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HP Nixes the TouchPad: Why it Actually Makes Sense

SUREN on September 01, 2011

HP made big news for all the wrong reasons last week when it announced the demise of its TouchPad, a credible competitor to the iPad aside from Android-based tablets.

Apart from the abruptness and timing of the announcement, I have little to disagree with the decision itself. For all the people who feel HP made a poor choice, I say look at the numbers. In fact, I would hold HP management accountable for not picking up on this earlier than they actually did.

As early as Dec 2010, Marco Arment, founder of InstaPaper, wrote an ironical commentary on his blog, aptly titled, "There really isn't much of a "tablet" market."

There’s an iPad market, and the iPad could be classified as a tablet, from a hardware-centric viewpoint. But the market for non-iPad tablets is about as big today as it was before the iPad, which isn’t nothing, but it’s close enough to nothing that Apple doesn’t need to worry about it.

It would have been just another funny post by an Apple fanboy had it not been eerily prescient in predicting what was to come.

Much has been written about why HP should have given enough time for the TouchPad to gain traction in the market. But you have to credit HP's leadership for taking a hard-nosed look at the numbers, and making a tough choice.

1. In a report published by Robert W. Baird, a wealth management and analyst company, 95% of people who own or are considering purchasing a tablet want the iPad.

2. A report from Nielsen shows that the iPad owns 82% of the tablet market in the US. I say "owns" and not "has captured" only because it shows no signs of frittering away its dominance.

3. Apple has sold roughly 29 million iPads since launch, while Android-based tablets are estimated at about 1.5 million. The HP TouchPad, 49 days after launch, had sold about 25,000 units, prompting AllThingsD to  label HP's non-starter the "OuchPad".

Even if you ignore the survey results, sales numbers don't lie. The writing, they say, was clearly on the wall. In light of the above, some comments from the punditry on the iPad is worth revisiting (thanks to  APPLInvestors for the iPad Death Watch.)

“Apple iPad - failure, joke or fiasco? Pick one”
Linen DeFiller, MillionFace.com, 27 January 2010

 

“The tablet market has only succeeded as a niche market over the years and it was hoped Apple would dream up some new paradigm to change all that. From what I’ve seen and heard, this won’t be it.”
John C. Dvorak, MarketWatch, 29 January 2010

 

“It’s a nice reader, but there’s nothing on the iPad I look at and say, ‘Oh, I wish Microsoft had done it.’”
Bill Gates, Microsoft, 10 February 2010

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