After spending $1.8 billion in Palm acquisition and development two years ago, HP decided to scrap its webOS prompting also to stop the production of HP smartphones and Touchpad.
However, HP recently relaunched its webOS, boosting its new features and capabilities, powering up the latest product, the Touchpad.
What went wrong?
I think the WebOS relaunch is a make or break. And webOS didn’t make it, Apple iOS and Google Android are both dominating and according to HP’s CEO Leo Apotheker: “Sales of webOS smartphones and tablets have not been gaining traction in the fast-moving and complex consumer market.”
He also mentioned that sales of the TouchPad are not meeting their expectations.
What will happen now?
Well, we will definitely missed HP smartphone devices and would no longer see the development of its Touchpad. HP is now positioning itself as an information management company. HP said that it will acquire Autonomy for $42 a share in cash, or $10 billion.
Apotheker said that the acquisition of Autonomy represents a shift into higher margin businesses.
Autonomy represents an opportunity for HP for us to accelerate our vision to decisively and profitably lead a larger win space which is the enterprise information management space. –CEO Apotheker
Will HP also leave the PC manufacturing business?
The decision to acquire Autonomy marks a change of path for HP and will definitely deliver huge changes on the company, the very similar move can be compared to its previous rival IBM. IBM is also a dominant PC manufacturer during 80s and sold its PC business in 2004 to focus on software and services.
A message from HP CEO Leo Apotheker:
“Transformation can involve difficult decisions, but we take these steps to better position for the future. These challenges and the transformation we are undertaking will take several quarters to fully resolve. I don’t take this action lightly. I know our investors don’t like being in this position and neither do I. I feel that as CEO I believe in transparency about what we are facing and be clear under the size of things we are doing now about it. To conclude, I’m taking ownership for these decisions and investments with a focus on driving actions that deliver value for shareholders as we shape the new HP.”