Last week, I praised HP CEO Meg Whitman for reversing the decision to spin off their PC business. While the stated reasons were purely financial, I believed that Whitman had sincerely learned from another company’s mistakes (Netflix) and that this was a great sign for future decisions made by the new CEO.
Then HP announces that they aren’t backing out of the tablet business, and the Slate 2 is shown to the public, a Windows device with a stylus, starting at $699. All of a sudden, I’m not so sure I was correct in judging the new HP leadership favorably.
Let’s review the events of the past couple of months. On July 1, HP releases the Touchpad amidst hype that its purchase of Palm and WebOS was finally coming to fruition. Proponents and fans of Palm’s well-designed but ill-fated mobile OS rejoice as it reaches the public eye again and is tweaked for tablet use. Reviewers and consumers aren’t so sure that this is the best implementation of WebOS, and complain of sluggish UI, bugginess and general but expected lack of quality tablet software. They also released it at $499/$599 (16GB/32GB). Naturally, it failed miserably.
Fast forward a very short few weeks, and HP can’t salvage the Touchpad. They decide to discontinue it and are forced to sell off the remaining retail stock at $99/$150. All of a sudden, it’s Christmas in August, and people are lining up outside Best Buy for hours to try and snag one of those super cool HP iPads (Overheard in line at 7AM outside my local Best Buy). New reviews popped up raving about how different and simple WebOS is, and that HP released a patch that speeds up everything and fixes a lot of the issues that bogged down the release version. Deal-hungry consumers were refreshing retail websites 7 times a minute in anticipation of stock delivery. It was a pretty big deal.
Unfortunately for those who didn’t get one at rock bottom price, HP did actually discontinue the Touchpad, and it seemed like it sulked away with its tail between its legs, upset but proud owners of some great new market research about what makes consumers tick.
What can we learn from the Touchpad fiasco? I’m sure members of the HP board of directors asked this question quite a few times, and I’m hoping that the answers revolved around the following tenet: Don’t release a device that consumers will perceive to be inferior to the iPad (Let’s face it: Just about anything that isn’t an iPad), and then make it more expensive than the iPad. This is common sense. The moment that the Touchpad dropped its price point, it sold like Bieber tickets.
When HP puts out a Windows 7 tablet that is only slightly more updated than its predecessor, running Windows 7 on an Atom processor, and it uses a stylus, I applaud the effort to let WebOS lay low for a bit and attack the tablet market from a different angle. When HP sells it starting at $699, I find out which executive was responsible and fire him/her immediately. That’s outrageous. Selling anything with an Atom processor for more than $300 is a tough sell to begin with when Samsung is shipping their Chromebook with an i5 for less, and the Windows 7/Stylus concept hasn’t been wildly successful in any other product to date. The timing couldn’t have been worse; the months before a slew of new Android tablets are released and old tablets are upgraded to Android 4.0, Ice Cream Sandwich (ICS, if you’re cool), is simply not the right time to release an expensive Atom tablet with a stylus.
A true Windows 8 tablet may have deserved that price point, but that’s anyone’s guess this early in its development. If HP learned anything from the Touchpad (and they obviously didn’t), it’s that price point can and will make or break a product. The Slate 2 is too early, too expensive, and will continue to diminish HP’s tablet prospects for the future. It’s decisions like these that make me wonder if HP really should have spun off its PC division after all. If this how you get back into the tablet game, maybe you should just stick with enterprise services.
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