So what will HP do with all those unsold tablets? Either sell them off at "fire sale" prices, or bury them in a device "graveyard," maybe even next to Atari's E.T. The Extra-Terrestrial.
Now that HP has made it publicly known that it's ditching webOS-based gadgets like tablets and smartphones, what's to become of TouchPad tablets stockpiled in retailer warehouses? One theory is that the company plans to dump them all in a landfill thanks to the American government.
While HP hasn't said anything official, hardware dumps by previous manufacturers pave the way to a similar doom for HP's tablets. One of the most notorious dumps to date is Atari's abandonment of nearly five million E.T. The Extra-Terrestrial and Pac-Man cartridges back in 1983. Both games were so horribly conceived that many consumers actually brought them back. In addition to unsold consoles, Atari stuffed 14 trucks full of those rejected cartridges and dumped the entire load into the city landfill in Alamogordo, New Mexico.
So why not just sell off the inventory at a discounted price? Because it seems that companies make more money in the long run by simply writing off the unsold inventory for tax relief. With that in mind, any hopes that HP will actually liquidate its stockpile by drastically reducing the tablet's price seem pointless. Then again, the company is reportedly offering retailers a case payout for the devices, meaning that they can return their inventory of TouchPads, or use the cash to sell the devices at "fire sale" prices.
If the retailers bite and they decide to sell the tablets at a huge reduction, consumers may think the deal is a steal. But the tablet will also have its limitations given that the operating system is "on hold." Updates are unlikely, and given that consumers owning a webOS product will be minimal at best, it's unlikely that developers will churn out additional apps. If anything, hackers may enjoy nuking the webOS software and (possibly) installing Android 3.x "Honeycomb" instead.
Thursday's news that HP was bailing out on webOS tablets and smartphones was quite a surprise, leaving many to question why the company didn't give the OS a chance. But HP CEO Leo Apotheker said that the decision was difficult but necessary. Cathy Lesjak, HP’s CFO, added that the company expected the TouchPad to establish itself as the #2 platform, but its pricing didn't produce demand. WebOS also needs further development, and ultimately the risks of continuing on as is far outweighed the possible rewards.
“If you look at the run rate losses there, you can attribute them pretty much to Palm,” Lesjak said.
So what ultimately killed the TouchPad? Rival devices sporting Android and iOS? Was it the device's hardware that really kept it from succeeding? According to reports, the tablet's hardware set actually stopped the webOS team from innovating beyond certain points, imposing constraints. The team said it loaded webOS on Apple's iPad and found the software to run "twice as fast" than its home device. The team even reportedly didn't want to develop for the TouchPad and Pre smartphones because of the hardware limitations. With all that in mind, if webOS performed horribly on the current devices on the market, word-of-mouth may have ultimately killed off HP's plans.
It will be interesting to see what happens within the next few weeks. Will retailers offer the doomed tablet for $150 or possibly even cheaper, or will they be sent out to the pasture like Atari's E.T. The Extra-Terrestrial and Pac-Man cartridges? Let's hope for an awesome fire sale.