HP May Launch Low-Cost Android Smartphone This Month: Report

According to news reports, HP's device would be aimed at emerging markets and would cost about $200.

Hewlett-Packard CEO Meg Whitman and other executives have been saying for more than a year that the tech giant needed to get back into the smartphone market, despite its high-profile problems with its webOS-based devices in 2011.

According to reports, a new low-cost smartphone running Google's Android operating system and aimed at prepaid and emerging markets could launch as early as this month. The device has been under development for a year and a half under the direction of Alberto Torres, senior vice president of mobility at HP, the news site 9to5Google reported, citing an unnamed source inside the company.

The source told 9to5Google that the smartphone would fit inside the growing "phablet" segment, with its 5.5-inch display, and that it would come in at about $200.

There's been no official word from HP on an impending smartphone launch, but officials have been saying that developing and releasing new smartphones is in the plans for the company. Whitman told Fox Business News in September 2012 that as a computing company, HP has to get back into the highly competitive smartphone game.

"We have to ultimately offer a smartphone because in many countries in the world, that is your first computing device," she said. "There will be countries around the world where people many never own a tablet or a PC or a desktop. They'll do everything on a smartphone. We're a computing company. We have to take advantage of that form factor."

Last year, Yam Su Yin, HP senior director of consumer PC and media tablets in the Asia-Pacific region, told the Indian Express news site that smartphones will be an important part of the company's larger consumer and business computing effort.

"It would be silly if we say no," she said when asked about smartphones and HP's future. "HP has to be in the game."

If the reports about the new phone are correct—particularly regarding price and target markets—HP appears to be aiming at where the growth in the smartphone market will be over the next few years. IDC analysts in November said that mature markets like the United States are reaching the saturation point in smartphone sales. However, emerging markets—such as in Latin America, the Middle East, Africa and the Asia-Pacific region—will continue to see strong growth through at least 2017, and that the average selling price for the devices will continue to fall.

Smartphone shipments worldwide will hit 1.7 billion units by 2017, growing 18.4 between 2013 and then, IDC found. However, shipments in the emerging markets will exceed that, the analysts said.

"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," Ramon Llamas, research manager with IDC's mobile phone team, said in a statement. "Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass-market users. Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience."

HP for more than a year has been pushing a multiple-OS approach in its computing devices, embracing not only Windows and Linux but also now Google's Chrome and Android. The use of Android in its smartphones will help the company extend its reach, but also will put it in tight competition with a wide range of device makers that also sell Android devices, including market leader Samsung. How HP differentiates itself from those other device OEMs remains to be seen.

However, Whitman said in her 2012 interview that the company can't afford another setback like the one with the webOS smartphones, which never really hit the market before they were shelved, along with the company's ill-fated webOS-based TouchPad tablet. HP in 2010 spent $1.2 billion buying mobile device maker Palm, which created the webOS operating system.

Under then-CEO Leo Apotheker, HP in 2011 announced plans to extend the use of webOS not only in smartphones and tablets, but also in PCs and other computing systems. However, those plans quickly fell by the wayside, and Apotheker was soon ousted in favor of Whitman.

"We did take a detour into smartphones, and we've got to get it right this time," she said.