Less than two years after it acquired Palm for $1.2 billion, and only a few months after unveiling ambitious hardware plans centered on Palm’s webOS, Hewlett-Packard announced it was killing that strategy with extreme prejudice.
If webOS withers and dies, or ends up purchased by yet another company that fails to actualize the software in a new line of products, it will offer small but tangible benefits to a number of companies. Apple will have eliminated a nascent competitor to its iPad and iPhone franchises. Microsoft will no longer face the possibility of another platform trying to elbow its way onto Windows’ turf. Research In Motion and Google will have a shot at more customers for their respective tablet and smartphone products.
Yes, HP seemed to have big plans for webOS. But at least one analyst believes the operating system never stood a real chance against its largest competitors, particularly Apple.
“They were trying to catch a train,” Mark Margevicius, an analyst with Gartner, wrote in an Aug. 18 research note. “With Apple, they were trying to catch the bullet train. It was impossible.”
The webOS implosion came as a shock to many.
“HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad [tablet] and webOS phones,” read an Aug. 18 statement released ahead of its earnings call. “HP will continue to explore options to optimize the value of webOS software going forward.” Its bottom-line revenue for the fiscal fourth quarter 2011 will absorb restructuring and shutdown costs associated with webOS devices.
The company neglected to mention whether TouchPad and webOS smartphone owners would continue to receive support for their devices. Certainly webOS developers must be a mite concerned about the future of the platform. For the past several months, HP had pushed an aggressive vision for webOS, one in which the operating system found its way not only onto tablets and smartphones, but also laptops and desktops.
HP CEO Leo Apotheker had previously made no secret of his plans to eventually license webOS to other manufacturers, suggesting in a March 9 Bloomberg report that such a move would help create a “massive platform.” That month, the company announced it would install webOS on all desktop and notebook computers in 2012. And just this week, an HP executive told the Wall Street Journal that the operating system could find its way into household devices and automobiles.
“We’re looking at expanding the base and bringing to the webOS community an ecosystem that inspires developers out there,” Stephen DeWitt, HP’s senior vice president of webOS, told the Journal, while neglecting to mention any specific manufacturing partners.
But there were also signs that webOS and its associated devices were in serious sales trouble. According to an unnamed source speaking to AllThingsD‘s Arik Hesseldahl, “Best Buy has taken delivery of 270,000 TouchPads, and has so far managed to sell only 25,000.” That source reportedly had access to internal HP reports.
HP is also exploring “strategic alternatives for its Personal Systems Group (PSG),” its PC arm, including a possible spin-off. That, combined with the summary execution of the webOS ecosystem, appears the beginnings of a plan to consolidate the company’s operations around services and software, imitating in many ways the model established by IBM some years ago.
A few days ago, HP executives would tell you that webOS was a serious contender. Now the company will doubtlessly try to license or sell the platform to someone else in the space.