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One theory is that they already have the components to build them purchased. They may also have a contract with the factory to build 'X' number of devices, in o
by brk 15y ago
One theory is that they already have the components to build them purchased. They may also have a contract with the factory to build 'X' number of devices, in order to have achieved a discounter labor rate, etc.
So, HP has a sunk cost in components in stock, and an obligation to the factory to build more units (or else pay a penalty).
Is it then cheaper or even slightly more profitable for them to build more tablets rather than try to dispose of the parts and deal with broken contract issues.
(my theory)
- webrakadabra 15y agook you are saying that HP wants to loose less when loosing is inevitable. If I go by this theory, this obligation to components and contract may better be reasonably big. Because small numbers in neither component levels nor contract obligations, won’t make a huge loss. I assume that small numbers in either of the above two factors are negligible relative to the original firesale losses. But If it is a reasonably big number, then I am waiting to buy my touchpad.