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Newsletter Issue #612: Apple’s Competitors Take Another Fall

After paying $1.2 billion to rescue Palm, a failing smartphone maker, you’d think HP had a long-term plan to make the deal profitable. Although Palm had come into hard times in recent years, the fledgling WebOS had been regarded as one of the strongest competitors to Apple’s iOS. Indeed, the chief executive at Palm, John Rubinstein, was an Apple alumnus.

HP’s latest foray into the tablet space, the TouchPad, debuted at the same price as the iPad 2. But with middling reviews and tepid customer response, HP panicked. In the space of one week, there were price cuts and rebates, ultimately resulting in a $100 price reduction. At the same time, there were complaints from Best Buy, the large consumer electronics retail chain, that they had been stuck with lots of unsold inventory. Customers weren’t interested in the TouchPad.

Just this weekend, I saw that silly and pointless TouchPad ad once again before hitting Fast Forward, but the ax had already fallen. HP will ditch WebOS, although I suppose it’s always possible someone out there might want to buy the remnants of Palm and see if they could do any better. Existing TouchPads are being unloaded as fast as possible, with reports you can get one for less than $100 if you care.

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