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  1.    #1  
    1) HP agreed to take back inventory from BestBuy, Staples, OfficeMax etc. All the big box stores and online stores like NewEGG. These vendors were going to get a full credit and be made whole for any cost they accrued related to the marketing and subsequent returning of the HP TP.

    2) When all hell broke loose and the retailers were seeing iPad like interest (lines, calls, etc) the retailers offline and online alike saw a huge opportunity to drive traffic to their sites and or stores. In a depressed economy just getting people to walk through your doors is a feat. So what did the retailers do, they pulled all their "returned" inventory from the distribution centers and returned them to their stores. I am sure BestBuy had to eat that cost of redistributing the TP's which I believe could be very expensive. BB most likely has 1500 plus stores and maybe 30 distribution centers at most. HP was giving the credit for shipping them back not credit for shipping them back and then returning them to their respective stores. The same goes for the other retail chains.

    3) As far as online stores go if you noticed they were the last to drop their prices. Retail dropped fast once the announcement hit, all within 12 hours of the HP press release except for Costco and BJ's (why those two I have no idea). The reason for this is if they sent their product back to HP that was that, they would no longer have the TP. NewEgg, MacMall etc, waited 24 hours to drop their prices (which was a long amount of time with the feeding frenzy taking place at BB etc) which essentially bought them enough time to see how the market reacted.

    4) So there you have two sources of inventory for HP gone due to the overwhelming reaction to the TP firesale. HP most likely counted on those units to be returned thus they allocated say 250k units to be sold directly through their website. With the change of heart by BB and the like that 250k went down to less than 50K if not less.

    5) HP made a mistake. They should not have let retailers continue to sell the HP once they agreed to take them back. It confused they system and reduced the known "returned," inventory to a non-scable number.

    So what is going to happen next. HP will / is getting returned inventory from one off stores that just couldn't be bothered with the chaos or didn't know any better and sent their units back. Thus my 50k at most units theory being returned to HP.

    The only way HP can fulfill the pent up demand and pending orders from their online store is to 1) find a hidden stash of inventory (very unlikely since orders still have not shipped from HP ordered on the 20th) 2) start up the production line and produce more product at a loss. option 2 could happen since there are several HP executives in China right now. I believe that HP maybe negotiating a volume discount to drive the COGS down so they can produce another 200k to 500k units. Why would they do this even if they loose money on each unit sold. If they want to sell or lic WebOS the valuation goes through the roof if you can state there is a installed user base of 2million plus. Every new user increase the value of WebOS. Short term loss for long term gain.

    Now my final thought which could debunk all the above is that HP does indeed have inventory in hand but is sitting on it because you can not buy press like HP has gotten over the past 10 days. No where no how. So maybe they are sitting on the inventory and bilking the opportunity to be in the press. I hope that is the case and everyone who ordered a TP gets one. I do believe at this stage of the game it is not likely. HP is a engineering and computer company. They know where their inventory is and all times. There is no reason that orders from the 20th should be pending unless there is no product to fulfill that order.

    Okay feel free to discuss and here is keeping my fingers crossed more inventory is coming.

    Cheers.
    Last edited by BayAreaTreo; 08/30/2011 at 01:24 PM.
  2. #2  
    Very interesting theory! Only thing i can add is that Best Buy wanted to send them back to HP but received an email around 5:30 MNT on Saturday saying, essentially, "don't send them back, just sell them." Even though Best Buy has such a negative rap around the internet, I can admit that I do work there part time and was delighted to be working that day when the announcement came through.

    Our managers, supervisors, etc. were frustrated to see such a huge loss on our daily numbers but did as they were instructed in that email. My guess is that HP thought it would be a COMPLETE loss and just wanted to recuperate some revenue by selling at firesale prices instead of having the Touchpads be a complete loss.


    Little did they know the frenzy they would spark haha!
  3.    #3  
    Quote Originally Posted by soccerwuedo5 View Post
    Very interesting theory! Only thing i can add is that Best Buy wanted to send them back to HP but received an email around 5:30 MNT on Saturday saying, essentially, "don't send them back, just sell them." Even though Best Buy has such a negative rap around the internet, I can admit that I do work there part time and was delighted to be working that day when the announcement came through.

    Our managers, supervisors, etc. were frustrated to see such a huge loss on our daily numbers but did as they were instructed in that email. My guess is that HP thought it would be a COMPLETE loss and just wanted to recuperate some revenue by selling at firesale prices instead of having the Touchpads be a complete loss.


    Little did they know the frenzy they would spark haha!
    Curious why the BB inventory of TP's was all sent to the distribution centers then. That had to be costly. There was some inventory being held at the store level but less that 25k unit of the 250k units BB owned. It was my understanding trucks and trucks of inventory was being picked up by BB leased trucks and being taken to all 4 corners of the USA so the inventory could be palleted and sent back to HP.

    So did they just hold the store inventory and then distribute the remaining inventory from the 15 or so distribution centers to the stores. Again inventory that was packaged and ready to go back to HP?

    I am just trying to figure out why the inventory was so spotty at BB. How did they decide who would get what and when.

    Again I think BB saw a opportunity to bring folks into the stores so they "dripped," inventory from the distribution centers until all inventory was depleted which I believe the final inventory was depleted Thurs / Friday of last week. Thus no more BB inventory to be had and none of that inventory made it back to HP.
    Last edited by BayAreaTreo; 08/30/2011 at 01:52 PM.
  4. #4  
    I don't know all the logistics. I know that our store had maybe 50 and they were set in a rack unannounced in the front of the store, at which point they were gone in 15 minutes. I had to fight my management tooth and nail to get my hands on one but I am so glad I did!

    Other stores may have been more prompt in their returns to distribution centers but I have no idea.

    I do know that every time I check our inventory system it shows how many items we have in store (very small amount relative to -->) and the amount in the distribution center. Maybe items weren't "shipped back" to the distribution centers but, in fact, never left until the second weekend of fireselling. I know we got another 200 units 4-5 days later (the following Friday, I believe) and other stores got them on Thursday and Saturday. My guess: just the inventory that was there in the warehouses in the first place.
  5. #5  
    That's what I thought, HP assumed all those angry retailers would be thrilled to ship their unsold TPs back where HP could dump them.
    Just shows you as smart as HP thought it was, it underestimated how much people like a bargain in a poor economy.
    Now, lets hope this backfire move actually pays off in giving webOS new life either with a new buyer or HP pulling off the biggest corporate mea culpa since Coke in 1985.
  6.    #6  
    Quote Originally Posted by patchs View Post
    That's what I thought, HP assumed all those angry retailers would be thrilled to ship their unsold TPs back where HP could dump them.
    Just shows you as smart as HP thought it was, it underestimated how much people like a bargain in a poor economy.
    Now, lets hope this backfire move actually pays off in giving webOS new life either with a new buyer or HP pulling off the biggest corporate mea culpa since Coke in 1985.
    I agree. I believe HP has a team of folks in China right now working on reducing the Cost of goods sold (COGS). HP should bite the bullet and produce another 500k units which would cost them $150million then take out the measly revenue they would get for them and their total cost would be $100million to produce the 500k units (assuming they are all 16GB for easy math). $100million, really that is so cheap for the amount of advertising they are and will get. My gosh the community good will they would get would be huge.

    I believe that is what is happening thus the three week window of waiting, that sounds about right for production of 500k or so units.

    Okay who is with me on this theory.
  7. #7  
    I know I bought this thing for Android port but I am rooting for webOS now! Preware is so buttery smooth to implement (versus rooting my Android phone which was like chewing on nails for 6 hours) and the actual UI design is beautiful! I would much rather see developers take off in the HP App Catalog than see a successful Gingerbread port.
  8. #8  
    Quote Originally Posted by BayAreaTreo View Post
    I agree. I believe HP has a team of folks in China right now working on reducing the Cost of goods sold (COGS). HP should bite the bullet and produce another 500k units which would cost them $150million then take out the measly revenue they would get for them and their total cost would be $100million to produce the 500k units (assuming they are all 16GB for easy math). $100million, really that is so cheap for the amount of advertising they are and will get. My gosh the community good will they would get would be huge.

    I believe that is what is happening thus the three week window of waiting, that sounds about right for production of 500k or so units.

    Okay who is with me on this theory.
    That sounds like a lot of units. While it's possible/likely that HP is covering themselves by saying they might not have enough for everyone, I think that 500k would largely cover the main demand. This statement leads me to believe that it may end being a much, much smaller number.

    I could be completely off, though. I hope I am.
  9. #9  
    HP selling their Touchpads at a loss isn't really a loss, its an investment in a user base. Where they make their money should be in applications, either as a 30% rev share or by developing on their own much like they did the FB app, and then in upselling other devices - Pre 3's, the 7 inch tablet & computers.

    How cool would it be to be able to sync seamlessly with an HP lap top, tablet and phone?
  10. #10  
    Quote Originally Posted by BayAreaTreo View Post
    I agree. I believe HP has a team of folks in China right now working on reducing the Cost of goods sold (COGS). HP should bite the bullet and produce another 500k units which would cost them $150million then take out the measly revenue they would get for them and their total cost would be $100million to produce the 500k units (assuming they are all 16GB for easy math). $100million, really that is so cheap for the amount of advertising they are and will get. My gosh the community good will they would get would be huge.

    I believe that is what is happening thus the three week window of waiting, that sounds about right for production of 500k or so units.

    Okay who is with me on this theory.
    Until those TPs that somehow mysteriously cost only $200 to make starts breaking and HP have to do a lot of warranty, and that goes on the news.
    Last edited by b534202; 08/30/2011 at 02:55 PM.
  11.    #11  
    Quote Originally Posted by b534202 View Post
    Until those TP that somehow mysteriously costs only $200 to make starts breaking and HP have to do a lot of warranty, and that goes on the news.
    My theory is they cost $300 to make and they will be the same build quality (good or bad) of the current models. It would cost more to change suppliers and quality at this time.

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