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HP CEO: We didn’t buy Palm to be in the smartphone business

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Got a spare $1.2 billion lying around so you can buy a smartphone giant and not make smartphones? HP does...

A month on from its purchase of Palm and on the same day as revealing 9,000 job cuts (3,000 net) HP CEO Mark Hurd (pictured) made the astonishing admission to the Bank of America Merrill Lynch technology conference that it won't "spend billions of dollars trying to go into the smartphone business; that doesn’t in any way make any sense." Except, err... if by owning Palm you're already in the smartphone business?!

Hurd continued:

"We didn’t buy Palm to be in the smartphone business. And I tell people that, but it doesn’t seem to resonate well {shock, horror!}. We bought it for the IP. The webOS is one of the two ground-up pieces of software that is built as a web operating environment… We have tens of millions of HP small form factor web-connected devices… Now imagine that being a web-connected environment where now you can get a common look and feel and a common set of services laid against that environment. That is a very value {sic} proposition."

So is being in a web-connected environment where now you can get a common look and feel and a common set of services over a range of devices dummy! Oh and way to encourage sales of the Pixi Plus and Pre Plus you just launched in the UK.

So will HP hang Palm's 18 years of handset expertise out to dry just because it doesn't want to produce a tablet with Chrome OS? Frustratingly Hurd wasn't pressed on this point, but it suggests a major attitude change from HP's position just five weeks ago when HP executive VP Todd Bradley joyfully declared:

"The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

I mentioned in my post on the Palm purchase that Hewlett Packard has a history of making a mess of the companies it buys, saying: "The $25bn acquisition of Compaq in 2002 was a farce, the iPaq horribly neglected and the 2006 purchase of Voodoo has transformed a once radical PC maker into such a generic range that its frustrated owner Ravi Sood quit the PC sector altogether."

Let's all hope this isn't the hat-trick...

Update 04.06.10: I thought a clarification may be in the offing and sure enough here is goes. The company has issued a statement saying:

"When we look at the market, we see an array of interconnected devices, including tablets, printers, and of course, smartphones. We believe webOS can become the backbone for many of HP's small form factor devices, and we expect to expand webOS's footprint beyond just the smartphone market, all while leveraging our financial strength, scale, and global reach to grow in smartphones."

All of which is nice, but I'd suggest continually putting out mixed messages isn't the best idea ever...

Source: ZDNet

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