or Connect
AppleInsider › Forums › Mobile › iPad › HP outlines "difficult but necessary" decisions spurred by success of iPad
New Posts  All Forums:Forum Nav:

HP outlines "difficult but necessary" decisions spurred by success of iPad

post #1 of 83
Thread Starter 
After just nine months on the job, HP's chief executive Léo Apotheker announced plans to radically shift the company away from the shrinking PC market, drop its mobile competition to the iPad and iPhone entirely, and instead focus on its online services, printing and software businesses.

In the company's quarterly earnings conference call, Apotheker stated that after careful consideration about "what needs to be fixed, what needs to be shut down, and what needs to be separated," the company would begin an effort to shift priorities in multiple respects.

The first, affecting HP's PC and mobile hardware business, acknowledges a competitive landscape and changes in how consumers are using PCs, a clear nod to Apple's blockbuster iPad sales. Apotheker said HP's Personal System Group, which builds PCs, needed 'the flexibility and agility" to explore its options independently.

HP is now looking at a "range of options that include a spin-off" of the company's PC manufacturing business, which is expected to take 12-18 months to complete. Apotheker still described PSG as being a profitable business, however, noting $9.6 billion in revenues and profits of $569 million in the most recent quarter.

Asked about why HP wasn't announcing an immediate spinoff of its PSG unit, Apotheker stated that the company's board had so far only committed to "looking at all strategic options," and would continue to look at what it needed to do.

Asked about whether HP was still investigating the concept of putting webOS on its PCs as an alternative to Windows, Apotheker similarly described various options of using of webOS internally or licensing it to third parties as all being options on the table, but had no specific decisions to announce.

Just six months ago in February, PSG head Todd Bradley indicated during the company's webOS tablet event that HP's PCs would be a target for the new OS, saying, "Do the math on two PCs per second. You easily exceed 100 million devices with WebOS deployed annually. That's the start of something pretty big."

Out of TouchPad

However, the company presented a very dim view of its webOS-based mobile devices, including the TouchPad tablet and Pre smartphones. Due to market dynamics and intense competition, Apotheker said the company would be taking the "difficult but necessary decision to shut down WebOS hardware in Q4 2011."

Apotheker said HP is "tracking market opportunities," and exploring how best to use the webOS platform it acquired last year as part of its $1.2 billion purchase of Palm. Sales of TouchPad and webOS phones "did not meet milestones," and "would require significant investment over one to two years" to continue to develop, taking on increasing risk in a very competitive market.

HP said it would take a billion dollar restructuring charge to cover the costs of shutting down its fledgling webOS mobile devices business after determining that sales of the TouchPad were simply "not meeting our expectations" after the new hardware was "poorly received" by the market.



Focusing on software, services

The company is now "focused on transforming services," part of a "multiple quarter journey" to focus on delivering cloud solutions and "software accessible to any type of device," as well as existing printing hardware and software businesses. Apotheker also said HP would also be lowering its Q4 guidance "to be realistic about where we are."

In addition to issues related to its PC PSG business and WebOS hardware, Apotheker also described the company's squabble with Oracle, which has pulled support for Intel's Itanium processor from its database and ERP software. That decision hit HP hard, because it forces its customers with HP-UX Itanium-based servers to either buy new equipment to run Oracle's latest software, or to continue to use their existing software knowing that existing bugs won't be fixed.

Oracle, which recently acquired Sun, is now recommending its own Sun hardware, and claims that while HP tried to negotiate a contract with Oracle that would guarantee continued support for Itanium, Oracle never agreed to those terms. Further, Oracle says HP knew that Intel eventually planned to terminate its Itanium hardware platform, and that HP's lawsuit demanding that Oracle reverse its decision to support Itanium servers was "utterly malicious and meritless."
post #2 of 83
Somehow I think this "spin-off" will be less Frasier and more AfterM*A*S*H.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply
post #3 of 83
Palm couldn't hack it as Palm. Who on earth, why on earth, thought they could suddenly, magically, somehow hack it as 'HP'?

Just watch. GOOG-MMI will be a replay (in slow motion).
post #4 of 83
Please pardon the schadenfreude here, but having Jon Rubinstein fall on his ass just one more time thrills me to the core. To be sure, I sympathize with TouchPad purchasers and all those who fell for Rubinstein's bullcrap, but watching him eat another heaping helping of crow is most gratifying.
post #5 of 83
Quote:
Originally Posted by VinitaBoy View Post

Please pardon the schadenfreude here, but having Jon Rubinstein fall on his ass just one more time thrills me to the core. To be sure, I sympathize with TouchPad purchasers and all those who fell for Rubinstein's bullcrap, but watching him eat another heaping helping of crow is most gratifying.

Completely agree Hahahah
White Nexus 7 8GB
Black & Slate iPhone 5 32GB AT&T
Reply
White Nexus 7 8GB
Black & Slate iPhone 5 32GB AT&T
Reply
post #6 of 83
Quote:
Originally Posted by AppleInsider View Post

noting $9.6 million in revenues and profits of $569 million in the most recent quarter.

A little proof-reading please...
post #7 of 83
Quote:
Originally Posted by Tallest Skil View Post

Somehow I think this "spin-off" will be less Frasier and more AfterM*A*S*H.

You are absolutely correct, but I get no joy from it. HP is blowing away like a dandelion in the breeze and it is a sad sight to see. HP made the first calculator that I ever owned. HP was a major test equipment company. It was the place that Steve Jobs and Steve Wozniak got their starts. It was one of the companies that made Silicon Valley Silicon Valley.

HP, we hardly knew thee.
post #8 of 83
Quote:
Originally Posted by anantksundaram View Post

Palm couldn't hack it as Palm. Who on earth, why on earth, thought they could suddenly, magically, somehow hack it as 'HP'?

Just watch. GOOG-MMI will be a replay (in slow motion).

Would not be surprised to see GOOG make an attempt to buy HP's PC business. No more Windows on HP PC's. Make 'em all ChromeBooks !!

And, Larry Page can fancy himself as "Son of Steve." With the hope of outdoing Apple at Apple's game.
post #9 of 83
They should make webOS open-source... that would be the secret.
post #10 of 83
Quote:
Originally Posted by Mr. Me View Post

You are absolutely correct, but I get no joy from it. HP is blowing away like a dandelion in the breeze and it is a sad site to see. HP made the first calculator that I ever owned. HP was a major test equipment company. It was the place that Steve Jobs and Steve Wozniak got their starts. It was one of the companies that made Silicon Valley Silicon Valley.

HP, we hardly knew thee.

HP was a great company in its day. So were Digital Equipment, Polaroid, and Eastman Kodak. The world changes. Companies need to adapt and tackle the challenges with vision. Apple, of course, is a great example. But, IBM has done remarkably well, too.
post #11 of 83
Nicely done, DED. Much better than the last one. Keep it up!
post #12 of 83
Apple should make an offer for Palm's IP.
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #13 of 83
HP is smart to surrender from a position of weakness rather than wait until they reach a point of desperation. I'm sure kodak wishes it would have been this smart.
post #14 of 83
Quote:
HP outlines "difficult but necessary" decisions spurred by success of iPad

I'm confused. Where in this article (or the conference call notes) does HP CEO even talk at all about Apple, let alone the iPad?

This seems like a case of the title already being written, and formulating an article to fit that title.
post #15 of 83
Quote:
Originally Posted by hill60 View Post

Apple should make an offer for Palm's IP.

I think the current high valuation for patents is a big part of the reason HP is scrapping WebOS so quickly. They now know WebOS products are money losers and probably hope to get some of that original $1.2 billion Palm purchase back by selling the patents ASAP.

Please update the AppleInsider app to function in landscape mode.

Reply

Please update the AppleInsider app to function in landscape mode.

Reply
post #16 of 83
In other words, the game of commoditizing computer hardware has claimed another victim.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #17 of 83
I always liked HP printers. Software sucked though. I always thought they should get back to their core business and stop chasing everybody else's tail.
post #18 of 83
Quote:
Originally Posted by hill60 View Post

Apple should make an offer for Palm's IP.

It would probably be seen as anticompetitive. But it might be worth a shot.
post #19 of 83
Quote:
Originally Posted by jd_in_sb View Post

I think the current high valuation for patents is a big part of the reason HP is scrapping WebOS so quickly. They now know WebOS products are money losers and probably hope to get some of that original $1.2 billion Palm purchase back by selling the patents ASAP.

I wonder how much extra it would cost to have the patents tastefully presented on a platter bearing Jon Rubenstein's head.
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #20 of 83
Now if only Apple's other competitors would see the light we could rule the world! Mwah-ah-ahhhh.
A.k.a. AppleHead on other forums.
Reply
A.k.a. AppleHead on other forums.
Reply
post #21 of 83
Surprisingly there is a winner in all this: Palm stockholders. They cashed out on WebOS (to the order of $1.2 billion) before it was hit by the Apple & Android steamroller.

Please update the AppleInsider app to function in landscape mode.

Reply

Please update the AppleInsider app to function in landscape mode.

Reply
post #22 of 83
Quote:
Originally Posted by hill60 View Post

I wonder how much extra it would cost to have the patents tastefully presented on a platter bearing Jon Rubenstein's head.

With the current ethics of the U.S.'s corporate world, both successful and unsuccessful high level execs get paid about the same. You win just by playing the game. Whoo-hoo!
A.k.a. AppleHead on other forums.
Reply
A.k.a. AppleHead on other forums.
Reply
post #23 of 83
Quote:
Originally Posted by hill60 View Post

Apple should make an offer for Palm's IP.

I am certain that was what the Head of HP was trying to say without actually saying it...

Also it has been my experience that HP software is usually very poor quality.... I am not sure I would want to bet the company on it.....
post #24 of 83
Quote:
Originally Posted by Mazda 3s View Post

I'm confused. Where in this article (or the conference call notes) does HP CEO even talk at all about Apple, let alone the iPad?

This seems like a case of the title already being written, and formulating an article to fit that title.

Does the CEO of a failing venture need to spell it out? Anybody watching the industry can clearly see what's happening. Apple is cleaning house in the tablet and phone (to a lesser extent) businesses.
post #25 of 83
Quote:
Originally Posted by AppleLover2 View Post

Nicely done, DED. Much better than the last one. Keep it up!

Get on with your (passive-aggressive, with a fake name) life, instead of hoping for the best or blaming others: http://www.nytimes.com/aponline/2011...y.html?_r=1&hp
post #26 of 83
Quote:
Originally Posted by Mazda 3s View Post

I'm confused. Where in this article (or the conference call notes) does HP CEO even talk at all about Apple, let alone the iPad?

This seems like a case of the title already being written, and formulating an article to fit that title.

They said competition from tablets, which means Apple and the iPad. You think they were talking about competition from the Galaxy Tab?
post #27 of 83
HP sounds like they completely lost their direction and ability to innovate across any of their products. I know on the software side and technical support they are not doing so well there either so good luck with your new path HP. You'll need it!
post #28 of 83
Quote:
Originally Posted by jd_in_sb View Post

I think the current high valuation for patents is a big part of the reason HP is scrapping WebOS so quickly. They now know WebOS products are money losers and probably hope to get some of that original $1.2 billion Palm purchase back by selling the patents ASAP.

Some of it? The amount patents are selling for now, HP could even turn in a profit.

Web OS was never going to work for HP. WebOS is decent, but was too late to market. It failed in Palm's time because the momentum of support amongst developers wasn't there. Even those developers who had supported the classic Palm OS for years were deserting it, and switching to iOS and Android. HP was never going to be able to do any better, because the clock had ticked on further.

This is sad in a way. I don't think it's good for Apple, who would compete better in a fragmented market than against a single competitive platform supported by numerous hardware vendors. And imo WebOS was the best of the rest. Had it had the apps it would have been a more worthy competitor than Android.
post #29 of 83
in my opinion you hire a bunch of hacks that have more expertise in corporate mergers and spin offs than in engineering and science. hp was infamous for bleeding edge electrical engineering and technological advances. When they spun off Agilent and became just a computer company , they sold off the very core of hp that made the brand famous, the stuff that creates new products and new markets. I'm sure the quarterly earnings boost resulted in juicy over bonuses for those who crafted it, those who brokered the shares, and those who received the commissions, special cash out transactions and origination fees...... Alas like any bell curve would tell you, the PC business and by extension the wireless still borns that link their existence to the PC experience, these tablets will all eventually end up on internet auction sites or crated up and donated to some charitable cause somewhere on the planet. Doubling down on that strategy by trying to buy back intellectual property and innovation [tied to a losing paradigm] is a recipe for failure. Innovation in engineering is only grown organically, takes years to develop, and takes leadership and vision. It burns tons of cash, but what everyone loses site of, the R&D pays off in new markets and products in spades. hp would have better spent the money buying back Agilent. In my opinion the prognosis for Google and Motorola Mobile is no better. Its like watching the fate of Humpty Dumpty on the operating table.

Apple has grown organically, fosters innovation, and is smiling all the way to the top. LOL

Signed,
A converted former PC believer...LOL...
post #30 of 83
Palm has a ton of patents almost elusively in the PDA & smartphone realm including this doozy: "Integrated handheld computing and telephony system and services"

Please update the AppleInsider app to function in landscape mode.

Reply

Please update the AppleInsider app to function in landscape mode.

Reply
post #31 of 83
Palms Patents [Web OS] are no better than the patent on the Buggy Whip. Both are out moded.
post #32 of 83
Quote:
Originally Posted by lales View Post

A little proof-reading please...

He fixed it, but my experience having read AI for a long time is that this author doesn't proofread very well, and it appears no one at AI does it for him. His record is 5 typos in one article! Otherwise, a lot of the writing is good.
post #33 of 83
Quote:
Originally Posted by Mazda 3s View Post

I'm confused. Where in this article (or the conference call notes) does HP CEO even talk at all about Apple, let alone the iPad?

This seems like a case of the title already being written, and formulating an article to fit that title.

emphasis mine.

See the Author slug? That's how 100% of his 'articles' are written.
post #34 of 83
Um, apparently you guys were reading a different article than I was.

1) HP still turns a very substantial profit. Even their home computing arm turned a tidy profit of $550m+ according to the article. The only issue was the profit margin. So HP is spinning it off. That simply means, essentially, that they are separating it from the HP mothership and setting it up as a separate entity. this is usually done to make a sale of the company easier. No one is going bankrupt. The computer production operation will, however, probably be sold in the next year or two.

2) HP's Business operations are highly profitable. That is why HP is refocusing on business operations (and printer production).

3) The touchpad was a flop. That is undisputed. So the HP is pulling the plub on webOS entirely. That doesn't mean that the whole company is exploding. It means that they are cutting their losses, and that they may deem other parts of their Palm acquisition as being more readily profitable if simply sold off.
post #35 of 83
We will let the hp share price price tell the story. Over time....
post #36 of 83
Quote:
Originally Posted by SchnellFowVay View Post

3) The touchpad was a flop. That is undisputed. So the HP is pulling the plub on webOS entirely. That doesn't mean that the whole company is exploding. It means that they are cutting their losses, and that they may deem other parts of their Palm acquisition as being more readily profitable if simply sold off.

WebOS was doomed from the start IMO. not that it wasn't an interesting (or even great) OS, it was. but first they launched it on Sprint exclusively, with one of the WORST advertising campaigns in recent memory past the local car dealer ones. They also waited a really long time before releasing it to the public and pushed it out on woefully underpowered (for the OS) hardware that was cheap to boot. The phones were also SMALL, which didn't help.

And then they launched on ATT/Verizon with another horrible campaign. And announced the pre2 soon after this launch, which killed their own sales. And then they announced the touchpad/pre3 and said NONE of the old phones would get the updated OS.

Fast forward several months and the first webos3 phone that came out was the Veer, which again features inferior hardware and was just tiny. The touchpad came out weeks later, but the OS wasn't baked fully yet and there wasn't a lot you could do with it (even though the core OS is apparently amazing) The Pre3, the "awesome phone" that would integrate with the touchpad isn't even out yet. and both of these (AGAIN!) had lackluster hardware. I'm not talking about having "OMG specs" I'm talking simple things like build quality, screen resolution, and the ability to handle the OS without grinding to a halt.

Yes, the touchpad was a flop, but a lot of the blame for that can be placed on Palm/HP
post #37 of 83
They also cannot compete with producing modern computers.

HP PC bites the dust.

Dell next. Then Microsoft.
Apple used to be the most expensive (Wives Tail).
Now they are the least expensive. The computer builders simply cannot build clones of Apple at a cheaper cost.
It is all Technology
Apple first bought LCD technology eight years ago.
Since then they have invested in:
1) Super strength aluminum metals.
2) One piece aluminum milling machines.
3) Form fitting layered batteries.
4) Low power multi-thread processor chips.
5) Hardware and software optimized architectures.
Whether iPads or computers the costs for the same features cannot be beat even with zero margins by the rush to the bottom competitors.
Plug and play parts in plastic ugly containers simply will not sell.
Microsoft will be next.
Microsoft is stopping support for Windows XP so that corporations (50 percent of who still use the old computers) will be forced to buy new computers.
Sorry, at least half of them will buy the new better and lower cost Apple computers.
All the creative companies already do.
Just Saying
post #38 of 83
Quote:
Originally Posted by starwarrior View Post

Microsoft is stopping support for Windows XP so that corporations (50 percent of who still use the old computers) will be forced to buy new computers.

No, they're doing it because it's a DECADE OLD and NO ONE should be using decade-old software.

I have cousins who haven't been around as long as XP has, for heaven's sake.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply
post #39 of 83
LOL!!!
Now wait until the rest of these fools in the pc world fall into obscurity.Apple had it right all along and the proof is in the declining pc paradigm.
I wonder what Jon Rubinstein is doing right now.
Probably putting red lip stick and a blond wig on that remington 22 gauge shot gun.
post #40 of 83
Quote:
Originally Posted by anantksundaram View Post

Get on with your (passive-aggressive, with a fake name) life, instead of hoping for the best or blaming others: http://www.nytimes.com/aponline/2011...y.html?_r=1&hp

I try to give credit where it is due, and I get insulted. Seemingly, no good deed goes unpunished.

And how am I either hoping for the best or blaming anybody for anything? And what does the NYT article have to do with anything?

This?

" In an interview, HP CEO Leo Apotheker said the company was disappointed more with the hardware sales than the performance of the webOS software, which it will try to keep alive in some way. HP is studying its options, which could include licensing the software to handset makers or allowing them to use it for free as open-source software, as Google does with Android."

WTF? Are you just trolling me?
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPad
  • HP outlines "difficult but necessary" decisions spurred by success of iPad
AppleInsider › Forums › Mobile › iPad › HP outlines "difficult but necessary" decisions spurred by success of iPad