Thursday, August 18, 2011

HP dumps webOS, may sell off its PC business

HP announced today it will dump webOS, probably sell off its Personal Systems division, and acquire Autonomy.
We met with a couple of Gartner analysts earlier this year when one of them predicted HP would sell off its PS division soon. Except for printer cartridges, HP is losing its shirt on PCs where gross margins are razor thin. This is mainly due to Asian manufacturers like Acer, Asus, and Lenovo. Even Dell is feeling the pain. IBM got smart years ago, dumped its PC business on Lenovo, and focused heavily on services and software.

As for webOS, we have been saying all along HP's purchase of Palm was a blunder. We've heard of many sad and unhappy users of Palm Pixi that uses webOS with limited features and functionality. Many of them have had their Palm Pixi replaced three times in six months under manufacturer's warranty. On the day of the launch of the now-defunct webOS tablet, HP showed off 1,000 certified apps. Compare that with Apple's launch of iPad when it had 100,000 apps. We wonder what plans HP has for their customers stuck with Palm smartphones. HP's history in consumer electronics has been painful. Do HP Camera, HP TV, iPaq, and Jornada ring a bell to you?

Its just-announced intention to acquire Autonomy is a good move in the  right direction to strengthen its software portfolio. But the company's biggest challenge is integration with all its other software product suites. When it comes to software, HP has a transmission, an engine, a power train, and chassis, but has yet to show off a car! This will be an uphill battle to match Big Blue.

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