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NEW YORK — Tabula rasa? No blank slate for publishers — at least not from HP.
The computer giant surprised the publishing world — and many others — a few weeks ago when it said it would discontinue its iPad-fighter, the TouchPad, and scuttle its webOS business. The tablet craze, which seemed to ignite consumers and hardware makers alike, seemed like a reasonable bet for HP, with a historically strong presence among budget-conscious PC buyers eager for a modest price point. Publishers were excited by the entry of new devices and platforms like the TouchPad, hoping for more media-bottom-line-friendly business models than the ubiquitous Apple accessory and its Cupertino, Calif., overlords.
But the result was a lackluster product almost as expensive as the iPad, and the only thing the TouchPad was able to ignite was a fire sale. The tablet’s price was slashed to $99 from $499, causing consumers to rush to buy one at such a cheap price (and for those who already have an iPad, the TouchPad can double as a serving tray).
While HP’s decision was surprising since the TouchPad’s lifespan was barely that of a few months, it wasn’t a total shock. Best Buy reportedly sold just 25,000 TouchPads from an order of 270,000 nationwide. Wal-Mart had already tried to return its large inventory of unsold tablets to HP. Not much of an iPad killer.
“About a year ago, we made a bet on webOS,” Hewlett-Packard Co. chief financial officer Catherine Lesjak offered in the postmortem on Aug. 18. She had clearly come to bury the TouchPad, not to praise it. “At that time, we set clear metrics and milestones to measure success. The sell-through of the TouchPad was not what we expected. Our expectation was to establish TouchPad as the clear number-two platform in tablets.”
That didn’t happen, partially because there was so much competition out there already. But the failure of the TouchPad probably won’t discourage other entrants.
So far, category leader Apple has sold about 28 million iPads. According to Forrester Research, Samsung said in January that it had sold 2 million Galaxy tablets since launch in September 2010. Motorola, which was recently purchased by Google, has shipped 690,000 Xooms since its February launch. The potential market is so large that it won’t be long before other manufacturers hear the tablet’s siren call.
Sarah Rotman, a senior analyst at Forrester, said a new competitor will emerge to give Apple a run for its money. “HP had a shot at some part of the market, but now that will be filled with alternative tablets that are expected to come out,” she said. “Amazon is expected to come out with something. Our data show there is demand among consumers for a tablet that’s not the iPad. But so far, there are no good alternatives.”
Yet one more thing Amazon can sell consumers. But what does that mean for media? Book-selling giant Amazon makes tablets, saves publishers from music-industry slayer Apple. Happy ending for all? Not so much.
Rotman argued that the bad news for publishers is that Amazon will not necessarily be a better friend to them than Apple, which takes a big cut of sales and doesn’t share user information. After all, Amazon isn’t exactly warm and cuddly when it comes to getting newspapers and magazine titles onto the Kindle. “Their [Amazon’s] rules are pretty much the same as Apple’s, which is a little discouraging for publishers when you think about what will happen in the tablet market,” said Rotman.