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

Gordon Kelly


[Updated] HP CEO: We didn't buy Palm to be in the smartphone business

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


June 3, 2010, 6:18 am

Facepalm.......shakes head in disbelief


June 3, 2010, 11:08 am

Dear HP Shareholders. This man is a moron. Please rid yourselves of his madness.

How many people have phones?

How many people have tablets / handheld computers?

Everyone has a phone and if you have an operating system like WebOS with investment ploughed in as it should be, coupled with strong hardware, then you rid most people of the need for bigger devices.

You can invest in a small, shrinking market (what with everyone getting smart phones from other companies and finding it hard to justify things like the iPad which are just big smart phones (sans phone in the case of the ipad (although perhaps they didn't want any Trigger Happy TV references with their swanky new fashion statement? Enough with the brackets, okay?))) or invest in a market nearly the size of the population of the first world.

Are they seriously this stupid and closed minded? They can't be.... they're in charge of a multi billion Pound company.


June 3, 2010, 12:12 pm

So you're saying I should stop holding my breath waiting on the pre 2?

That is some seriously disappointing news and makes little sense. Maybe he will come out with a statement today saying he was "Misunderstood" ...chance?

Oh and loved the picture by the way :)


June 3, 2010, 12:46 pm

*feel free to combine my 2 ramblings into one post if thats possible*

Ive thought a bit more about this and see a pretty big problem with this strategy. He says "Mobile devices" so we are assuming Tablets, ultra-portables etc will be the main platforms for WebOs based devices. Well ive an Android phone, so if I decided to buy a tablet one day (maybe after a severe blow to the head) I would more than likely go Android to keep all my content in sync and use any apps/games I have already purchased. Ditto with Iphone users. Anyone really brave could go for the full Windows experience.

All these would slot in nicely with ecosystems we are used to, WebOs would lack such an "anchor" thats ties people to the platform, like a smartphone would certainly help achieve.

I guess the same argument could be made against the forthcoming ChromeOS, we will have to wait and see.


June 3, 2010, 1:37 pm

Maybe he's thinking of all the other devices that HP make, such as medical equipment; printers etc.

Although having said that, I think it would be mad for them to ignore the phone market. Even BT are regretting selling O2 and getting back into mobiles.

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