Students at USF, CCSF or San Francisco State University, majoring in economics, understand that selling items at a profit is the cornerstone of a successful business.
HP says it will be making more TouchPads to fulfill demand for its fire sale 16GB HP tablet. If the 16GB tablet goes for the previous $99 price, HP will be losing $207 for each one sold.
Haste makes waste?
Shaw Wu, an analyst for Sterne Agee, believes the decision by HP to make the more HP tablets may have been done too quickly:
“They did a lot of these moves in haste,”
Maybe so, but HP has inadvertently put itself on the map with its dirt cheap TouchPads and may have invigorated the HP brand name in doing so.
HP management may be losing their shirts on TouchPad sales, but the publicity may bring in new business for its other products. An old saying goes, “Bad publicity is better than no publicity.” If this is true, HP has scored big time.
HP may be smarter than it looks
The continued production of TouchPads, even though it will be a short run and at a loss, will clear the clogged channels of TouchPad parts and components that are sitting idly in warehouses collecting dust; assembling more TouchPads will get rid of all this overstock.
In the long run, it will be a gigantic business write-off for HP. In the meanwhile, it can enjoy the enormous amount of attention it hasn’t seen in decades.
Source: Wall Street Journal
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