Consumers Aren't Touching HP's TouchPad; Best Buy Sits on 200,000

Best Buy has its hands on a product bomb -- more than 200,000 unsold TouchPad tablets the company is threatening to ship back to HP, the manufacturer.

So far, Best Buy, a leading big box electronics retailer, has sold only an estimated 25,000 TouchPads, not counting for returns. Best Buy doesn't want the slow-selling and expensive inventory on store shelves and in warehouses and is asking HP to take them back. Best Buy ordered 275,000 of the HP tablets which launched last month to lukewarm reviews and tepid customer response.

Even with a $100 discount on the TouchPad after HP cut the price on its 16GB version to $450 and the 32 GB version to $550, Best Buy can't move the product. Media reports suggest that HP's Todd Bradley or another company executive will fly to Best Buy's headquarters in Minneapolis to try and persuade the company to stick with the TouchPad.

Other retailers are also facing high inventory and slow sales with HP's TouchPad. Wal-Mart, Staples and other big box retailers are reporting terribly slow TouchPad sales and high inventory numbers. Some suggest HP's quick move to slash prices on the TouchPad did nothing to spur sales.

If anything, some observers suggest, HP's quick deep discount only devalued the TouchPad, further slowing sales.

Last week, Staples offered an additional $100 discount added on top of HP's initial $100 price cut but it did little to get the product moving.

HP's TouchPad was hailed by the company as a signature product designed to take considerable market share from Apple's iPad. Yet the product is lagging far behind HP's retail expectations for the debut webOS tablets. HP had acquired the webOS system from Palm in its buyout of that company.

The Wall Street Journal has called the TouchPad the "OuchPad," because the product is causing such a rippling financial disaster from HP to retailers like Best Buy, Wal-Mart and Staples. The retailers don't want them taking up shelf and warehouse space, and HP doesn't want them back.

The only good news for consumers may be even deeper discounts coming to HP's TouchPad soon.