What Amazon Can Learn from HP's TouchPad Debacle

HP might have set a record for the shortest-lived tech gadget of all time. The summer was already underway when they introduced their TouchPad and it's already been killed before fall arrived. I was both surprised and disappointed in HP's decision. The poor sell-through BestBuy reported for the device was obviously a clear sign of weak performance overall, but to kill a tablet so quickly is remarkable...especially since the tablet marketplace has such a bright future.

My question isn't "why did they kill it?" but rather "why did they launch it?". The tablet market hasn't changed since the TouchPad launched on July 1st and surely they didn't expect to see it fly off the shelves when it was priced similarly to the iPad but with almost no apps. 

So HP made a huge mistake and lost a good deal of money along the way. I started wondering what Amazon might be able to learn from HP's missteps as we get closer to a possible release of the much-rumored Android Kindle tablet. Here are a few points Amazon ought to keep in mind:

1. Just because you build it doesn't mean they'll come. That only works in Kevin Costner movies about dead baseball players. The iPad's gravitational pull is incredible right now and that had to influence HP as well (although is it any stronger than it was 2 months ago?). I've had an iPad since day one though and I'm ready to ditch mine when Amazon comes out with their tablet...assuming they don't screw up any of the other points below).

2. All the advertising in the world won't guarantee success. For the brief time it was out I couldn't turn on the TV or open a newspaper without seeing a TouchPad ad. It makes you wonder if they would have been better off using all that advertising money to subsidize a lower device price for consumers (see item #4 below).

3. Don't try to invent a new tablet OS and don't over-modify Android. Rumors suggest Amazon will go with Android but I hope they don't get too cute with customization to make it uniquely Amazon/Kindle-ish, locking out general Android apps. Maybe the lesson here is from B&N: Don't force customers to hack the device just so that we can treat it like a full-fledged Android tablet. HP should have ditched webOS and gone with Android as well, IMHO.

4. Pricing is critical and a price advantage to the iPad is important, especially for initial success. HP couldn't sell TouchPads at iPad pricing levels but they immediately sold out when they reduced the low-end price to $99. When I checked with my local Fry's Saturday afternoon I was told the TouchPads sold out shortly after the store opened. Think about it. Yes, $99 was a great deal for the hardware but these people were buying a tablet based on an OS with almost no apps and definitely no future. Amazon is obviously in a much better position to create an ongoing revenue stream, beyond the device purchase, with future content purchases. Here's to hoping Amazon doesn't feel compelled (or arrogant enough) to price at iPad levels.

5. Make sure you've got a wealth of apps available on day one. If indeed Amazon bases their tablet on Android they've already got a strong base of apps. That's another mistake HP made by thinking they could get everyone fired up for webOS. Almost nobody bought the webOS phones so why would they suddenly buy a webOS tablet? My concern here is that Amazon will force customers to only buy apps from the Amazon Android appstore. That would be extremely disappointing and, again, force a lot of customers to hack the device to get the most out of it.

6. Be in it for the long haul. Really? HP gave up that quickly? Heck, even RIM is sticking it out longer with their PlayBook and that device has no decent apps to speak of! Fortunately for us though, Amazon has proven they're in the Kindle platform for the long haul. The original device was ugly and far from a mass market success but they stuck with it and are now the 800-pound gorilla in an extremely important space.

I'm saddened by HP's quick exit from the tablet market. They could always relaunch their hardware efforts around another platform but I imagine they'll need to lick their wounds a bit first. Competition is good though and I was hoping they would have built something to give iOS and Android a run for the money. Now let's just hope Amazon doesn't make any major mistakes like this -- I really want to switch from iOS to Android but I need a reasonably-priced tablet first!

Comments

[Account Deleted]

I am a long time Palm OS user, since 2001 and still using Palm Centro and TX everyday. I'm a fan of Palm OS, and I'm disappointed and a bit angry when Palm abandoned it. So when they launched webOS, Pre, sold to HP, TouchPad, ... I don't care. I don't want to be abandoned anymore.

Now, I am considering iOS or Android to replace Palm OS. Would you tell me Joe, why you want to switch from iOS to Android?

[Joe Wikert]

Absolutely. I've been an iPhone user for 3 years and I love the device. The same goes for the iPad I've owned for about 15 months. But I want more options. I don't want to be locked in with one handset and I don't want Apple to tell me which apps I can download and which ones aren't worthy enough to make their store. Android devices also lend themselves to more customization and hacking. Again, it's about flexibility and choice. For the longest time it seemed that some of my favorite apps weren't available on Android. A good example is MLB's AtBat. Everything I want is now available on Android though, so I figure now is the time to switch. On top of that, I've rediscovered a love of the Kindle device now that I own a third-gen Kindle. I'm anxious to see what Amazon has in mind for their tablet. Since it's rumored to be based on Android it makes even more sense for me to completely shift away from Apple.