Still, though, even if theyâ€™d sold 500,000 of them it might have cost $100 million. Thatâ€™s a lot of money to spend on a promotion.
Sustainable businesses are built on profit.
True, profits sustain businesses. But in the case of conglomerates like HP where there are many business units, one business unit could be raking in profits while another might not. The money-losing business unit if deemed strategic enough could be sustained with profits from other parts of the company, and for quite some time until self-sustainable.
HP decided smartphones and tablets were not strategically important for the company’s future. If they were, short term losses could have been financed for profits in the long term. The decision to fold was shortsighted: Apple continues to prove enormous profits can be generated by focusing on consumers and not on enterprises.
Update: But here’s the interesting thing. Richard Kerris, VP of Worldwide Developer Relations at HP not too long ago shared this:
We think thereâ€™s a better opportunity for us to go after the enterprise space and those consumers that use PCs. This market is in itâ€™s infancy and there is plenty of room for both of us to grow.
So why drop the TouchPad when HP is now focusing on the enterprise?