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Will There Be Life After HP for WebOS?

By Richard Adhikari
Aug 19, 2011 5:00 AM PT

HP on Thursday shook the mobile devices world in announcing that it's killing off its webOS-powered smartphones and TouchPad tablet line.

Will There Be Life After HP for WebOS?

The TouchPad reportedly suffered poor sales in its short few weeks on the market, and little has been heard about HP's Palm Pre family of smartphones.

HP said it'll continue to explore options to optimize the value of webOS software going forward.

"They're just trying to say they're looking for somebody to buy webOS," Carl Howe, director of anywhere consumer research at the Yankee Group, told TechNewsWorld.

Will HP succeed? After all, webOS has been limping along for years, first at Palm, where it was developed, and then at HP, which got the OS when it purchased Palm in 2010.

HP did not respond to requests for comment by press time.

HP's Global Plans for webOS

HP bought Palm back in April 2010 to get into the mobile market.

The acquisition would be a transformational deal in the connected mobility market, said Todd Bradley, executive vice president of HP's personal systems group. HP would invest heavily in product development.

That connected market extends from mobile devices to netbooks and laptops, and it incorporates the cloud. It's the same connected market Apple is tackling with iOS and iCloud.

HP showed few outward signs in recent months that it was losing faith in the plan that led it to buy Palm. HP CEO and President Leo Apotheker reiterated the vision of a seamless, secure, context-aware, connected world in his keynote speech at an HP strategy summit in March, and again at the AllThingsD conference in June.

What happened? What led HP to scuttle its vision after splurging $1.2 billion on Palm? Can it recoup its costs?

Suffering From the Mobile Market Squeeze

Perhaps HP was too late after Apple had already established a powerful lead with the iPhone. Maybe HP was also heartened by the progress of Android, which made significant gains within a year of its launch and is now nipping hard at Apple's heels.

Android took 20 percent of the media tablet market from iPad in the last year, ABI Research found.

However, unlike Android, which is licensed to anyone who wants to use it to power their mobile devices, webOS is, like Apple's iOS, a closed system.

When your business model is similar to the market leader's, you'd better hope for two things: That the market leader is somnolent enough to let you catch up to it, and that your marketing and distribution skills are better.

However, Apple has constantly innovated in the product field, and its marketing and distribution are widely recognized as second to none.

webOS Device Woes

The news of HP's webOS device shutdown came the day after its latest webOS phone, the Palm 3, went on sale in Europe.

Meanwhile, sales of the TouchPad have been so bad that U.S. retailer Best Buy, at least, is reportedly pressuring HP to take back its piles of excess inventory. HP was forced to slash TouchPad prices three times recently after having put the device on retailers' shelves only last July.

HP needed the time to mature webOS and its devices, Richard Shim, a senior analyst at DisplaySearch, told TechNewsWorld. Further, HP had to learn a whole new set of skills -- create a healthy app developer community, help devs create good apps, sell the product and differentiate it from others.

But the fast-moving mobile device market is unforgiving, and HP couldn't get the time it needed to catch up.

HP's having a strong presence in the corporate market didn't help because it lacked apps.

"If you can't tell the CIO, the CEO, the VP of IT that your product has the apps they need for their tablet, you won't get any traction," Laura DiDio, principal at ITIC, told TechNewsWorld.

Possible Alternatives for webOS

There are other areas where webOS might fit, such as embedded systems, such as those in smart appliances, or in telematics -- telecommunication devices in automobiles such as GPS and automotive navigation systems.

That's the area HP's Bradley and Apotheker are possibly eying.

However, it's not clear whether HP can penetrate those markets.

"[Succeeding in the embedded systems market] would be a stretch, although HP's history in industrial measurement equipment may offer them some ins there," said Charles King, principal analyst at Pund-IT.

"The embedded OS space is extremely crowded," King told TechNewsWorld. "But the biggest challenge for HP there would be to convince developers that webOS has a chance. That seems like a tall order."

A Two-Time Loser?

If HP puts webOS up for sale, will it get any takers? That depends on whom you talk to.

\u201cWebOS has had a couple of owners now, and I'm not optimistic," the Yankee Group's Howe pointed out. "It may be the operating system nobody wants."

That may be too gloomy a view to take, especially in light of Google's recent purchase of Motorola.

"There are a lot of people willing to buy webOS so they can stay in the mobile business in the wake of Google's purchase of Motorola," Rob Enderle, principal analyst at the Enderle Group, told TechNewsWorld.

That purchase is driving the mobile device market toward a vertically integrated model, Enderle said.

"There will be three players left. Apple and Google-Motorola are the first two, and whoever wants to be the third one may be looking at webOS," Enderle speculated.

"HTC is probably the hungriest, but there's also Samsung and LG," Enderle stated. "They all have the money and resources to buy webOS."

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