Mobile
Commentary
11/9/2011
09:44 AM
Ed Hansberry
Ed Hansberry
Commentary
50%
50%

HP Announces Non-Decision On WebOS

HP gathered its employees for a big meeting about webOS to say it still isn't sure what to do with the platform.

People are usually equipped to handle good news and bad news. When it comes to uncertainty though, we generally handle that poorly, filling our time with worry, speculation, or worse. HP put its WebOS division employees firmly in that last category Tuesday during a company meeting where the message was "we don't have a message right now."

Reuters reported Tuesday that HP was contemplating the sale of its WebOS division for a few hundred million dollars, which is a bargain compared to the $1.2 billion paid in early 2010. When you count the money that was spent after the acquisition on developing and marketing the TouchPad tablet line, including the firesale which resulted when the entire project was canceled after just a few weeks, it isn't unreasonable to think HP will have lost over $1 billion, even if it manages to sell the company for $200 million to $300 million.

Newly appointed HP CEO Meg Whitman told a gathering of employees ... nothing. She said "It's really important to me to make the right decision, not the fast decision." A final decision, supposedly, is to come in the next few weeks.

Way to calm nerves and boost morale HP! The company truly doesn't know what it is doing with this platform. Let's recap:

-- Announced purchase of Palm and webOS in April 2010 for $1.2 billion.
-- Veer smartphone released in May 2011 on AT&T. No significant updates for Pre and Pixi line.
-- TouchPad tablet released in July 2011.
-- TouchPad tablet killed in August 2011 along with the Veer and other smartphones still in the market.

Basically, HP did less with WebOS than Palm ever did.

A sale would seem to be beneficial for the platform, but I don't think it will work. Whitman said in the meeting that getting back into the phone business is too complicated. I am not sure about complicated, but it is very expensive. Microsoft has been trying to get Windows Phone off the ground for a year. Even with a half billion dollars in marketing spend, WP7 still has single-digit market share after a year.

The tablet market isn't much less expensive. You can be sure hundreds of millions have been spent by tablet manufacturers trying to crack the iPad market, sometimes erroneously referred to as the tablet market.

If a behemoth with deep pockets like HP wasn't willing to spend its way into either of these markets, what other company would want anything to do with it? The only company that comes to mind that makes any sense is Amazon. Does Amazon need to spend hundreds of millions of dollars though to keep its Kindle line of e-readers fresh? It can probably do so for a lot less by using Android and just extending its licensing agreement with Microsoft.

Hopefully in a few weeks we--and HP employees--will know the fate of the division. Or HP could just hold another company meeting to let everyone know it's still thinking about it.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
rsexton322
50%
50%
rsexton322,
User Rank: Apprentice
11/10/2011 | 1:09:32 PM
re: HP Announces Non-Decision On WebOS
Personally, I am disappointed in HP as a company. WebOS was a letdown, but just this week support (offshore) refused to replace a defective DVDRom drive. Would not send a replacement, would not send a tech and the only way to cover it under warranty was to send the entire desktop PC back to HP for replacement. I really doubt if management knew of this they would agree, but management hired the offshore company. I've recommended HP products for over a decade and HP assumed my recommendation of the Proliant line of servers, but I can not and still sleep good at night recommend HP again. Down your head in SHAME HP! All over a 20.00 DVDRom drive. Way to go HP.
JohnnieK
50%
50%
JohnnieK,
User Rank: Apprentice
11/9/2011 | 11:18:52 PM
re: HP Announces Non-Decision On WebOS
leave it to HP to turn a non-announcement into news . . .

-JK http://www.longest.com/coupons...
ANON1237925156805
50%
50%
ANON1237925156805,
User Rank: Apprentice
11/9/2011 | 9:17:17 PM
re: HP Announces Non-Decision On WebOS
The problem and the sorrow isn't what happened yesterday; it's what's been happening for months if not years. I'm sure that Messrs. Hewlett and Packard are spinning in their graves at a dizzying rate at the failure of nerve, imagination, and execution of the great company they founded. Let's not lay this on the new administration though-not yet at least.

HP bought Palm for quite a bit of money, articulated a vision that had real promise, executed it poorly and then didn't give it a fair chance to pan out before pulling the plug. In doing so they have devalued what had the potential to be a good acquisition for them or for someone else. At this point there are no options other than ugly ones. There's no good reason for Ms. Whitman to rush her fences.

I'm guessing that the cause of this debacle was that not all of mgmt were truly on the same page at the time they made the acquisition or afterwards. That meant that there was no agreed upon set of goals, milestones, benchmarks, no definition of what would constitute success or failure. That's what leads to panic and panic is what drove Apotheker's ludicrous decision to retreat before the battle started.

I think that Meg Whitman is absolutely right to take the time to get everyone aligned so that they make a decision that is best for all. Who knows whether they will seek to sniff out potential buyers in the meantime? That said though they do need to make haste slowly. As WebOS develoeprs leave, which will be inevitable, that will only hurt the value of the technology whether it's sold or retained. Make haste slowly is the best we can hope for.
GSMITH971
50%
50%
GSMITH971,
User Rank: Apprentice
11/9/2011 | 7:58:28 PM
re: HP Announces Non-Decision On WebOS
When I heard about this non-decision yesterday I had to write a post as well. I'm so disappointed in HP, they had an opportunity to be great again and now they can't even figure out how to be mediocre.
ThePrisoner6
50%
50%
ThePrisoner6,
User Rank: Apprentice
11/9/2011 | 7:33:58 PM
re: HP Announces Non-Decision On WebOS
Great way to get the worst out of your employees. I suppose it doesn't matter if you're closing the division.

Personally, I could dream up a myriad of other applications for WebOS - from Cable DVRs to even possibly a friendly appliance front-end. Apparently HP lacks the imagination required for any such initiative.

It's sad, really. The people who developed the product probably have a better idea of its potential than HP executives, who are deciding the product's fate. Maybe it would be worthwhile for Whirlpool or Kenmore to buy them for a song and leverage the technology to make something useful in a niche that has yet to be fully exploited.

Somebody had better do it before Apple does, or they'll all be out of a job.
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Nov. 10, 2014
Just 30% of respondents to our new survey say their companies are very or extremely effective at identifying critical data and analyzing it to make decisions, down from 42% in 2013. What gives?
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.