onSale, a subsidiary of PC Mall Inc., this week sold out of a new shipment of HP Co.’s TouchPad in two days to prior customers after it cancelled most product orders due to insufficient supply.

The Chicago, IL-based retailer said this week that is has sold out of the new TouchPad restock. It added that it may not have sufficient inventory to meet demand.

onSale Sept. 21 allowed customers to purchase one TouchPad 32GB SKU at $149.99 by inputting their former Order ID and e-mail address.

In Aug., onSale, which is a merchant of Amazon.com Inc., disclaimed ‘in stock’ status of the TouchPad via Amazon.com.

The retailer allowed thousands for orders to be processed for several hours as consumers rushed to nab the TouchPad 16GB SKU for $99.00 plus shipping.

Within minutes, customers received a ‘Shipping Soon’ status which disabled the ability to cancel the order and indicated that the product would arrive within the next several days. But when shipment statuses were left unchanged and credit card purchase holds remained, consumers fumed and subsequently obliterated onSale’s Feedback Rating to 16 percent from 97 percent.

DigiTimes in Aug. reported that HP will produce 100,000 to 200,000 TouchPad units to clear inventory of components, including touch panels, batteries, and chassis.

The company has taken delivery of 800,000 to 900,000 units, all of which have sold out when it slashed prices of the 16GB SKU to $99, the report said.

The New York Times this month said HP will produce a limited supply of TouchPad units to be available by the end of Oct. at $99 for the 16GB SKU and $149 for the 32GB SKU.

The Palo Alto, CA-based company said in Aug. it will manufacture a limited quantity of TouchPad tablets in the fiscal fourth quarter of 2011, which ends Oct. 31, to meet demand.

HP previously said it would end the manufacture of webOS devices in the fourth quarter.

In addition, HP told CNET this week that current TouchPad owners will receive a new software update that will add new functionality to the hardware.

Customers who signed up for an email request notification via HP.com will be updated when availability specifics are available.

HP is considering a spinoff of the Personal Systems Group, which has held as the No. 1 PC business against low net profits.

HP Aug. 19 price cut the TouchPad 16GB SKU to $99.99 from $499.99 and the 32GB SKU to $149.99 from $599.99.

The discount prompted strong consumer demand at nationwide retailers, including Best Buy Co. Inc., Barnes & Noble Inc., and Wal-Mart Stores Inc., all of which have sold out of the device.

HP released the TouchPad tablet series in July in a Wi-Fi 16GB SKU and 32GB SKUs to compete against Apple Inc.’s iPad which has dominated the tablet market since launch in 2010.

Both include a 1.2Ghz Qualcomm Snapdragon Dual-Core CPU, 1GB RAM, and the webOS operating system in a 1.6 lb. device.

Despite powerful specs, the TouchPad held tepid demand at launch.

Amazon.com Inc. in Sept. said it will release the Kindle Fire Tablet Nov. 15 at $199.99.

The Kindle Fire includes a full-color 7-inch multi-touch IPS display, Dual-Core CPU, 8GB Internal Memory, Wi-Fi functionality, and up to eight hours of battery life.

Applications include the Amazon Silk Browser, E-Mail, Amazon Instant Video, Amazon Appstore, and Amazon Cloud Drive with unlimited cloud storage for Amazon content.

Finally, each Kindle Fire will include a free month of Amazon Prime membership.

Current competitors in the tablet space include Acer Inc.’s Iconia and Transformer SKUs, Samsung Group’s Galaxy Tab, and Motorola Mobility Inc.’s XOOM.

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