Why Is HP Giving Up On Tablets?

HP has gone through a roller coaster couple of weeks. In addition to trying to spin off their PC business, the company also killed the Touchpad, its webOS-based tablet, and priced the device at $99 to sell the remaining stock. After sales of the discounted tablet skyrocketed, the company then reversed itself and decided to produce a new limited run of the Touchpad. What is HP thinking? Republished with permission from Mobile Enterprise.

News in the mobile world is flying fast and furiously. First, Googlerola. Now, Hewlett-Packard is killing its fledgling TouchPad, putting its webOS operating system up for sale, and exiting the PC business altogether.

At a time when the world increasingly is migrating to mobile form factors, why is HP dropping out of the smartphone and tablet game? Will it regret the seemingly hasty decision in the future? Will another OEM or vendor snap up webOS and give it a second chance? And what can we make of HP’s decision to withdraw from the hardware business?

webOS never had a chance

When it comes to the enterprise, webOS certainly wasn’t a major player. “webOS was never considered an enterprise-grade platform,” says Dan Shey, practice director, mobile services, ABI Research. “It was never considered secure.”

“webOS was three years too late to matter,” adds Jack Gold, founder of J. Gold Associates. “Even with HP’s overwhelming market presence advantage, they could not make it work. That’s not to say it was a bad OS (it had many advanced features). But catching up in a market moving at lightning speed is always hard to do.”

But Andrew Borg, senior research analyst, wireless and mobility, Aberdeen Group, laments HP’s decision. “I think they’ll regret that they’ve lost control of webOS. It made sense in terms of cloud services to have the best endpoint platform—and webOS is designed for that. It’s more technically sophisticated than iOS, Windows Phone 7, or Android in terms of being tightly integrated with all essential Web services and HTML.”

Is webOS really dead?

HP announced that webOS is up for sale – to the tune of $1.2 billion. Is anyone in the market for a struggling operating system?

“Will someone pay $1.2 billion for webOS?” asks Shey. “I don’t think so. The next question is: will developers rally around webOS if they already have four or five other platforms to develop for—BlackBerry, Apple, Android, Microsoft, Symbian?”

Peter Crocker, founder of and principal analyst for Smith’s Point Analytics, says, “I don’t think that webOS has a prayer in the enterprise without HP. IT departments are not going to want to support a declining platform and it is not cool enough (like the iPhone) for CEOs to force them to.”

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