HP Making Final Batch of TouchPads to Meet Surge in Demand

Hewlett-Packard Co. (HPQ) will produce a final run of its TouchPad tablet computer, after price cuts generated a surge in demand for the discontinued product.

“Since we announced the price drop, the number of inquiries about the product and the speed at which it disappeared from inventory has been stunning,” Mark Budgell, a spokesman for the Palo Alto, California-based company, said in a blog post this week. “A limited supply are coming and it will be a few weeks before they are available.”

After announcing plans to stop making WebOS products, including the TouchPad and a line of smartphones, Hewlett- Packard cut the tablet’s price to $99, down from $499 originally. That made the devices a fifth the cost of Apple Inc. (AAPL)’s market-leading iPad and sent shoppers clamoring to find them in stores. Hewlett-Packard’s final batch of TouchPads will be available in the fiscal fourth quarter, which ends Oct. 31.

The company hasn’t changed its plan to discontinue devices running WebOS, part of a shakeup that includes a possible spinoff of its personal-computer division. Hewlett-Packard gained the WebOS software in last year’s $1.2 billion purchase of Palm Inc.

‘Sample Ad’

Separately, the company posted a “sample ad” on its blog promoting the idea of an independent Hewlett-Packard PC business. Under the tagline “The spirit of a startup. The security of HP,” the ad calls the PC division a “$40 billion company.” Hewlett-Packard’s personal systems group, which includes PCs, reported revenue of $40.7 billion in fiscal 2010.

“Our preferred course is to spin off our PC business into a separate company, creating a more agile organization to help us better anticipate change and quickly respond to customers,” Hewlett-Packard said in the ad.

As for WebOS, the company is considering partnerships and licensing deals with manufacturers that may use the software in their devices, Hewlett-Packard Senior Vice President Stephen DeWitt said earlier this month. A sale of that business also is possible, DeWitt said at the time.

Logical buyers for WebOS may include Samsung Electronics Co., Research In Motion Ltd., HTC Corp., Amazon.com Inc., Facebook Inc., Sony Corp. and Microsoft Corp., said Shaw Wu, an analyst at Sterne Agee & Leach Inc. in San Francisco. They could use it to build a platform that competes with Google Inc.’s Android and Apple’s iOS, he said.

“Having a larger installed base of TouchPad and WebOS devices should increase the value of WebOS in a potential sale,” Wu said today in research report.

WebOS has an appeal beyond consumer markets, and may be alluring to companies in finance, transportation and retailing, DeWitt said. Hewlett-Packard has struggled to get software developers to build applications that would complement WebOS.

To contact the reporter on this story: Nick Turner in San Francisco at nturner7@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.