Slashdot Mirror
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.
"According to one source who has seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory."
http://allthingsd.com/20110816/ouchpad-best-buy-sitting-on-a-pile-of-unsold-hp-tablets/
I hope that HP will somehow weather the turbulence and emerge stronger than ever. This is the company that built Silicon Valley and for decades was the benchmark for tech innovation, and it's so painful to watch them floundering like this. And I'm especially saddened that WebOS never really had a chance to strut it's stuff. I'm a very happy iPad owner, but I have the greatest respect and admiration for what the Palm team accomplished with WebOS's interface, and I was hoping that it would take off and keep Apple on their toes.
I personally blame Carly Fiorina for the travails of a once-proud company.
So HP is jettisoning all of the things that made it HP two years ago and just focusing on the stuff they got when they bought Palm? Does this sound like they are trying to blow up the company to anyone else?
I'm sorry to see it go, but I'm not at all surprised. I was a release-day Palm Pre buyer (Sprint), and I LOVED WebOS, but Palm really blew it. If there were more apps and the hardware was better (and upgraded more regularly) I would probably have gone with WebOS over Android or iOS, but in the end they left me hanging with no decent upgrade path (the Pre was an okay first-gen device, but really needed a major followup at the one-year mark) and they just didn't attract the app developers (I mean the major developers, the indie devs were fantastic!). End result, I'm now a happy Android user (HTC Evo), but I still miss the great parts of WebOS (Cards, Konami-code to root, etc).
Well, I'll just keep hoping that some of that good stuff makes it to Android eventually. Last I heard that's where most of the WebOS team ended up.....
As for WebOS in vehicles....great, just what I need. People have enough crap that they play with instead of paying attention to the road, now they're going to be swiping through multiple cards on their in-dash systems looking for things while careening down the highway? Wonderful....
Some bring out the best in others, some the worst. Some bring out far more.
So can I get a TouchPad for $100 now?
hp hasn't been in the PC hardware business for quite some time. When they realized they could adopt the razor model with their printers they dropped their first core business like a hot potato and never looked back. They have never been a serious PC manufacturer despite all the PC's they managed to sell. I knew when they bought Palm WebOS was doomed just like when they bought Compaq.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Yeah bring back Carly Fiorina! Oh wait...
Seven puppies were harmed during the making of this post.
for the same reason Carly fired almost all of R&D, sold the itanium engineers to Intel, and considered getting out the printer market, despite those sales being the majority of their revenue: greed, short-sightedness, selfishness, and the desire to be seen in the news.
HP's software business is EDS, which is charging governments vast sums of money for IT systems that don't work.
Profit margins in the PC hardware business are razor-thin, and not likely to improve. So while their PC business does generate a large percentage of their revenue, it is a much smaller percentage of their profits.
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.
Help stamp out iliturcy.
So, HP was an instrument company, started with an ingenious application of a light bulb no less. Then they became a computer company sort of by attrition, since they needed machines to control their instruments -- IIRC. Then servers came sort of naturally when they got to dabble with UNIX. Then the core instrument business got spun off as Agilent, pretty much tarring the name of Hewlett and Packard IMHO. Then the PC business gets spun off too. So what remains is servers? What the heck software is HP shipping that hasn't to do with their own hardware? It's becoming more and more of a joke to keep the same name. Their business got nothing to do with Hewlett nor Packard. They're turning in their graves. </rant>
A successful API design takes a mixture of software design and pedagogy.
Compaq
that's keeping a lot of people employed
I obviously wasn't intending to talk about anything like this, but hey, you brought it up. :P So this statement you made is one that I see a lot of people making and I think it shows a disconnect between the understanding of what a profit actually means and what jobs are. You probably don't want to hear about it, but it bothers me, so deal.
A profit is far more than just making moneyIt shows that you are creating wealth. One of the fundamental law of economics is that trade creates wealth. By trading, you should end up with more than you gave up. When you can't make a profit, it shows that resources are being improperly allocated. If HP decides they suck at PCs and close down, that doesn't mean those jobs and resources are lost. It means they have to be reallocated. If HP sold 1,000,000 PCs a year, that doesn't mean there are 1,000,000 PCs less going to be purchased. A business staying around that doesn't make a profit is preventing those resources from being used by a company that can make better use of them and create more wealth. This creation of wealth is one of the biggest assets to the advancement of humanity and to encourage the opposite prevents progress from happening. The problem that a lot of people have, of course, is that the wealth ends up in the hands of the top and the elite, but this frustration should not be used to advocate the prevention of wealth creation. This is the result of very different causes.
Who blames Carly because she was rude? From all accounts I've heard, the Compaq merger was a huge mistake, as was the spin-off of Agilent and the iPod cross-licensing with Apple. You think that the party thrown when she left was just because she was rude? Why did HP's market cap raise by $8 BILLION when she left? Surely market traders on Wall street wouldn't care whether she was gruff with her employees.
This is the company that built Silicon Valley and for decades was the benchmark for tech innovation, and it's so painful to watch them floundering like this.
No, that was Agilent, the test and measurement company. We're talking about HP, the Printer/Business Services/Bottom-barrel PC company. Totally different.
Shows you the importance of a name on perception. Often major companies split or spin-off major parts of themselves to the extent that one could question whether the current user of the name is meaningfully the "same" company as the original.
It occurs to me that it may be useful to consider the lineage of the various business entities formed from mergers, takeovers, spinoffs and splits *without* attaching weight to their names. Then- considering lineage, size and business interests- askine oneself whether the current holder of the "big name" is any more clearly the "true" continuation of the original company than any of the others.
In the case of Agilent, it's still (apparently) far smaller than HP which remains the obvious parent, but it could also be argued that it represents the roots of HP.
Motorola is the obvious example that sprung to mind though. It's spun-off or split major parts of itself several times and at the start of this year split into Motorola Solutions and Motorola Mobile, the latter being the business that Google recently bought. But this is after already having spun/split-off its semiconductor divisions in 1999 and 2004, as well as its original radio business (on which it founded its reputation) having been sold off in the 1970s.
Is Motorola "Solutions" (*) still the same Motorola that created the old products people get nostalgic about? That's questionable.
(*) Absolutely meaningless sound-good business expression that's so banally all-pervasive that it doesn't even qualify as a "buzzword" any more.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
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.
I'm a little surprised more /.'ers aren't familiar with HP's software and services division. HP is considered to be one of the "Big 4" of enterprise infrastructure, service, and asset management, along with CA, BMC, and IBM. HP's acquisition of EDS strengthened their professional consulting position, and put them squarely in competition with IBM as their main software/services competitor.
Enterprise software is basically a license to print money. Companies and governments spend inordinate amounts of cash on the Big 4's closed-source software, enterprise license agreements, support contracts, and implementation services. If HP is anything like CA or IBM, they're making the vast majority of their money on enterprise software and services, and very little on PC's and devices. Spinning off or selling their PC / device manufacturing business made sense for IBM, and it makes sense for HP, especially in light of the consumer competition in that space. There simply isn't the same competition in the enterprise space, hence why the Big 4 can charge the inflated prices they do for their software and services.
Commoditization of the hardware and razor thing margins leads to a rather severe avoidance of risk. Risk-taking is what drives innovation. That's why PC OEMs haven't given us anything amazing and revolutionary for fifteen years. They can't afford the risk. That's also why they dare not turn from Windows to new software platforms. To do so would be to decline Microsoft's co-marketing dollars which are not just all of their profits but offset a lot of their negative profits as well. This would drive the price of all of their products up, not just the innovative ones, guarantee failure in the marketplace.
Now with the shift to mobile they get the risk whether they choose to avoid it or not. It had to happen eventually. The increased risks of a dynamic market combined with razor thin margins make for a guaranteed money loser. Deprived of the freedom to innovate and build brand premium they have no choice but to fold their hand.
HP has just run the numbers and figured out what IBM did in 2005: the only way to win is not to play this game. There are other games to play that offer at least the hope of a good win someday.
Unfortunately they've also just announced that they're ready to spin off a major product line with no buyer in view, no plan. This will almost certainly result in rapid sales decline until people see what the outcome will be. This is the Elop maneuver.
Help stamp out iliturcy.