Ronnie05's Blog

HP’s consumer busines foray:its biggest judgement error!

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 20, 2011

Even while some people had some lingering expectation about a fourth front in smartphones and tablets, where WebOS and HP could have played a niche dominated role- HP dropped the ball.HP is not seemingly keen on the consumer space and has indicated that it will discontinue its tablet computer and smartphone products and may sell or spin off its PC division, bowing out of the consumer businesses.

HP killing the Touchpad/WebOS, its decision to hive of its PC business and the extreme business re-direction towards selling software solutions, servers and other business equipment to B2B sellers is a fall out of a massive strategy re-think. This is one of the most extreme makeovers in the company’s 72-year history and signals new CEO Leo Apotheker’s most transparent move to date to make HP look more like longtime rival IBM Corp.

Unfortunately, it does give a impression that HP for the last some months has been undecided on its future course which is so not good for a business house such as HP. It means that the $1.25 bln it spent in acquiring Palm and the $1 bln restructuring cost booked in Q4 this year has been a drain on the resources and a massive let down for the shareholders. One may argure that all that all this is with a cause of making money in the long term, but it still doesnot take the limelight away from the fact that HP was de-focussed on its intent around consumer markets. HP has allready lost 55% share value from its share price high this February.

HP's fall from its $40 highs to $16 levels has erased 60% of its market Cap

HP's fall from its $40 highs to $16 levels has erased 60% of its market Cap

In as far as Web OS touchpads and the HP series of Smartphones in concerned, it was rather evident even before HP entered the fray, that it was going to be a crowded market and a bloody battle with no easy footholds and quick victories.It is here that HP was the victim of the Apple and Google juggernauts, as iPads and iPhones and smartphones running Google’s Android software have been hot sellers, while HP devices have languished. Why wasn’t HP able to factor that in? In light of the Motorola acquisition by Google, Tech pundits had speculated that rivals HP and Microsoft could potentially capitalize on Google’s acquisition by licensing webOS and Windows Mobile OS out to these manufacturers. HP it seems thought differently altogether.

It’s also possible that HP could follow in Motorola’s footsteps, putting its patent portfolio on the market for a hefty sale. That way HP would extract some salvage value from its consumer-business asssets.

HP now presents another case study hings of how things can go from good to concerning in a few business quarters

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