HP urged not to ditch TouchPad

HP should reconsider dumping its TouchPad tablet, says technology research firm Canalys, in a report that suggests the discounted top-seller could more than double the value of the PC division that HP plans to spin off.

The webOS-based Touchpad began flying off shelves around the world after HP cut the price of the device to just £89 for the 16GB model and £115 for the 32GB, following poor sales at its initial price tag of £349/£399.

But the decision to ditch the brand was wrong, says Canalys.

"The TouchPad was overpriced at launch and did not sell," Canalys said in a research note. "This led HP to draw a premature conclusion that the product category had failed,"

"The TouchPad has become the 'must-have' technology product of 2011. Perhaps no other technology vendor, apart from Apple, has ever created such hype for a technology product," the note continued.

According to Canalys, if HP seizes its chance while hype about the TouchPad is still fresh in the public's mind, it could grab as much as ten per cent of the iPad-dominated tablet market - and in doing so increase the estimated value of its threatened PC business to between $8 billion and $10 billion. The IT giant announced in August that it may shed the PC unit, which is the largest in the world following HP's $25 billion acquisition of Compaq in 2002.

"HP has established a lead in the race to be the number two behind Apple in the pad business but the window of opportunity will begin to close if delays occur," Canalys concluded.