HP's Inability to Communicate Dooms webOS, Mortally Wounds PC Business

It was the biggest tech news of the year so far, but last week's revelations by HP about its PC and mobile OS businesses was so badly bungled by the computing giant that we all got the wrong message. The net effect, of course, is that HP has accomplished what it never intended: It has killed any future for its webOS mobile system. And it has possibly mortally wounded its thus-far dominant PC business as well.

The headlines earlier this week were clear enough: "HP Kills webOS" and "HP to Sell, Spin Off PC Business" are representative. But amazingly, neither of these is accurate.

For webOS, the mobile platform that HP received with its $1.2 billion purchase of Palm in 2010, the real plan is for HP to stop selling mobile devices only. This includes its in-progress line of Palm-branded smartphones (the Pre, Veer, and Pixi) as well as the TouchPad tablet, an iPad-like device that quickly tanked this summer.

"Our webOS devices have not gained enough traction in the marketplace with consumers, and we see too long a ramp-up in the market share," HP CEO Leo Apotheker said last week on a conference call with analysts and the press. "Therefore, we have made a difficult but necessary decision to shut down the webOS hardware operations within Q4 2011."

Notice he said "hardware operations" only. HP does not intend to kill or sell off webOS. In fact, it will continue developing the system, use it in many of its own products—including printers but also, incredibly, PCs—and will seek to license webOS to third-party hardware makers. These hardware makers are of course free to begin selling their own webOS-based smartphones and tablets if they'd like.

So webOS does have a future. This is a dramatically different outcome than what we all reported just a few days ago. HP confirmed this strategy on its corporate blog, where it notes that the company would "suspend development of devices running HP webOS" but would "ensure the platform's evolution." Managing the news better last week would have gone a long way toward that.

With regards to PCs, HP might indeed sell or spin off its entire PC business. But that's not the only possible outcome here. In a press release, the company wrote that its board of directors has authorized the evaluation of several possible outcomes for the PC business. These include "the separation of its PC business into a separate company through a spin-off or other transaction," as reported. But a separate HP corporate blog notes that this transaction could result in only a "partial separation" of the PC business—perhaps just the consumer portion—and not the full PC business.

And HP might never, in fact, sell of the PC business, depending on how the evaluation goes. "There can be no assurance that any transaction regarding [the PC business, called the Personal Systems Group] will be pursued or completed," the company noted.

Put simply, HP is looking at alternatives. And if I'm reading between the lines accurately here, what the company intended to do was show how decisive it could be by demonstrating that even its dominant PC business wasn't outside the realm of possible cuts in HP's mad dash to reinvention. Of course, HP's scatterbrained strategy backfired, and its webOS and PC businesses seem less valuable now than before the announcement. This has to be exactly the opposite effect than what HP intended. And it has killed excitement in both of these product lines—both from users and from those companies that might have previously paid top dollar for them.

As for the reporting side of this story—my own headline read, HP Kills webOS, Will Sell Off PC Business—I'm willing to concede a combination of "the fog of war" and HP's inability to communicate effectively. But come on. HP was preparing for these revelations and had the opportunity to direct the messaging to their needs. And the company completely blew it.

TAGS: Windows 8
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.