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HP: Tablet Effect Is Real

7:45 PM -- HP Inc. (NYSE: HPQ) has fallen victim to what CEO Leo Apotheker called "the tablet effect." Explained one way, it is what happens when everyone makes a solid, successful tablet except for you. (See HP Shuts Down WebOS Device Biz.)

How Apotheker meant it, however, is that the growth of (again, other people's) tablets has hurt its PC business to the point that it is evaluating what to do with its Personal Systems Group (PSG), made up of PCs, smartphones and tablets.

"The tablet effect is real," Apotheker said Thursday on the company's third-quarter earnings call. The nature and speed of the devices industry was too much for HP to handle, and he admitted HP's ramp-up times were too long.

HP's try at a tablet, the TouchPad, debuted on July 1, but sales didn't meet expectations, despite strong reviews for the device's software. Unable to compete at price parity with most models on the market, HP lowered the TouchPad's price by $100, causing the company to take a loss. (See HP TouchPad Success Hangs on Apps.)

Now HP is exploring all its options for both the PSG and its webOS business, hoping the software will impress other companies, even if the hardware couldn't. It might be a tough sell, but Apotheker stressed that HP is really open to any avenue it can pursue.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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