HP Spinning Off WebOS and Exiting Hardware Business

A number of readers submitted rumors about some announcements HP was set to make today. Now, the announcements have actually happened, and the news looks grim. For starters, they are exiting the tablet and phone market and repositioning webOS for use in appliances and vehicles. While confirming they are in talks to acquire Autonomy, they also announced they are considering exiting the PC hardware business entirely in order to focus on their software business.

Comments

Low margins

[symbolset]

You have to work really hard for that PC dollar. In desktop PCs Microsoft makes several times the profit dollars per unit than HP or Lenovo does. Lenovo's crowing about "huge" $100M profits on $5B sales right now- about 2 percent. That's a lot of work and risk for $100M profit to be a good thing. You could blow $100M just by, say, building an initial run of half a million tablets that don't sell.

Fiorina's personality is irrelevant to me.

[jamrock]

I couldn't care less about Fiorina's personality, and frankly it has no bearing on the success of the company. By all accounts Steve Jobs is a complete asshole to work for, the proverbial boss from hell, but investors will forgive anything if he delivers results. Fiorina did not deliver, and the acquisition of Compaq was in my opinion a dramatic strategic mistake. The culture of engineering innovation at HP seemed to go out the window on her watch, and the company became a low-margin mass producer.

I've compared her before with Steve Ballmer of Microsoft. Both come from marketing backgrounds; when both assumed leadership of their respective companies engineers took a distant back seat; and investors rewarded both with flat stock prices in recognition of their inability to innovate and grow the business.