The HP TouchPad may be selling like hotcakes now that the company has cut the price of the webOS-based tablet by 75 percent or more, but the damage has already been done. The device, which launched on July 1, didn"t sell many units so HP pulled the plug on further TouchPad production last Thursday. Now AllThingsD.com is trying to come up with some estimates on what HP will end up losing in this failed attempt to compete with Apple"s iPad tablet.
According to some reports, HP ordered between 500,000 and 1 million units of the TouchPad for its first, and likely only order from its Taiwan-based contractor. According to a tear down of a TouchPad from the research firm iSuppli, the 16 GB version cost $306.65 to build while the 32 GB version cost $328.65. Assuming that HP got the full 1 million unit orders for the TouchPad it likely cost something around $317.7 million to build all of them. The article also makes an assumption that HP has only sold about 50,000 of those unit orders in stores at the initial higher price (sales of the TouchPad could actually have be much lower) which means that HP is stuck with $297.7 million in non-sold TouchPad units.
That"s just pure hardware costs. The number doesn"t take into account other charges, including the huge marketing and promotion campaign for the TouchPad that included three TV spots with celebs like Lea Michelle and Russell Brand pushing the TouchPad in ads that ran nearly non-stop for the past few weeks, even after HP pulled the plug on the device.