Where the TouchPad Went Fatally Wrong

"One would have thought that a company of HP's experience, stature and obvious access to market research would have [been able] to make an informed decision on whether or not to enter the market and how best to compete against already strong and entrenched rivals like Apple, Google, Motorola and Samsung," observed ITIC principal analyst Laura DiDio. "But that didn't happen."

HP's (NYSE: HPQ) TouchPad tablet never sold so well as when HP announced last week that it was ceasing production of the device.

Consumers have cleaned out the market's US$99-per-unit inventory of TouchPads.

At a time when Apple's (Nasdaq: AAPL) selling all the iPads it can mak and manufacturers are launching new Android tablets that are making headway in the market, why did the TouchPad crash and burn?

Many factors play into the answer, falling roughly into four categories: issues with HP's management; a lack of apps; the competition; and patience -- or the lack of it.

HP's Management and the TouchPad

Issues at the top level of HP management may have impacted the TouchPad's future.

First, there was the taint of the firm's previous leadership, said Charles King, principal analyst at Pund-IT.

The TouchPad runs on Palm's webOS, which HP acquired when it purchased Palm under the leadership of then-CEO Mark Hurd, who left under a cloud.

Second, HP's leadership, both C-level executives and its board of directors, seem intent on moving the company away from client products, including tablets, King told TechNewsWorld.

That combination essentially made the TouchPad "the Oliver Twist of tablets -- an unwanted foundling," he remarked.

The HP TouchPad
Further, HP's leadership may be struggling to map out a new strategy in the post-Hurd era.

"I do think that there was a question mark as to what the strategic direction should be, and whether HP is going back to its roots of being a tech-savvy company targeting the enterprise rather than the consumer," Jeff Orr, a senior practice director at ABI Research, told TechNewsWorld.

There's No (TouchPad) App for That
Perhaps the most egregious error HP made with the TouchPad project was not ensuring that there were enough apps for the tablet.

Tablets are essentially consumption devices, and they rely on apps for their appeal.

For example, Apple "was able to rejuvenate what was a very stagnant tablet market to the point that it almost became a new market because of apps and iTunes," Laura DiDio, principal at ITIC, pointed out. "If you want to take on Apple, you must have the apps."

There are more than 90 thousand apps for the iPad, according to Apple's website.

There are reportedly about 300 apps for the TouchPad.

Further, HP didn't make it easy for webOS developers to create apps, Carl Howe, director anywhere consumer research at the Yankee Group, told TechNewsWorld.

Its website for webOS devs is difficult to figure out, Howe said.

Timing - or The Competition, Part 1
Announced in February, the TouchPad hit retail shelves in July, four months after the iPad 2's March launch.

That's equivalent to an eternity.

"This is a very fast-paced market," ITIC's DiDio said. "Apple has built up such incredible momentum and demand for the iPad."

Should HP perhaps have rethought going into the tablet market?

"One would have thought that a company of HP's experience, stature and obvious access to market research would have [been able] to make an informed decision on whether or not to enter the market and how best to compete against already strong and entrenched rivals like Apple, Google (Nasdaq: GOOG), Motorola and Samsung," observed DiDio. "But that didn't happen."

The Competition, Part 2
It's possible that both the TouchPad and HP, with its TouchPad program, were not yet ready for prime time.

"You have to bring as fully featured a product to market as possible; provide solid, well-designed marketing support from Day One; engage related developer communities and get them excited about the product; prepare and engage the market prior to launch; and recognize your competitors' strengths and weaknesses and have answers for them in your product," Pund-IT's King said.

There were complaints about the TouchPad itself, with some users reportedly returning it and demanding refunds.

Further, marketing support for the TouchPad was unproductive at best.

"HP put a lot of money into TV marketing domestically, and what was that message? That entertainers and celebrities can operate a tablet?" ABI's Orr asked. "I don't know if any of that made sense."

Also, there was little market differentiation from the competition, the Yankee Group's Howe pointed out. Users need a reason to select one manufacturer's product over its competitors, and HP failed to make a clear distinction between the TouchPad and other tablets.

A Question of Time
Could the TouchPad have succeeded if HP had gritted its teeth and hung on? It might be possible, but we'll never know.

It takes time to build a market, Richard Shim, a senior analyst at Display Search, told TechNewsWorld.

For example, the iPad wasn't an overnight success. It leveraged many of the time-tested technologies used in the iPhone and built on that device's success, brand recognition and distribution channels, Shim said.

"Generally speaking, U.S. vendors have become entirely too sensitive to immediate market reaction, to the point that any product that isn't an immediate success is assumed to be an outright failure," said Pund-IT's King.

"As a result, products aren't given the time or support that many require to become a success," he added. "Call it IT-style ADD -- Advertising Deficit Disorder. Unfortunately, that's a fatal affliction for many technologies."

There may be life for the TouchPad yet -- open source enthusiasts have launched projects to port Android and Ubuntu to the TouchPad.

At $99 a unit, the TouchPad is an inexpensive platform with which to experiment, Al Hilwa, a program director at IDC, told TechNewsWorld