How did HP burn $900 Million on Touchpad?

Did you know that HP Touchpad is claimed to be the fastest hardware failures?, as the product was put on a fire sale in just 49 days after its launch!

The HP TouchPad was developed by Hewlett-Packard (HP) after its acquisition of Palm, Inc. in 2010, the goal of this acquisition was to ressurect HP's presence in the mobile device market.
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Launched in July 2011, the TouchPad was designed as a competitor to Apple’s iPad, featuring a webOS operating system that aimed to provide seamless integration with other HP devices and a user-friendly experience.
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The TouchPad hit the market on July 1, 2011, positioned as a high-quality tablet that could handle multitasking and offer a unique user interface through cards and notifications.

Initial Market Reaction:

• Many analysts noted that despite its solid hardware, the TouchPad’s software limitations were a significant drawback. The lack of third-party applications compared to iOS and Android platforms led to concerns about its long-term viability.
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• Upon launch, the TouchPad generated considerable excitement due to HP’s strong brand reputation and the innovative features promised by webOS.
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• Reviews were mixed; while some praised the multitasking capabilities and interface design, others criticised the limited app ecosystem and performance compared to competitors like the iPad.

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Key Financial Indicators

• Launch Sales Figures: The TouchPad sold approximately 500,000 units in its first few months, which was below HP’s expectations for market penetration.
• Fire Sale: Immediately After disappointing sales, HP reduced the price of the TouchPad through a fire sale and started selling @$99 only in August 2011, leading to a spike in demand and sales of around 25,000 units per day.

Missed Opportunity:

Many Believe that HP touchpad had actually lost the battle to Ipad even before it began.
When HP launched touchpad, they had a large press event just like Apple launch but without any usual incentives associated with such an event.
​But to the massive disappointment of the huge crowd that gathered in San Francisco for the event, HP announced postponement of the product release date and the hidden pricing which was earlier not conveyed to the press.

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These two factors were the guiding mistakes in the very bad presentation of the TouchPad and HP somehow missed the buzz created in tech enthusiasts over the launch of this alleged Ipad competitor.

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5 Lessons for Tech startups to Learn from HP's $900 Million Mistake

1. Software Ecosystem: The success of hardware products often hinges on a robust software ecosystem. The TouchPad suffered from a lack of available applications, which diminished its appeal compared to competitors.
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2. Market Research: Understanding market needs and consumer preferences is crucial. HP underestimated the importance of app availability and ecosystem readiness.
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3. Agility: Startups should be prepared to pivot based on market feedback. HP’s decision to discontinue the TouchPad was too late to salvage the brand’s reputation in the tablet market.
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4. Product Positioning: Effective marketing is essential for product positioning. HP’s marketing efforts did not sufficiently differentiate the TouchPad from competitors, hence failed in setting any clear Product Value differentiator.
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5. Leadership and Vision: Leadership and a clear vision are vital for navigating product development and market entry. The lack of a unified strategy post-acquisition hindered HP’s ability to leverage Palm’s strengths.