HP dropped some bombshells yesterday, not least of which was its announcement that it’s abandoning all webOS hardware. That means no more TouchPad and no more phones. That leaves celebrity endorser’s Lea Michele, Russell Brand, and Manny Pacquaio out of a job (endorsing tablets. Other than that, I hear they’re all doing quite well for themselves). But where does that leave HP employees?
Evidently, HP held a special all-hands meeting Thursday evening to reassure employees in the webOS Global Business Unit that HP is NOT dropping webOS altogether, according to an insider account. WebOS VP Stephen DeWitt was said to insist repeatedly that “We are not walking away from webOS,” and suggested that HP may look into licensing webOS instead.
The problem is that until now, webOS has operated on Qualcomm chipsets, which could pose a problem in trying to license it to HTC or Samsung. Many potential licensees, said HP VP Todd Bradley, would likely prefer to see webOS support other chipsets, but he didn’t go into detail on who those potential licensing partners could be.
The news echoes CEO Leo Apotheker’s claim during Thursday’s earnings call that “we know that many developers feel the operating system is elegantly designed and is a respected platform,” which is why HP is going to keep the software and potentially license it. It’s just the hardware that has to go.
“About a year ago we made a bet on webOS,” said HP CFO Cathie Lesjak during yesterday’s call. “We set clear metrics and milestones.” But, she added, HP has failed to meet those financial goals.
Interestingly, during yesterday’s earnings call, Lesjak revealed that HP’s “intention was to solidify webOS as the clear number 2 platform for tablet.” It wasn’t aiming to eclipse Apple, but to be the next-best thing. “It quickly became clear that pricing parity would not generate demand and we subsequently lowered TouchPad pricing by $100,” Lesjak added. But it soon became clear that if the company kept trying to raise webOS out of the trenches, it was just going to incur an even bigger loss.
The HP execs broke the bad news to employees in yesterday’s all-hands meeting that there will, indeed, be staff reductions. In all, what it comes down to is the fact that HP needs to stop “trying to force non-competitive products into the market,” said Bradley and DeWitt.
