HP TouchPad: A Necessary Risk, Uncertain Reward - Forbes (blog)

By Sarah Rotman Epps

Today HP launches the HP TouchPad, the first tablet based on HP’s new operating system, webOS, which it acquired along with Palm exactly one year ago. HP’s $1.2B initial investment in Palm, plus its additional investment over the past year to bring the TouchPad and its webOS smartphones to market, is a risky investment–there’s no guarantee that consumers will buy these products, or that the consumer electronics market has room for another software platform. But the webOS investment is a risk HP had to take, in order to:

Compete with Apple. Apple owns its own hardware and its own operating system, which means it controls the experience to a greater degree than OEMs that make hardware for Apple or Google’s software. With webOS, HP gets more control over the total product experience.Differentiate itself from other OEMs making Android and Windows devices. HP wants to be more than a company that makes gray boxes running Windows. webOS helps HP differentiate from the pack but it’s also an unknown to most consumers, and adoption is uncertain.Hedge against PC cannibalization. In a recent Forrester report, we found that PC cannibalization from tablets has been modest so far but is likely to increase in the next 6 to 12 months. HP is the biggest PC manufacturer in the world, and it needs to adapt its product portfolio to avoid more disappointing quarters like this most recent one.

The TouchPad is a good product. The hardware is solid–HP didn’t skimp on the screen quality and the device feels solid and well-balanced to hold, similar to the first-generation iPad. The webOS software is more polished than Honeycomb and overall the TouchPad is a better product than any Android tablet on the market. With 300 TouchPad apps at launch, HP won’t win the app numbers wars, but I like HP’s approach of focusing on quality rather than quantity–it’s easier to find quality apps on the TouchPad than it is on an Android tablet or the BlackBerry PlayBook, which had 3,000 apps at launch. And the Pivot “magazine” that highlights featured apps in the HP’s App Catalog is a nice touch. But it’s unclear how many consumers will opt for this first-gen HP tablet. In an online survey of 4,564 US consumers Forrester conducted in May and June 2011, we found that beyond the iPad, consumers’ preferences for which tablet to buy are extremely fragmented, and HP doesn’t stand out from the pack with only 7% of consumers considering buying a tablet saying they’d consider buying a TouchPad:

There are some big unknowns that will impact whether HP’s webOS bet will pay off or not. First, we’ve yet to see HP’s marketing and channel execution for the TouchPad. Second, we don’t yet know the extent of webOS licensing to other OEMs–if reports of OEMs like Samsung licensing webOS are true, that could substantially increase the install base of the platform and its appeal to app developers. Third, we haven’t seen Windows 8 tablets hit the market yet, which may leave the TouchPad in the dust.

The bottom line: In 2011, the TouchPad has a shot to be the No. 2 tablet for consumers, far behind the iPad but ahead of RIM and Android competitors. In 2012, the game changes with Windows 8. If webOS survives the platform wars beyond that, HP will have an important asset to differentiate itself from other OEMs and to compete in the post-PC era.

Sarah Rotman Epps is a senior analyst at Forrester Research, serving consumer product strategy professionals. Follow her on twitter @srepps.

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Confusion Reigns Over TouchPad Pre-Orders From HP, Partners - CRN

As HP gears up to release its WebOS TouchPad tablet on July 1, prospective customers are finding it difficult to get clear information on how to pre-order the device.

Many of HP's online retail partners still aren't taking pre-orders for the TouchPad tablet, even though HP is directing prospective TouchPad customers to their Web sites. And HP itself seems to have a different definition of pre-ordering than the one which suggests customers can reserve a product prior to its launch.

On Tuesday, CRN contacted the customer service departments of several online retail partners that HP links to on its official TouchPad Web site to determine whether they're taking pre-orders. A Radio Shack customer service representative said the company isn't accepting pre-orders online or over the phone, and an Officemax representative professed to having "no idea" when the TouchPad would be available for online or phone pre-ordering.

A customer service representative from Hilliard, Ohio-based Micro Center was unsure if the online retail firm is taking TouchPad tablet pre-orders online or by phone. Newegg is taking pre-orders through Newegg.com but not through Neweggbusiness.com, according to a customer service representative from that company.

HP is allowing business customers to pre-order TouchPads online through its Web site, but the company isn't extending this option to consumers. In fact, consumers can't reserve a TouchPad at this point in time -- all they can do is call HP and ask to be contacted when HP releases the TouchPad tablet, according to an HP customer service representative. This despite the fact that HP's Web site includes a large, prominently displayed blue button inviting customers to 'Reserve Now From HP'.

Prospective TouchPad customers are also reportedly encountering confusion when trying to pre-order TouchPads at Best Buy stores. On the Palm enthusiast forum Treo Central, many posters are complaining of store staff being unfamiliar with the TouchPad and unable to provide accurate information about the WebOS tablet.

"I have had no luck at 3 different local Best Buys trying to preorder this thing! They all have no idea what I am talking about at first, then come back and say 'you can preorder it online'," one Treo Central poster wrote Sunday. Best Buy is allowing customers to pre-order through its Web site.

HP couldn't be reached for comment on why some of its online retail partners aren't taking TouchPad pre-orders, why consumers can't reserve TouchPads directly from HP, and whether it's offering sales training to Best Buy and other retail partners' in-store employees.

The TouchPad, HP's first WebOS tablet, is a critically important product release for HP that will be closely watched in the mobile industry. So the appearance of HP and its partners being out of synch on the TouchPad launch is a troublesome sign for a company that often touts its marketing and distribution capabilities as a competitive advantage.

HP trails Apple's iPad and the Android tablet army by a wide margin, but its view is that WebOS is more conducive to getting work done than the tablet operating systems currently on the market. HP has also been playing up its ability to weave security and management into the TouchPad so as to appease enterprise IT. In HP's view, it's still early days in tablets and it still has time to catch up.

Of course, the market has yet to render its verdict on whether the TouchPad can challenge the iPad. And HP also needs to convince partners and developers that WebOS is a platform that's worthy of their time and investment. But HP will at least have to execute on basic functions like pre-ordering if it's going to have any chance of putting a dent in the sizable lead its tablet competitors have already carved out.

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