Amazon.Co.UK Fumbles HP TouchPad Liquidation
8/29/2011 by: Marcus Pollice
The author of this article has personal stakes in the matter described below.
One week ago, HP opened the floodgates to their fire sale of the TouchPad in Europe. After the weekend where the fire sale started in the US, people already knew that a similar price drop would probably come to Europe as well. The 16GB Touchpad was dropped to $99, the 32GB version to $149 and the 64GB version to $199. Most shops, be it online or retail, were sold out quickly. Some shops didn't reflect the price drop immediately, but that didn't stop people to order the tablet at the full price in the hope they would be refunded later on.
Refunds for everyone, but...
By now HP even officially said that they will refund everyone, who ordered on in their own online shop. When you bought it at a different merchant, you have to wait until HP has granted the merchant the refund who can then pass it on to the customers. This is what most e-tailers and retailers did. There is one prominent example of an e-tailer who wasn't yet able to provide customers with a refund: Amazon UK
Other retailers in the UK followed with HP's reduced pricing of £89 for the 16GB version and £115 for the 32GB version. At the current conversion rates that lines up with the prices offered in Germany (€99 for 16GB, €129 for 32GB). That is a bit more expensive than the prices in the US, but still a steal nonetheless. Oddly, Amazon UK also dropped their prices, but only once their stock had already been almost sold. Most customers, however, ordered at the original price in the hope for a later correction. This was probably also fueled by the price matching policy Amazon used to have but which has since changed to generally not alter prices unless they were wrong.
Legally speaking, Amazon UK can clearly get away with not dropping these prices. According to applicable law, when a customer orders an item (whether this is online or not doesn't matter), he makes an offer to the merchant to purchase the item in question for a certain price. The merchant then either accepts that offer or he can decline it. Once the merchant has accepted the offer, a contract between the two parties has been established. So anyone who has ordered at the full price, has legally accepted to pay the full price for the product.
In the case of Amazon UK, customers who have contacted the merchant about the pricing disparity, they have gotten mixed responses. It can be read up in one of the customer discussions at Amazon.co.uk. Basically the customer service employees have told customers that the matter is still being resolved and it will take 1-2 business days until they can provide further details. Then two days later an apology was sent, that they still can't provide a definite answer to the inquiry and that they will respond in 1-2 more business days. Other customers have been informed that a decision should be available by Tuesday or Wednesday due to a bank holiday on the last Monday in August in the UK. We will keep you posted how this issue develops.
In case Amazon UK decides not to honor the price drop of HP, most customers will probably make use of their right to return the product to get a full refund. Amazon UK offers customers the right to return unopened products for the duration of 30 days for a full refund. Postage for returns has to be covered by customers, but that is a minor loss considering the original retail price. But the issue might damage Amazons public image considerably as people would feel let down over not offering the price reduction, when other merchants clearly did and also refunded customers who ordered it for the full price.
Was it a good idea to drop the price this low?
It is debatable whether it was a smart decision on behalf of HP to reduce the price to such ridiculous levels, that literally everyone wanted to get one of the discontinued tablets. Before when it was priced $400-500 and up, no one was interested in it. To show just how ridiculously cheap the fire sale price was, lets look at estimated bill of materials figures from iSuppli. According to the research firm, the 16GB version weighs in at a BOM of $298, while the 32GB version costs $318. I have been advised that these figures might not be what HP actually pays per unit, due to possible rebates of volume contracts.
But it seems very unlikely that HP gets a rebate in excess of 66%, so they are taking a considerable loss with every unit sold at the fire sale prices. Of course, getting $99 is better than getting zero, but we believe they could have sold them at double the price, still made a loss – although less. This would have saved people a lot of agony of not getting one due to lower demand at the higher price point. This is of course the opinion of the author and flagged as such, as it is based on speculation about what might have happened.
Why bother, the TouchPad is dead anyway?
Well, first of all, at the reduced price, people are satisfied with reduced features. It might not compare favorably to Apple's iPad which can be considered the benchmark of the tablet market at the moment. Still the shipping software allows for most basic usages and there are even some apps available. On top of that there is a hombrew package manager called Preware available where lots of additional software can be found. Chances are that due to the fire sale, one or another customer might also start developing something for the all but dead TouchPad.
Finally a group of developers work on getting Android to work on the tablet. They are basing their efforts on the popular CyanogenMod custom firmware and call their project Touchdroid. It is possible to run multiboot configurations that preserve the original webOS. Ubuntu Linux has also reportedly been able to run on the TouchPad. So the officially dead TouchPad is poised to receive a glorious afterlife by devoted fans.
HP TouchPad, WebOS, HP, Amazon, Amazon.co.uk, Euro, UK, Pound, Pricing, Price Drop, Liquidation
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