How HP And webOS Could Have Won

We’ve now seen what will create an iPhone/iPad-like frenzy of buying: A iPad-like tablet for $99-$149 from a name-brand.

What will go down as an even bigger mistake in tech history annals than the killing of the TouchPad is HP’s failing to capitalize on the idea of what just happened.

From HP to Amazon, the Tablet Dilemma: Go Big or Go Home

How Much Did HP Lose on the TouchPad? Here’s a Good Guess.

Those two articles validate what I’m about to propose, but it’s just too late for HP to do anything about it now — short of the Board of Directors throwing Apotheker out the door and unanimously and publicly repudiating his decision of last week.

Everyone is fond of saying Apple didn’t create a tablet market, it created an iPad market.

HP should have tried to create a TouchPad market.

Back in the 1970s, I read a lot of books from people who had worked in advertising and they recounted a lot of the thinking that went into their campaigns. Sometimes they started with just an idea and then convinced a company to use it!

Look at how that worked:

In the 1950s, marketing whiz Stanley Arnold was working at Young & Rubicam, where he was asked to come up with a marketing campaign for Remington Rand. The company was among the most conservative in America. Its chairman at the time was retired General Douglas MacArthur. Intimidated at first by a company that was so much a part of America, Arnold also found in that phrase the first inspiration for a campaign. After thinking about it, he went to the New York offices of Merrill Lynch, Pierce, Fenner and Beane, and placed the ultimate odd-lot order:

“I want to purchase,” he told the broker, “one share of every single stock listed on the New York Stock Exchange.” After a vice president tried to talk him out of it, the order was finally placed. It came to more than $42,000 for one share in each of the 1098 companies listed on the Big Board at the time. Arnold now took his diversified portfolio into a meeting of Remington Rand’s board of directors, where he argued passionately for a sweepstakes campaign with the top prize called A Share in America. The conservative old gentlemen shifted around in their seats and discussed the idea for a while. “But Mr. Arnold,” said one, “we are not in the securities business.” Said another, “We are in the shaver business.”

“I agree that you are not in the securities business,” said Arnold, “but I think you also ought to realize that you are not in the shaver business either. You are in the people business.” The company bought the idea.

The problem with recounting a story like that today is that the financial scale is difficult for many to comprehend in these days of inflated tech values (Tumblr is worth $800M?).

That was a huge, huge contest prize. An epic prize.

I bring up this story because it illustrates the kind of Big Thinking that advertising once engaged in before it became as corporate as its clients.

HP should have engaged in some Big Thinking.

When HP said it was going to “double down” on webOS, they should have followed through with that thinking all the way.

Problem One: The HP TouchPad is not selling, even at $299 (the weekend Staples sale with $100 off + $100 coupon).

Problem Two: Devs will not be attracted to the platform unless many people have it.

Question: What would make it sell and create a market?

Too late, HP found out that they really did have to double down.

Let’s say HP was manically optimistic and actually did run off one million HP TouchPads. Of which only 30,000 sold.

That “one million” is a magical number, like ninety-nine cents, like nine dollars and ninety-nine cents (a Kindle book), like ninety-nine dollars.

HP really could have used 1950s and 1960s advertising thinking here. That “one million” was their double-down opportunity. They knew the alternative was what they’ve just done: discontinue all of it, eat the lost money, and flush away its future.

Faced with that, they should have been thinking, If we’re going to have to eat this lost money anyway, what can we try to do to save the entire plan?

They could have used a modern-day Jerry Della Femina here. I think what he would have told him is this:

Blow it out for $99/$149 (as they have done), but rip up all the current advertising. Pull the TV spots and the print ads, and this is the new campaign:

The HP TouchPad Million User March

We thought you would like our new HP TouchPad.

We were wrong.

You’re not buying it.

But we think it’s a great tablet.

And the only way for you to find this out is for you to own one.

So we’re cutting the price.

The first one million buyers will get it for $99 for 16GBs and $149 for 32GBs.

We think you’ll love it.

We think you’ll tell your friends.

And we think with one million of you marching, we’ll have more software made for it very soon.

Thank you for your support.

*This offer is limited to the first one million people and is limited to one to a customer.

Tell me that wouldn’t have had people lined-up in an iPhone/iPad-like frenzy to buy it!

Tell me what developer is going to ignore one million HP TouchPads out there!

Tell me that wouldn’t have paved the way for the success of the lower-priced HP TouchPad Go and possibly even made people curious about getting a Pre 3 for Touch To Share!

HP could have scared the shit out of everyone with a bold move like that.

Doubling-down would have established webOS as a third platform immediately, waking up devs, spreading the word to everyone.

HP could have also been very clever and stopped production after one million and retooled for an HP TouchPad 2. People wouldn’t have felt cheated paying a higher price for a different but improved version of it. There would have been one million people out there telling people it was still worth the new price!

Instead of epic FAIL, HP could have had an epic WIN.

But Apotheker isn’t that kind of person.

And now we’re here.

(Thanks to @ProfJonathan for his assistance in digging up the advertising story.)

9 Comments

Filed under webOS

9 responses to “How HP And webOS Could Have Won

  1. Pingback: How HP And webOS Could Have Won | WebOS | Scoop.it

  2. Thanks for the link, Mike. (I wrote the Wired “Go Big or Go Home” story up top.)

    I think HP would have scared the shit out of everyone with a move like that — but they would have scared the shit out of themselves and their shareholders more.

    Apotheker & the immediate team around him definitely weren’t the right people to execute a webOS strategy. But there were structural reasons, too.

    If you’re giving a product away at a loss, you need a robust strategy for making it back on the back end. Apple, Amazon, & Barnes & Noble all have lots of ways to make money and increase engagement after the sale with media and app sales. In its printer business, HP has a fantastic way to make money and increase lock-in after the sale with toner. HP didn’t have it with its webOS devices.

    Even if they’d tried to build up the app store after the fact, it’d be a huge gamble. Android has a huge developer community, but Google doesn’t make its money on app sales. And people who rush to buy a tablet for $99 aren’t usually the kind of people who will blow that much again on apps for their cheapo tablet, especially when the web is free.

    Maybe it would/could have made more sense to do something targeted for the enterprise market along those lines. And I still think they could do stuff with printers or appliances or cars — anywhere but smartphones and tablets.

    • mikecane

      It’s a big bet. But so was buying webOS. We’ll never know now. Great piece at Wired!

      Edited to add: Another component would have been Long Accounting. Keeping track of those one million in an accounting sense to see if they ever paid off. Not sure how the tax laws or SEC could let that happen.

  3. Shock Me

    Pity Amazon seems committed to Android. They could really make use of webOS to differentiate their offering and have the content library and sales savvy to back it up.

  4. WebOS+InnnovatedPrinterTech

    If they really wanted a strategy to beat Jobs&Co HP would have taken their strengths and built a integrated hub of products (which is what Steve did when he came back to Apple.) HP strength is printers. So the printer and the tablet should be cross linked. All tablets should easily find and print to a HP printer. Conversely all tablets should look like a simple to connect printer from other products including the printer/scanners. You should be able to send documents to the tablet like a printer even documents/files scanned on the printers. Then you need to expand/innovate the printer business. Why is HP not the leader in 3D printing. Cheap 3D printing metal/plastic parts for quick prototypes is an obvious extension to inkjet printer technology. Of course the tablets would have to support CAD, and each 3D printer would use a small WebOS touch screen as its interface. Why not real printed circuit boards. This is just inkjet printing with some metal and plastic inks. Again software support for it on all other HP products and small WebOS touch screens would of course be the proper interface to run these sort of complex printers. In fact WebOS tablets would be a better/separate hub/controller to all HP complex machine “printers.” They would need basic apps to support CAD and circuit design, but if the proper “printing” support is built in to these tablets, third party software would be able to fill in many of the gaps. Every small hardware engineering shop would jump to HP to have these integrated prototype products that are cheap, even if the ink is more expensive! It would be like the print revelation that the Mac started, but for 3D printing and circuit boards, using HP computers/software/”printers”/tablets. Apple and others could even license “drivers” for these new types of “printers” or simply not play in that market. Like with the PC people would have to choose between the work tablet and the home tablet. Most choose their PC to be compatible with work.

  5. It’s called sunk costs. :)

  6. Jmd

    Only problem with this is that the TouchPad isn’t very good. Read the initial reviews of both webOs phones and tablets. They panned the hardware AND the software. Webos failed as a phone OS and failed again as a tablet OS.

    People are willing to pay nearly 5 times as much for iPad and in vastly greater quantities than a TouchPad, even at $99, because it’s that much better.

    And as for this rose colored view of webos check out the gizmodo, Josh topololsky, walt mossberg reviews and others. The software sucked as well, it wasn’t just the hardware. See http://www.marco.org/2011/08/19/rose-colored-glasses
    “Josh Topolsky:

    Presses to buttons on the screen would go unanswered, applications would suddenly pause, lists I was scrolling moved intermittently and erratically (or would just disappear altogether). Sometimes the device felt smooth and light, while at other moments it locked up or sputtered to a point of complete aggravation. More than once I had the entire system freeze and then reboot while I was in the midst of navigating (or trying to navigate) my way out of some weird UI fender bender. All across the OS I found myself discovering dark corners of unfinished or untested chunks of the UI, like when I would use the upward swipe gesture to bring up the launcher, and accidentally open an app instead.”

  7. Problem is, it’s really hard to sell a product for $399 (where it’s actually profitable) once it’s been sold at $99. Hard, as in, probably impossible.

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