The INQUIRER - unfair, unbalanced
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What next for HP?
IT'S BEEN A BUSY 24 hours for our favourite maker of expensive printer ink. HP used its earnings call on Thursday to announce it wanted rid of its PC business, and was also putting an end to the Touchpad and WebOS smartphones. Instead, the firm wants to cement its position in the enterprise software space, and has splashed out £7bn to acquire search and archiving firm Autonomy.
The INQUIRER has rounded up the top takeaways from the announcements, and also rates the likelihood of certain events occurring in the wake of the HP news.
Is it the death of the PC, 30 years and six days from its official birth? Friday 12 August 1981 was the official launch of the first IBM PC. And within a week of celebrating the PC's 30th birthday, HP wants out.
IBM of course exited the business a long time ago, selling off its PC and laptops division to Lenovo back in 2005. However, HP's move seems more a knee-jerk reaction to the current obsession with tablets and the sudden rise of Apple in the consumer hardware market. Yes, tablets are the fastest-growing segment of the mobile devices market at present, but anyone claiming that they will replace desktops/laptops in the business environment anytime soon can't have been in many offices recently.
Likelihood of the death of the PC: 2/10
Dell/Acer/Asus/other PC manufacturer to buy HP's PC business
HP is still the biggest PC vendor according to the latest analyst reports, so will others rush to snap up this part of the business? Dell already has a strong global brand and supply chain, and is also seeing stuttering sales. Lenovo already has IBM's PC cast-offs, so it no longer needs a foothold in the Western market. Acer or Asus are more likely candidates, but they might not like the price tag.
Likelihood of PC business being sold-off at a decent price: 3/10
The TouchPad was destined to fail from the start
Anyone entering the tablet market with a device priced around the cost of an Ipad needs to go straight back to the drawing board. HP made a mistake in thinking that the underlying OS would be enough to draw people away from Apple mania.
While Apple has sold a whopping 14 million Ipads this year alone, retailer Best Buy is reportedly sitting on more than 200,000 unsold Touchpads with maximum sales at 25,000 units, even with a $100 discount. Just before the HP announcement, the latest reports were that Best Buy was asking HP to take back the remaining Touchpads, only a month or so after they went on sale. Even Samsung, which offers the more popular Android-based Galaxy Tab, was forced to backtrack on claims it made in January that it had sold two million of its 7-inch models since their launch in the fourth quarter last year, admitting this was the number of units shipped to retailers, not sold to customers.
The shame of it is that WebOS is a great OS, especially for multi-tasking and integration and could have been used to run a fantastic tablet if HP could have gone for a more basic model. The only way to have a good crack at Apple Ipads is to go for a low-end model priced somewhere in the Kindle range, that can be bought as a gift rather than a month's salary.
Likelihood of Touchpad ever succeeding in its current format: 0/10
Tags: Hardware
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HP could also go bankrupt.
"We don't make anything now. That's our strategy. And our balance sheet is great!"
All the HP tablets are or will be sold probably 450K in the next couple days. Thats a decent starting base for WebOS despite it costing HP money. Even if the tablet goes nowhere its HTML5, Adobe Flash, Plays X.264, and has the Kindle app so for $99-$150 its a steal just to surf the web, play a video, and read a book it also has a USB port.
HP isnt killing off WebOS but trying to license it as it currently has a 450K base or Someone like HTC might buy the OS and continue to develop it.
As for its speed you can make WebOS as fast as any other tablet OS out there just google for turning off logging which for some reason is cranked up in WebOS on the HP Touchpad. Turn it off and its blazing fast. The touchpad also overclocks to 1.7ghz.
Finally if all fails there is a talented group that started three days ago on porting Android to the tablet since its very similar to the samsung galaxy and WebOS provides a lot of Open Source to the device. Within no time at all they had the device rooted they have a bit of work but should be able to get Android running on the device pretty quickly.
... that HP has sold way too many cheap PCs and Laptops that didn't make them much money AND they didn't make the people that bought them very happy with the poor reliability. Dell went down that road for several years on their consumer PCs.
It's hard to see a company that built such great hardware some time ago come to this. I still have a fond spot for my HP calculators I used in engineering, which were several times more expensive than anything else, but they never broke, and they were elegantly designed.
WHAT NEXT? MORE POWER! URH, URH, URH.
Even if the Enterprise is HPs rightful future, a big struggle going forward will be "consumer confidence". Pulling the tablet after such a short period of time, even if financially a reasonable move, will make consumers question company commitment to future products and technology. This can hurt. HP's past ten years have been filled with twist and turns, tumultuous turnover at the top, and changes in strategic direction. How do you convey commitment and stability to your customers? Dropping the entire consumer business...is this HP: Innovator turned Dinosaur? Never mind promising stability to its 300K+ employees...Investors have been understandably critical of yet another dramatic HP milestone. The PSG business is the lowest margin BU in HP's current organization (5.9%), from that perspective it makes sense. Maybe the financial services piece is next (also single-digit margins). How does that fit in with the vision of "expand[ing] the company into software and services that help customers deliver computing over the Internet, via the so-called cloud."
HP: Innovator turned Dinosaur
http://journalofsocalledbizwoman.blogspot.com/2011/08/hp-innovator-turned-dinosaur.html
Probably somewhat related.
But what SHOULD happen, as with all corporations: broken up before 30 years (HP is about 72 years old now). HP is definitely senile, has lost its mind, its heart, and is looking to sell its soul.
HP ditching the PC division doesn't surprise me as IBM did spin off to lenovo and Acer stopped building computers by itself really long time ago with the Let-the-others-make-their job-and-manufacture-the-things-we-just-put-the-Acer-sticker-on-it aproach
But the failure of the Palm Pre and Pixie are really surprising to me. They were very good products, they just couldn't compete against the iphone and later on against both iphone and android phones.
The touchpads and ipads and everything pad related are not of my interest, but if they cut them to half the price, I would be glad to buy one just for experimenting. Web Os is a sensational Os.