Computer Services News: HP has decided to move into a different direction, causing quite a stir in the technology community. HP announced last week that they are ending their development of WebOS, a phone/tablet OS developed by Palm, who HP had acquired last year. This was a shock as HP had put a lot of emphasis that this was the software they were going to use going forward; even going as far as saying it would be on all their PCs, laptops, and printers. But with extremely lackluster sales and having lost the market share that Palm had built before the acquisition due to long development times, HP had decided to axe the entire operation. It was rumored that Best Buy had sold only about 20,000 of the 270,000 tablet PCs they had originally bought, and wanted to return the rest, after these reports had surfaced it seems HP decided to stop supporting the platform and said little about its future, besides saying they were open to the idea of licensing the OS to other companies if interested.
This shock was compounded by the fact that HP had stated they had found a possible buyer for their PC division, which they have wanted to sell off due to low margins. This move was done previously by IBM who sold off their consumer laptop/pc division to Lenovo in order to focus on higher margin things in the server market. The final shocker HP gave the community was after all this they announced they are buying a software company for 10 billion dollars, saying that software would be HP’s new corporate focus going forth. These 3 actions left investors uncertain on HP’s future and left their stock to drop 20% in one day.
Even with HP selling off their PC division, and basically taking the loss for their 2 billion dollar Palm investment, they still have their Server division, and their very successful printer division. While it’s tough to see HP as a software focused company, many peoples doubts seem to come from how poorly they were able to utilize WebOS which at the moment seems like a 2 billion dollar mistake.