entire PC line. Very few inside of HP knew what was happening, so they couldn’t deal with the crush of information-seeking journalists. The dust hadn’t even started to settle on the announcements when the whole question of ‘what to do with the inventory?’ arose. Again, failing to learn from any of their earlier mis-steps, HP quickly calls for everyone to drop the price to $99 for the 16GB unit and $149 for the 32GB. This broke the internet – because in terms of tech-gadgets, this was better than the Lady Gaga album sale for $0.99 (also, the TouchPad is way better than Born This Way). But there was confusion about … well, everything. And it still hasn’t resolved.
Retailers such as onSale, Amazon, HP.com, Best Buy, Barnes & Noble, Staples, and the countless others who have mucked things up in an effort to grab as many sales as possible certainly all bear their own responsibility for this mess. But there is this crazy thing called ‘managing the retail channel’. HP, as the #1 computer company in the WORLD, should know this. They could have waited through the weekend and communicated the upcoming drop in a coordinated fashion to allow for preparations. They could have helped distribution and logistics and more … but instead they just sent a message that turned into a fire storm.
It is ironic that webOS has become more popular in the last week since it was summarily executed than it EVER was in life, and also that many pundits have postulated that HP has not only killed webOS but scorched the landscape for second-tier tablets in general. No longer can anyone but Apple and Samsung command $500 for a tablet – not that anyone else was selling many anyway. This last week has set the stage for a shakedown in the market, and a realignment of business models for the entire industry.
But HP won’t be there to see it or benefit – they have lost an estimated $300 million in hardware, and utterly destroyed consumer confidence in webOS in the process.