4 ms·

Why would they start another production run for a discontinued product sold at a loss? Am I missing something or will HP come out next week and say "Surprise! H

Why would they start another production run for a discontinued product sold at a loss? Am I missing something or will HP come out next week and say "Surprise! Here is a great new update for the Touchpad" and start selling them for $200?

hollerith 15y ago
they've probably bought the parts or some such.
- wmf 15y ago
  It's possible that HP could sell the parts alone for over $100. But if they view the parts as a sunk cost (worth $0), it's possible that assembling TouchPads and selling them for $100 is rational.
heydenberk 15y ago
It may be that it's worthwhile to produce and sell them at $100-$150 given the sunk cost of their leftover unassembled bulk componentry.
- heydenberk 15y ago
  This also assumes that their calculation of what's worthwhile includes less tangible stuff, like being seen as a company that is receiving and meeting a high demand for devices and growing in device market share.
- martingordon 15y ago
  If that's the case, just make them and restock the HP web store. Don't come out and say you're doing another run out of charity to not leave their dear customers disappointed.
- yumraj 15y ago
  Actually this is not as far fetched as it may seem. Here's a potential scenario, building on the above, HP may have entered into contracts with manufacturers for 'n' units. When they shut it down, they had only received 'm' units, where m < n. So, they would have had to cancel contracts and pay a penalty. Here, they see a rather unusual demand and must have made some calculation that making the original 'n' units and earning good will by doing that, per the original contracts is better (even at a loss) than breaking contract and paying the penalty at a loss of goodwill.
  - megablast 15y ago
    Did anyone actually think this was far fetched? I thought this guy was being totally serious, and it is the most likely event, actually discussed in the article.

hollerith 15y ago

they've probably bought the parts or some such.

wmf 15y ago
It's possible that HP could sell the parts alone for over $100. But if they view the parts as a sunk cost (worth $0), it's possible that assembling TouchPads and selling them for $100 is rational.

heydenberk 15y ago

It may be that it's worthwhile to produce and sell them at $100-$150 given the sunk cost of their leftover unassembled bulk componentry.

heydenberk 15y ago
This also assumes that their calculation of what's worthwhile includes less tangible stuff, like being seen as a company that is receiving and meeting a high demand for devices and growing in device market share.
martingordon 15y ago
If that's the case, just make them and restock the HP web store. Don't come out and say you're doing another run out of charity to not leave their dear customers disappointed.
yumraj 15y ago
Actually this is not as far fetched as it may seem. Here's a potential scenario, building on the above, HP may have entered into contracts with manufacturers for 'n' units. When they shut it down, they had only received 'm' units, where m < n. So, they would have had to cancel contracts and pay a penalty. Here, they see a rather unusual demand and must have made some calculation that making the original 'n' units and earning good will by doing that, per the original contracts is better (even at a loss) than breaking contract and paying the penalty at a loss of goodwill.
- megablast 15y ago
  Did anyone actually think this was far fetched? I thought this guy was being totally serious, and it is the most likely event, actually discussed in the article.