Commentary
8/17/2011
10:45 AM
Eric Zeman
Eric Zeman
Commentary

Best Buy To HP: Take Your TouchPads Back

Best Buy has received 270,000 TouchPads from HP but has only sold 25,000 of them, report says.



HP TouchPad: A Visual Tour
HP TouchPad: A Visual Tour
(click image for larger view and forslideshow)
Best Buy is not happy with the HP TouchPad's sales performance--or, more accurately, the lack thereof. An internal sales report cited by AllThingsD says that the company has sold less than 10% of its stockpile of 270,000 TouchPads. A second source confirmed the numbers, and even suggested that the sales figures might be too high because they don't account for returns.

Best Buy wants HP to take the unsold TouchPads back.

The big box retailer is apparently so unhappy with the TouchPad's sales figures that it won't pay for them, and wants them out of its inventory system, where they are taking up space and costing the retailer money, according to AllThingsD's report. Worse, HP is begging Best Buy to be patient and hold onto them. HP may even send VP Todd Bradley to Best Buy's headquarters in Minneapolis to talk with the retailer's execs directly about the situation.

The sales problems persist even in the light of a number of price drops for the TouchPad.

HP recently dropped the price of the TouchPad by $100 to $399 and $499 for the 16-GB and 32-GB models, respectively. The price drops were initially supposed to be a temporary discount, but HP has decided to extend the discounts indefinitely. In other words, HP has permanently cut the TouchPad's price by $100 a mere five weeks after launch. Obviously, this move was meant to coax the public into buying its tablet. But they aren't.

Best Buy isn't the only retailer having trouble selling the TouchPad. According to spot checks performed by Envisioneering analyst Rich Doherty, Wal-Mart, Microcenter, and Fry’s aren't selling TouchPads, either. The reason? Believe it or not, all the price changes.

"After the initial surge of interest after the July release, all those price promotions have caused consumers interested in buying a TouchPad to pause because they think the price is going to fall further," Doherty told AllThingsD. In other words, the sales tricks have backfired.

Why isn't the TouchPad selling? Few tablets appear to entice consumers as much as the Apple iPad does. According to a recent survey conducted by Robert W. Baird, 94.5% of more than 1,100 potential tablet purchasers indicated the iPad was their top choice in tablets. The TouchPad managed to come in second with 10.3% of the people surveyed indicating interest.

HP is due to report quarterly earnings Wednesday. It is possible the company will share TouchPad sales figures, but there's plenty of reason for HP to keep those numbers close to the chest for the time being. Even if it does report initial sales, the figures will reflect a very small slice of time and represent channel sales rather than sell through.

Neither HP nor Best Buy commented on AllThingsD's report.

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