Say goodbye to webOS devices like TouchPad, Pre and Veer.
Bloomberg broke the news and surprised many analyst as Hewlett-Packard announced this morning that HP will stop making tablets and smartphones hardware running webOS. The company also made other announcements about the PC business and a plan to buy Autonomy for $10.25 billion cash.
HP Discontinued WebOS
Apple wins again.
We have sensed that HP is in critical situation because a news come out yesterday that Best Buy allegedly has sold only less than 10% of the TouchPad stocks and the retailer wants to return the 200,000 unsold units to HP.
Many investors and shareholders were upset because of the tablet’s poor sales and TouchPad did not get traction it was hoping for. It came too late in the game and it faced tough competition against Apple iPad 2. There was also little support from third-party developers unlike Apple iOS and Google Android. It strengthen the notion that without apps, there will be no sales in the tablet and mobile market.
WebOS is an elegant software platform and HP reiterated that webOS itself isn’t dead. It is seeking the best hardware partner for the mobile operating system. With Google’s recent acquisition of Motorola, disillusioned Android partners might think twice in getting an alternative OS for their hardware devices.
HP to Spin-Off PC Business
On the other side of the story, HP will also evaluate the PC business for strategic alternatives. It could be a spin-off or other transaction or whatever that means.
HP confirmed that the tablet effect is real and unfortunately TouchPad could not deliver the expected sales to cover for the shrinking PC market.
Even though HP remains the world’s largest PC maker, the Personal System Group needs to make the best decisions with more flexibility and agility because of lower margins and tougher economy.
According to the announcement, HP is implementing a plan to fundamentally transform the company.
The personal computing market is quickly evolving with new form factors and application ecosystems. Given these realities, HP believes it is in the best interests of the company and its shareholders to explore ways for PSG to position itself to address these rapid changes and maintain its technological and market leadership positions.
This new direction for HP’s PC business will take effect from 12 to 16 months as the company explore the alternatives for personal computing market.
HP to buy Autonomy for $10.25 billion
Further more, HP also announced an all-cash offer for Autonomy which is a global leader in Information Management software for the enterprise.
“Autonomy presents an opportunity to accelerate our strategic vision to decisively and profitably lead a large and growing space,” said Léo Apotheker, HP president and chief executive officer. “Autonomy brings to HP higher value business solutions that will help customers manage the explosion of information. Together with Autonomy, we plan to reinvent how both unstructured and structured data is processed, analyzed, optimized, automated and protected. Autonomy has an attractive business model, including a strong cloud based solution set, which is aligned with HP’s efforts to improve our portfolio mix. We believe this bold action will squarely position HP in software and information to create the next-generation Information Platform, and thereby, create significant value for our shareholders.”
Drastic times call for drastic measures and HP is making such a big bet to focus on the strengths of the company.