What I don't understand is, if they were so concerned about making money back, why did they reduce the price of the TouchPad so heavily?
They decided to pull out of the phone/tablet/pc business, which would mean that all of their stock becomes almost worthless overnight. There has been a common trend where the public will not buy a product where future support/development is not guaranteed (e.g. Nokia Symbian phones).
This gave them 2 options:
1) take back the unsold stock from retailers and lose all their production and development costs
2) offer a reduced price to sell all of their remaining stock and get back some money.
They went for the second option, and this does have a secondary advantage.
By getting more webOS device into peoples hands (reportedly about 1 million devices), they have made themselves an ecosystem. This gives them more leverage if they decide to license webOS and get other companies to make devices.
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