The Reason More TouchPads Are Being Made: Supplier Component Overload and Contracts

Following yesterday’s announcement from HP that it would manufacture another run of HP TouchPad tablets, the real reason for the sudden change of heart in making more wasn’t due to the unexpected demand that it didn’t predict when deciding to fire sale the now exhausted stock that was collecting dust in warehouses and shelves across North America. No, there’s an even better explanation.

It has to do with suppliers for the hardware and the contracts that were in place before HP announced that it would immediately cease development and support of webOS hardware, as the suppliers that were tasked with providing HP with the components necessary to manufacture and assemble the TouchPad found out along with everyone else, which understandably caught them off guard and threatened to leave them with an oversupply of useless parts that do no one but HP any good. On top of that, the sudden change revealed that HP was all set to release a 7-inch version of the TouchPad, known as the TouchPad Go which got lost in the shuffle in the wake of the cancellation.

Rather than face an army of pissed off suppliers and risk litigation for breaking those supplier contracts without prior notice, HP has instead decided to do the right thing and resume production of the TouchPad. Of course, HP spun it as one final product run, but that’s only because they had to cancel pending orders due to lack of stock due to their inventory management system which overestimated how many units they had to begin with.

Now with the component oversupply, it remains to be seen just how many TouchPads HP can make before the parts inventory runs out, as their ODM in Inventec was set up to manufacture 100,000 7-inch units before the plug was pulled. This might mean we may get to see the 7-inch TouchPad Go after all, even if it is a limited run model.