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HP Shutting down WebOS

August 21, 2011

HP unceremoniously announced that its aspirations in the tablet and smartphone markets have disappeared in a puff of smoke Thursday, on its earnings call.

“We have made a difficult but necessary decision to shut down the webOS hardware decision by the Q4 2011 quarter,” HP CEO Leo Apotheker said on Thursday’s earnings call, before going on to tout the company’s possibilities in the enterprise market. He took full responsibility for all of the company’s decisions today.

Cathy Lesjak, HP’s CFO, was equally unsentimental about the end of the division.

“Our expectation was to establish TouchPad as the clear number two platform in tablets,” Lesjak said, before launching into a description of the tablet’s sad, short history. “It was clear that pricing parity would not generate demand,” she said, before saying that WebOS would have required significant investments over the next five years and that the risks of continuing it far outweighed the possible rewards.

HP CEO Leo Apotheker

In the Q&A session, Apotheker said that the company has heard high praise of WebOS’s software and will continue to look for ways to optimize the platform, including licensing. Lesjak said that the company’s decision to just shut down devices but not the software side will help make the division more profitable.

“If you look at the run rate losses there, you can attribute them pretty much to Palm,” Lesjak said.

HP’s decision to pull out of the tablet market further cements Apple’s dominance in the area, and raises more questions about the viability of Research in Motion’s integrated hardware/software approach. It’s also interesting to consider what this means for Google’s recent acquisition of Motorola Mobility, which some saw as an indication that the company is trying to adopt the same approach to catch Apple.

As for the company’s decision to try to spin off its personal computer division, Apotheker said that, for the foreseeable future, “PSG is part of HP and will be managed in a normal way.”


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