Apple s (NASDAQ: AAPL ) iPad has so far beaten all entrants into the tablet PC
race to such an extent that Apple has literally started preventing the sale of
competing tablets in countries around the world. But that isnt stopping hopeful
companies from throwing their own products out there hoping to find success. On
Sunday, HTC will release the HTC Jetstream, a 10-inch tablet. Sony (NYSE: SNE )
released not one but two tablets the familiar S1 and the odd clamshell-shaped
S2 on Wednesday in Tokyo and Berlin, with plans to release them around the
world through September. All of these devices fall in the $499-to-$599 price
window established by Apple. They likely will be outsold by the iPad by a wide
enough margin to kill them. Or maybe not. If Hewlett-Packard (NYSE: HPQ ) has
proven anything in the past month, its that a tablet doesnt have to die, even
when it fails. As of Thursday, the TouchPad is back in production. The storys
been told often over the past two weeks: The TouchPad tablet, developed by 2010
acquisition Palm and running the proprietary webOS operating system, sold so
poorly after releasing in July that HP announced it would exit the tablet and
smartphone markets entirely. The company set aside $100 million to compensate
miffed retailers like Best Buy (NYSE: BBY ) for stocking the device, and said
retailers began liquidating existing TouchPad stock at prices less than
one-fifth of what it released at. Then something unexpected happened: The
TouchPad sold out. Now hints made by the head of HPs PC division Todd Bradley
that his company was perhaps hasty in announcing its full departure from the
tablet business have turned out to be true. HP released a statement that it will
be manufacturing a limited quantity of TouchPads with webOS during our fourth
fiscal quarter, which ends October 31. Sterne Agee analyst Shaw Wu told All
Things Digital on Thursday that his sources within HPs supply chain indicate the
new TouchPad push is less an attempt to seize on consumer interest and more an
effort to appease production partners that were expecting to make a whole lot
more TouchPads before it crashed and burned at market. "This makes sense as it
is not in HP's interest to alienate the supply chain base and the company may
not lose as much money as it is bringing in some revenue as opposed to taking a
full write-down on commitments with no revenue," Wu said. A cautious business
maneuver or not, HP now has momentum with consumers on its side. What should it
do now? Fortunately for HP and its shareholders, its already made the necessary
first step: keeping the TouchPad brand present. Consumers love an underdog and
that identity, plus the $99 price point, have helped make HPs tablet a quiet hit
at the end of the summer. All HP has to do between now and 2012 is keep
extending slight production runs not flooding the market, just keeping the
devices following alive into 2012. By early next year, HP needs to find a way to
reconfigure its tablet so that it costs much less to produce. If it means taking
a hit on the tablets specifications a bit less memory, a slightly slower
processor it will be worth it to keep the list price below $200. HP then needs
to show this reconfigured TouchPad off at the Consumer Electronics Show in
January and release it by February, just ahead of the time frame Apple is
expected to deliver the iPad 3. Its rare to get a second lease on life in the
technology space. HP would be foolish to waste its opportunity. As of this
writing, Anthony John Agnello did not own a position in any of the stocks named
here. Follow him on Twitter at
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