HP also scrapped 7-inch TouchPad

HP was just weeks away from announcing a new seven inch version of its TouchPad tablet before deciding to spin off the hardware business, sources tell TG Daily.

Speaking on condition of anonymity, TG was told by sources close to HP that the firm even had gotten as far as circulating several demo units to staff and select developers and that the smaller tablet “was working almost perfectly.”

Last month HP abruptly decided to call halt to its brief stint in the tablet market, selling off its 10-inch TouchPad WebOS tablets in a quarter price fire sale, both in the U.S. and in Europe, where the devices promptly flew off the shelves.

Our sources say the smaller device would have been released in time for the holiday season and would have appealed to those who felt the 10-inch to be too cumbersome and the Palm Pre phone too small.

“It was a really nice device, good size, working well, people who tested it liked it a lot,” our source said, noting that the effort would now be scrapped.

We think it’s a shame that an almost finished device would be tossed onto the trash heap without being given a fighting chance, but seeing as the 10-inch wasn’t given more than a month on the market, we can’t say we’re surprised.

Perhaps HP’s new CEO, Meg Whitman, will change her mind and reinstate it. Doubtful, but hey, a gadget geek can dream.