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Editorial: HP’s fire sale aftermath, and what other manufacturers can learn from it

HP dropped a double bombshell last week: first they announced that they would be discontinuing their webOS powered devices including the still locally unreleased TouchPad and webOS smartphones, then they announced that they’re looking to exit the PC market altogether. If that wasn’t enough, HP decided to let the TouchPad go with a bang – it drastically slashed the price of the TouchPad – from $499 to just $99 for the 16GB version.

That’s the point where the internet basically creamed itself.

Literally overnight, the demand for the soon to be discontinued tablet exploded. Twitter was awash with people trying to find stores selling the tablet. HP’s retail partner’s servers crashed because of the volume of the people wanting to get a piece of the TouchPad, and a couple of them appeared to be, at the start, wholly unprepared to handle the amount of traffic pouring in.

The question on my mind now is this: why didn’t HP do this earlier?

The other manufacturers may not like it, but ultimately their tablets will be compared to Apple’s offerings. There’s no getting around it. You may spout all the marketing rhetoric you want about why your product is unique and why it’s aimed at a “different” market, but at the end of the day, consumers will always be comparing it a brand, that in their mind, is the gold standard when it comes to tablets.

If HP had done this kind of push for the TouchPad when it launched, it could’ve created a surge of interest for TouchPad, and ultimately, webOS. A limited sale for the TouchPad when it went on sale could have drummed up enough interest and created enough momentum for the devices moving forward.

And it wasn’t like the TouchPad didn’t have anything going for it – it had decent hardware, a solid OS and was priced competitively. Sure it didn’t have the same amount of apps as iOS, Android or even Blackberry, but what it had was a loyal consumer base that’s been around before HP gobbled up Palm.

While a $99 initial sale would have been risky and more likely than not, created a few problems down the road for HP, the pay-off would have been worth it – remember, devices come and go, but OS tend to stick and creating a large userbase early on entices more developers to create apps for your platform, thus create more demand for the next device it’s going on. Android and iOS has been around longer than webOS has, and has a hell of a lot more developers than them. Doing the sale early on would have been more of a Hail Mary play than anything else, but at that point, they needed to do something. Heck, they didn’t even need to cut the price that deep initially – a $150 initial sale could’ve also worked for the company. A couple of million bucks is nothing compared to thousands of users hungry for apps that they can only get on your hardware, using your software. Curiously, that already may have happened now after the firesale, just without HP benefiting from it.

So what are the lessons here that other manufacturers can benefit from? Well, for one, it seems like consumers can be forced to ignore the iPad for the right price. Two, tablet manufacturers that want to make a dent in Apple’s substantial grip on the market need to find a way to undercut the price of Apple’s offerings while at the same time matching or at the very least, coming close to it hardware-wise.

At the end of the day, HP’s fire sale has managed to change the dynamics of the tablet market drastically and manufacturers need to take the lessons that HP learned the hard way to heart. One thing’s for sure – the next couple of months are going to be interesting, to say the least.