HP Touchpad tablet

The HP Touchpad tablet was, dare I say it, the biggest technological flop of the 2010s. It was HP’s attempt to compete head to head with Apple with a premium-priced tablet that didn’t run Android and, of course, didn’t run Apple’s iOS. Instead it ran WebOS, an operating system it acquired from Palm, Inc.

HP didn’t meet expectations with the Touchpad, and discontinued it after just 50 days on the market. But there are lessons to learn from HP’s experience with its tablet, even if it’s largely forgotten today.

Origins of the HP Touchpad tablet

HP Touchpad tablet
Everything about the HP Touchpad tablet screamed iPad knockoff. Including the price, and that meant HP sold 1/10 as many of them as it hoped.

The HP Touchpad tablet story (not to be confused with the pointing device on HP’s laptops) begins with the Palm Pilot. Palm was a pioneer in handheld computing in the 1990s. While Apple released its ahead-of-its-time Newton, an upstart named Palm took a more reserved approach. The Newton’s technology was superior, but the hardware struggled to keep up with Apple’s software and vision for how people would use the device. Much like the early Macs, the Newton’s software was willing, but the hardware was weak. People talked about the Newton more than they bought it. And they bought it more than they used it. Great idea. And the world was ready for it. But the hardware wasn’t.

Palm came along with a less ambitious device that was smaller, cheaper, and harder to use. But it worked reasonably well. And while people dreamed of a day when something Newton-like would work well, they used the Palm Pilot. For a time, having a Palm Pilot was even a status symbol. People compared Palm Pilots like they compare phones today. But it had a fairly short shelf life. It seemed clunky, but people put up with it when nothing else worked better. Once the hardware became powerful enough for something easier to use to appear, Palm Pilots faded away. Microsoft’s handhelds were anything but great, but if you knew how to use a Windows PC, you knew how to use those. And if you really were somebody, you had a Blackberry.

Then, in 2007, Apple released the first iPhone. Like the Newton, it looked like the future. Unlike the Newton, it actually worked.

Palm decided to respond by developing its own graphical, touch-based OS built on the Linux kernel.

WebOS: The roots of the HP Touchpad

WebOS was what Palm came up with. And in the 2009-2010 timeframe, they even managed to release a couple of new smartphones based on their new product. Then along came HP. HP had a big name and an open wallet, and seemed to be buying every past-its-prime company it could find. But the Palm marriage made sense. Palm had beat Apple once, and had a new product that showed some promise. HP had money and a well-established sales channel and a name, and it wanted some of Apple’s glitz.

It sounds laughable now, but look. It was 2010. Apple’s tablets were brand new. Its phones were in their fourth generation. Android was getting a foothold in the market, but popular Android smartphones, like the Motorola Droid, were still shipping with miniature physical keyboards. In 2010, it still looked like a well-funded, visionary technology company could nose in and capture a significant part of the market.

HP takes its swing at Apple

On February 9, 2011 HP took a swing at Apple. It staged an event in San Francisco and called it “Think Beyond,” an obvious swipe at Apple’s “Think Different” campaign. HP announced three products at Think Beyond: the Touchpad tablet, and two smartphones, all running the new WebOS 3.0, the result of the Palm acquisition.

HP released the Touchpad five months later, on July 11, 2011. The initial models sported a 1.2 GHz Qualcomm Snapdragon dual-core CPU, 1 GB of DDR2 RAM, and 16 or 32 GB of flash memory storage, priced at $500 for the 16 GB model or $600 for the 32 GB model. A more powerful model, released in August, sported a white case and featured a more powerful 1.5 GHz Snapdragon dual-core CPU, 1 GB of RAM, and 64 GB of flash storage at a price of $600. All models had a 9.7-inch screen with a resolution of 1024×768, and Beats Audio.

It’s completely outmoded by modern standards, but the specs were competitive with the iPad 2. The problem for HP was that they matched Apple’s price on the 16 and 32 GB models, didn’t have a 64 GB model available right away, and the HP units were only slightly more powerful. The CPU was 20% faster and it had 512MB more RAM, but that wasn’t enough to make up for having a name other than Apple and not having as many available applications for it.

The HP Touchpad tablet’s critical reception

The HP Touchpad’s critical reception wasn’t bad. David Pogue, then the head technology writer for the New York Times, loved it. He gushed at the tablet’s multitasking, its smooth operation, and ability to convey more information at once than Apple’s product. And Pogue has always been a big Apple fan. Besides his glowing print review, he also recorded a video for the Times, and his video review remained on the front page of its technology section of its web site for weeks, with Pogue holding the Touchpad, looking like he was having the time of his life.

And although people remember today the critical reception was mixed, it’s not like the “bad” reviews were that bad. Gizmodo said it was heavier than it looked, especially considering it had a plastic back while Apple’s had a metal back. If that’s the worst you got in a review for your version 1 product, that’s not a bad review in my book. HP should have made it of metal instead of using plastic and trying to goose its profit margins. Or they should have made it a bit lighter, touted how it was easier to carry around, and lowered the price. It was a misstep that could easily be fixed in the next revision. Which, the way the world was moving in 2011, wouldn’t be long.

Another Gizmodo writer complained that the device seemed too sluggish, but added that the machine needed six months. And then it would either be amazing or, “I guess that says everything that needs to be said.” Oddly prophetic.

And that was the gist of the bad reviews. Basically all the bad reviews complained about performance, while also saying the user interface was intuitive and natural, if unfinished.

The HP Touchpad’s market reception

The market didn’t take the the Touchpad like the critics did. The owner reviews on Amazon from the summer of 2011 were generally fairly positive, and gave some hints of what could have been. Users liked how it sounded, they liked the web browser, they liked that it supported Flash (Apple didn’t), and they complained about the limited number of apps available in the app store and the speed. Though more advanced users added that once you overclocked it, it ran well.

The problem wasn’t that users didn’t like it. The people who bought it seemed to like it, and even more so, they liked the idea of it. The problem was that only 25,000 people in the United States bought one in its first 50 days on the market. In Europe, HP sold 12,000 units in the first 30 days. Australia kept pace, selling 1,200 units in its first three days. With 270,000 units remaining in the retail channel, HP and its retailers had a problem.

On August 16, 2011, Best Buy announced it wouldn’t be paying HP for any further Touchpad inventory. It all came crashing down from there. On August 18, 2011, HP announced it was discontinuing the Touchpad, its phones, and all current and future WebOS-based products, and held a fire sale on the inventory. HP announced it was cutting prices on the tablets to $99 for the 16 GB model and $149 for the 32 GB model, and that cleared the inventory within three days. Most brick and mortar retailers ran out of product the morning after HP announced the price cuts.

What went wrong with the HP Touchpad tablet

The HP Touchpad’s failure all comes down to one thing. HP overplayed its hand. The problem with HP’s tablet endeavor reminds me of what Adam Osborne said when an interviewer asked him in 1985 about AT&T’s failed attempt to release a PC to compete with IBM’s PC.

I’ll paraphrase Osborne because I can’t find the article again, but Osborne said if AT&T had sold a discount PC through its own retail channels, it probably would have caught fire. But instead they released a me-too product at a me-too price, sold it in the same dealers as IBM, and most people bought IBM instead.

I’m paraphrasing, but I distinctly remember Osborne’s me-too product at a me-too price comment. And HP repeated AT&T’s mistake to the letter. The Touchpad looked like an iPad knockoff, and HP tried to sell it in the same stores that sold Apple’s product, at the same price. HP gave consumers no reason to choose the knockoff. The imitator cost the same as the real thing. Including the ability to multitask and a 512MB of extra RAM wasn’t enough to convince consumers that HP had the better product, worth paying full price to get.

What about advertising?

But worse than that, HP didn’t advertise it enough. I don’t remember ever seeing any kind of advertisement for the HP Touchpad tablet, ever. I won’t say HP never advertised it, because I don’t know that they never did. And I watch so little TV, I can miss entire ad campaigns completely. But as little TV as I do watch, I saw Apple ads.

I was HP’s target market, a guy who’d rather mess around with tech gadgets than watch TV. A guy who had a wireless network, a fast Internet connection, and even had at least one HP-branded PC in the house and an HP printer to print to. And I had a reasonably good job in a technology field.

I didn’t want to be the first guy on my street to buy a tablet. But HP needed to try to convince me. HP didn’t try. Apple did. Would HP have succeeded? I don’t know. But HP did try to address the thing I liked least about Apple’s product. I won’t say they had zero chance.

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But let’s address the elephant in the room. HP tried to stake out a claim at the top of the market, right next to Apple. And HP wasn’t the right company to do that.

The good

As an IT professional, I admired HP. I found their servers and printers much easier to work on than the competition. My HP experience went like this: Their stuff was easy to set up and deploy, it worked well, it worked reliably, and in the rare cases when something went wrong, the device had indicators that told me exactly what was wrong and I could fix it in five minutes. And if I didn’t have parts on hand in my stash, I could pick up the phone, read the error code to someone, and the parts would be on their way. No hassle.

It was the most professional experience I’ve ever had with any vendor. I don’t think second place is close. To me, HP was as good as it got. And in a few other niches here and there, people shared that opinion.

The bad

The problem is, the consumer experience with HP didn’t match mine. Consumers associated HP with inkjet printers that acted up a lot and used ink cartridges that cost as much as the printer itself. Or they associated them with unimaginative HP Pavilion PCs that were better than third-tier PCs like Gateway, and better than the printers, but probably didn’t work right either. And they wished they’d bought a Dell instead. They heard those were pretty good.

People who don’t (and didn’t) have a negative connotation of HP generally have a neutral one. Someone will find out I work on computers for a living and they’ll say they have a computer, it works pretty well. Not sure what brand it is, either Dell or HP. Kind of like the brand on your microwave.

And over here there’s Apple. The associate pastor at the church I attended had Apple gear, and all he talked about was how well his computer, phone, and tablet worked together. When he preached a sermon, he mentioned Apple more than he mentioned Jesus.

HP, a company known for $50 printers that barely work, was trying to compete with that. And at the same price. HP had a variant of the Black and Decker problem: a once-proud brand that had become consumerized, and a stigma that went with it that prevented it from moving back upmarket.

What was the right price?

To me it’s clear that HP overpriced its Touchpads. Even if they’d advertised it, the price probably was too high. Even though the market was young, it was clear the market had a leader, that leader was Apple, and it was no longer the same Apple that HP could kick around in the 90s.

There’s a concept in product development called the 80% product. That’s a product that delivers 80% of the functionality of a competitor. These types of products aren’t glamorous, but they tend to be successful, as long as they sell at a discount. People will buy them when they can’t afford the leading product.

It didn’t matter what HP did in the space. Consumers were going to perceive any HP-branded product as an 80% product.

If HP couldn’t rebrand like Black and Decker did to escape the stigma of being the company that sold you your cheap crappy toaster oven so it could sell you $400 power tools, it was going to have to wear the 80% label and do what it could with it.

I think HP needed to do whatever it took to hit a $399 price point for the lower-end unit, assuming $349 or $299 wasn’t possible. I think there was a danger that even $399, which would have been 80% of Apple’s price, would have been too much. A year or so later, there were higher-end Android tablets from companies like Asus that had some success in that price range. If that meant using a 1 GHz CPU and 512MB of RAM and disabling multitasking so it could run better on that grade of hardware, I think that would have been OK. At that point it would be an outright Apple clone without the compatibility, but if they left Flash in, it could do one thing Apple couldn’t. People learn to like 80% products that do one thing the better product won’t.

Buying market share

Something else HP might have considered was selling the product at cost or a slight loss, just to buy its way into the market. It wouldn’t have to be a permanent situation. They could price it very low at the outset, then, as the cost of the hardware dropped, held the price steady. It’s what monopolists do, but it’s also what startups do. HP was neither, but that meant it would have been legal, and a startup mentality was what HP needed to seed the market.

The eventual fate of the HP Touchpad tablet suggests this could have worked. Priced at $99 and $149, HP couldn’t keep the machines in stock. That price was way too low. At, say, $249 and $349, HP probably could have still sold a million units, and solved its app store problem. Developers would have taken notice and started porting apps to it.

HP also could have considered creating a sense of urgency by releasing the product at an introductory price, and announcing that it would raise prices in January, after the Christmas season. Sales would have tailed off after that initial frenzy, but the resulting base of applications probably would have meant sales wouldn’t have slowed to 25,000 units a month. This idea may or may not have worked, but would have been worth exploring and conducting some market research to determine if it had any viability.

Branding

I love HP, but you’ll never convince me the HP name was right for this product. HP had other brand names available with less stigma attached. HP could have used the Palm brand on the HP Touchpad tablet instead. Sure, Palm was best known for something dated, but it wasn’t that far removed from being a cool company.

Compaq was an option. HP didn’t retire the Compaq brand immediately after buying it, but it had fallen into some disuse. Like Palm, the name suggests portability, which would have been a good fit.

They could have even dusted off the 3Com name. HP bought 3Com right around the same time it bought Palm, and by then about all it was was a name. 3Com was a once-proud networking company. Its few forays into the consumer space had done OK. It had owned Palm for a while and co-branded some of those devices. Some of its USRobotics modems were great and some less than great, but those had been co-branded too. Mostly it was something that sounded vaguely familiar, if only because they bought naming rights to Candlestick Park, home of the San Francisco Giants, so people had heard of “3Com Park.”

HP could have released versions under more than one brand, to create the perception of competition. They could have even experimented with pricing under that guise, to see what price points worked.

What ultimately happened to the HP Touchpad tablet

After HP announced it was discontinuing the Touchpad and all other WebOS-based devices, it cut prices to $99 and $149. At that price, the inventory sold out almost immediately. HP cleared out its warehouses and assembled the remaining parts it had into inventory suitable for sale, and demand was high enough that HP was actually able to bundle them with PCs, rather than selling them separately, and cut their losses to some extent. By the time all was said and done, sold over 900,000 units in 2011, more than anyone but Apple. It was the 2011 version of the ill-fated Texas Instruments home computer, which sold millions of units, many of them at a tremendous loss after the manufacturer discontinued it.

The HP Touchpad was an orphan at that point, with no future hardware or software development coming from HP. But as a handheld web browser, it had some utility. And Android developers quickly ported Android to the device, since the hardware was very similar to that used in Android devices. Much of the rush seemed to come from enthusiasts who wanted to load Android on the device.

I don’t think HP Touchpad tablets are quite old enough to be collectible. They’re at an awkward stage right now. They’re obsolete for what they were designed to do, though still somewhat useful for some things. But they aren’t old enough yet to be curiosities, especially without that Apple cachet.

But there are some people fixing them up and reselling them even today. The number of Touchpads in the secondary channel suggests they were high quality devices. Apple outsold them 20 to 1, and yet, almost 10 years later, I can find one easily. Sure, that means few people want them. But I assumed no one wanted one and few had survived. I was wrong about the number that survived.

Why the HP Touchpad tablet failed

In the end, the HP Touchpad tablet failed because HP did everything wrong. Well, except maybe failing to build a quality product. It seems they got the quality right. But the quality outside didn’t match the quality inside. The price was too high. And HP didn’t advertise. And they tried to pass of HP as a high-end brand to an audience that saw it as a low-tier brand.

I don’t think HP had to do everything right. Because I think their goal was to become the #2 in tablets, and get a high margin business to help offset the low-margin business of selling PCs and cheap printers. But they needed to get more right than they did.

The legacy of the HP Touchpad tablet

For a product that flamed out in the marketplace in a mere 50 days, it had an impact. Other companies considering tablets took notice and avoided going head to head with Apple. While there were some higher-end Android tablets that priced themselves within $100 of Apple, there was also a rush to see who could get products on the market as close to $149 and $99 as possible.

WebOS went on to a second career as well. HP licensed the technology to LG, the TV and appliance maker. LG uses it in its smart TVs and smart appliances.

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