Not too long ago, a lot of people were pleasantly surprised when HP announced it would buy smartphone maker Palm. While Palm launched a very well-received mobile operating system, the hardware it ran on was of questionable quality, leading to lower-than-expected sales and thus financial problems. Now that HP has bought Palm, we’re certainly going to see the webOS running on top-notch smartphones, right? Well, not if it’s up to HP CEO Mark Hurd. Update: This gives a slightly different angle.
In a speech at the Bank of America Merrill Lynch technology conference, HP CEO Mark Hurd made a few very surprising comments about the Palm acquisition. It’s no secret that HP is looking into putting the webOS on anything from tablets to printers, but in what is surely quite surprising, HP is not interested in the smartphone business.
Hurd said that HP is not going to “spend billions of dollars trying to go into the smartphone business; that doesn’t in any way make any sense”.
“We didn’t buy Palm to be in the smartphone business. And I tell people that, but it doesn’t seem to resonate well,” Hurd explained, “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 proposition.”
Mr Hurd, maybe it doesn’t “resonate well” because it sounds totally ludicrous? The webOS has been designed from the ground-up to be a smartphone operating system, and in that capacity, it has received raving reviews from all corners of the world. The problem has always been the hardware, and what do you know, HP is a hardware company! It seems like such a no-brainer to ditch HP’s completely irrelevant iPaq Windows Phone business in favour of Palm’s that saying anything to the contrary indeed wouldn’t “resonate well”.
I’m just hoping that Hurd’s being misquoted here or something, because I’m not exactly looking forward to my first confrontation with the webOS being on a darn printer with ink made out of unicorn blood.
I don’t think he is misquoted. It is just that he has no vision, like Balmer.
For most people smartphones will be the only computer they need (just add WiDi and a BT keyboard to a ARM dualcore and 1GB Ram and you have a copmuter that will do 99% of what most people need).
HP obviously does not want to have a future with such a big potential.
HP don’t want to be in the commodity game anymore. They’re in a deep pit with their PC business, busy dying. HP may believe that smart phones are also going to become a commodity. Profitability is with something unique, focused and that differentiates itself. Whilst WebOS looks like a great OS for mobile devices, the App Store wars going on right now with each phone OS fighting for developer attention is not a useful war to be late to join.
Putting WebOS in other places, much like Android appearing on tablets and TVs will create more differentiated devices. Printers, for example is something distinctly HP and certainly unique. It will be interesting to see what they come up with, let’s just hope it’s not a 600 MB printer driver.
I can already hear their death rattle with their net income of almost 10 Billion dollars last year which has been growing for the past 3 quarters despite the recession…
Seriously Kroc, as much as I like many of your articles but comments like this make the strong impression that you are living in a reality distortion field of your own.
A market with slowing growth, product saturation, terrifyingly low margins and being totally dependent on Microsoft and Windows is not a place to be resting your fortunes on. HP want more than to be the lackey that jumps when Microsoft say so.
HP’s PC business may be profitable, but like Microsoft’s stock over the last decade, there’s no growth and no future doing the same thing forever. HP want to be the next Apple and they will _never_ get there with Microsoft clinging to their ankles. This is why the Palm purchase has been such a big thing and caused airbourne seating devices within Microsoft.
Yeah, that shitty, terrible, consistent Microsoft stock. Probably one of the more sounder investments in the market is getting trashed why?
Your comment made me, curious, so I looked up 10 year stock performance for various tech companies (all data from Google Finance, rounded to the nearest percentage point as of 12:45 EST):
Motorola: -82%
Dell -69%
Cisco: -64%
Oracle: -43%
HP: -34%
Microsoft: -20%
Adobe: +1%
IBM: +17%
Google: +363% (Aug. 2004 – Present)
RIM: +524%
Apple: +1029%
So yes, I’d agree they’ve done a better job than numerous other tech companies, and worse than others, but at a -20% return over 10 years, I’d hardly want to label it a sound investment. Overall, it certainly has been a rough decade for stocks.
After the DotCom bubble burst one would think that people learned that performance at the stock market has not necessarily anything to do with the real performance of a company. But I guess the confidence in the infallibility of the markets is still strong with some people. I guess that’s in the end just another kind of reality distortion field, just a potentially far more damaging one.
this is for “lobal surgery”…
You did not do a good job of researching the stock prices. Like I said to Nelson on another reply, most of you do not know much about stocks, profits, and the market.
Just one example, HP.
On june 1, 2000, stock price was 18.46, today closed at 40.87. Do your own math and how can you come with -34% return.
You bought at 18.46 and if you were to sell today at 40.87 the “real” return my math challenged friend is:
+121% for the last ten years.
This is for “ecruz”…
The “HP” in my original post was for Hewlett-Packard, whose stock symbol is HPQ. I believe the data you quoted is for Helmerich & Payne, Inc, an oil and gas well drilling company, for which the stock symbol is HP. As I listed only tech companies, I assumed people would understand “HP” to mean Hewlett-Packard and not the stock symbol of a company in a completely non-relevant field.
Today Hewlett-Packard’s stock closed at $47.48, which is a far cry (-33%) from where it was 10 years ago, at $71.13.
Are there additional errors in my math that you would care to point out, or do you normally take to insulting others without inspecting your own work?
this is for “lobalsurgery”
My apologies…
Oh come on you can’t just look at stock price.
A company can have great products and an expanding market and yet still be unappealing to stock traders due to reasons like not being profitable enough in the short term.
There doesn’t even have to be a rational explanation. Plenty of stocks have risen and fallen based on hype, trends, global events that in no way affect the company, etc.
MSFT and HP stock are getting trashed Nelson, because 99% of the people that read OS News have never bought stocks or know anything about making money in the market. Plain and simple.
Even if you give them MSFT stock 20 years ago, their warped thinking would not accept the gift.
Procurve networking equipment and Services are profitable. Not necessarily other divisions.
HP is anything but an MS lackey. You’re forgetting they develop OpenVMS and HP-UX, and will ship laptops with FreeDOS installed. HP only cares about selling customers hardware and services.
HP wants to be IBM; they don’t care about Apple. Apple is a problem for MS and Dell. Apple doesn’t operate the #1 or #3 services company in the world, so HP doesn’t care.
When Hurd says Palm is dead and WebOS will get crammed into printers, that’s pretty much what’s going to happen. The iPaq is barely alive, and HP only keeps going because customers run MS Exchange on HP servers. It gives the sales reps one more things to throw into the sales pitch. WebOS and the Pre doesn’t fill that kind of niche. It’s just a bunch of awesome special effects to add to printer menus, and it’s full featured enough that they can push adds for HP products to it.
I was focusing entirely on the consumer desktop space. Everything else, yup, doing well. It‘s HP’s consumer space that needs a real injection and Palm/WebOS could be it.
Not to mention the fact that HP recently overtook IBM in the worldwide server market. HP is not hurting.
WebOS is not a printer OS. As a matter of fact, printers are such commodity itmes that I can’t imagine WebOS could add anything remotely useful to them without driving the cost of the device through the roof beyond what any normal consumer is willing to pay. The idea of WebOS for printers is just dumb.
WebOS is designed for smartphones. It would probably be a good fit for tablets, too, but that’s not what it was first and foremost designed for, and that’s not what Palm has in its DNA. If it wasn’t a smartphone OS that HP wanted, they should never have bought one.
Precisely. It’s right there in the name WebOS.
So, what do they expect us to do, browse the internet on their printers?
You know, I’ve been seeing lots of Sharp and Kyocera ads lately, touting support for things like email, and even local web services (intranet stuff). Many high-end printer + kitchen sink devices already have reasonably large color displays, real or on-screen keyboards, etc., and they already hook to networks.
I used to work at a place that had a few older HP and Xerox printers like that (obviously less fancy, due to age).
It may not get to your average $50 printer, but I don’t see how it is unreasonable to think of using networked software, with a business printer, or higher-end consumer all-in-one, having a GUI client.
You could even have an app for your cell phone that could pretty much be an equivalent to a remote desktop connection for it. More importantly, though, it can be basically the same across many devices.
While I think vertical market tablet, maybe POS boxes, and other SFF/embedded devices (which HP makes plenty of, you know), may be more at home with WebOS, don’t count out printers.
At the end of the day, though: as long as HP gets its focus back on service and R&D, and stays away from the low margin sales of everything under the sun with silicon in it big enough to carry an HP logo (the Fiorina era), I think it’ll work out.
Edited 2010-06-03 20:52 UTC
Amazing. Do they have glasses that will correct vision that near-sighted?
Maybe HP are planning to finally deliver on their “Cooltown” vision from 2001?
http://www.youtube.com/watch?v=cNbDj7OAbh0
From the video:
“It’s a vision of a world where everybody and everything is connected wirelessly through the World Wide Web; people, places and even objects have websites… people connect through a wide variety of smart, wireless information appliances…”
I don’t know whether it makes sense to drop Palm’s smartphone development (it certainly seems odd to me), but I can understand the point of adding proper (unified) OS support to all of their other appliances.
He didn’t dismiss the ideal of staying in the smartphone business either. I didn’t hear anything about taking apart Palm and ditching smartphones, his main focus was to put WebOS on other devices as well.
Thank you for posting this comment. Not once did the HP CEO mention Palm at all, and for all we know, Palm isn’t going anywhere. They still seem to be doing events, marketing, and hopefully releasing new phones. I’d put money on that Palm become what the Newton group were before Steve came back (Newton Inc.).
You might find that HP ditch the smartphone segment altogether, and leave it to Palm. Meanwhile, they leverage all the work done on WebOS and use it in their own devices. And hopefully provide some better hardware to Palm 😉
Uh, yes he did mention Palm, in the quote “We didn’t buy Palm…”
For all intensive purposes Palm *is* HP once the deal goes through. If he says “HP is not interested in…” you can be pretty sure that it applies to HP’s subdivisions too.
His main reason wasn’t to go into smartphones but to add webos to other items.
When I first heard this story I said it was a smart move because then they would have a complete application stack, from server to user. Having a smartphone division is just a bonus revenue for them. I do hope they keep up the smartphone business side.
Edited 2010-06-03 14:02 UTC
If I had HP Stock, I’d be selling now. That is the kind of language I would expect from a a guy starting up a E-business web-portal in 2001, who expects to make a mint in an IPO for his website that people will stay on because of the large number of ads on it, and the comic sans logo.
That is the kind of language I would expect from a a guy starting up a Social Network in 2006, who expects to make a mint in an IPO for his website that people will stay on because of the large number of users on it, and the Futura logo.
My language, or Mark Hurd’s language?
For the record, I would build an anti-social network, where users get points for being rude to each other, you can’t have friends, only enemies and you can only dislike statuses/comments/links that people have on their page. The system would regularly send messages on your behalf to other users, spreading gossip and innuendo from analysing your profile. If you didn’t accept an invitation to the site, a profile for you would be set up any-ways based on google search results about you.
Hurd’s.
We could call it “Usenet 2.0”.
Is that sentence English in the first place?
Would you really expect from someone whose name is “Hurd” to have some good business sense ?
…
…
Sorry…
How do they get there jobs?
Excellent question.
I’ve heard much about the good webOS and the Palm Pre. Searched for videos on Youtube and saw a dog slow Pre Plus booting in 2 minutes and XX seconds. Reaction? “Never, ever”.
I don’t see how they’ll manage to put it in printers. I already have a Deskjet F4580 wifi printer, which gets ready to print in a little more than 30 seconds… I know I would hate it if I had to do more than switch it on, print 3 or 4 pages, turn it off until the next time I need to print something. Which hasn’t happened in the past two months.