Making Sense of HP's Mobile Mess

11:45 AM -- For a few months there, HP Inc. (NYSE: HPQ) grew fond of saying that it really is never too late to enter a market, provided you can bring some product or experience that no one has seen before. I wonder now if even they believed what they were saying.

It's a shame HP is backing away from tablets because I think tablets are the future of personal and mobile computing. Every cloud-based trend you can find supports the continued market saturation of these lighter, connected, mobile devices with crisp displays. If only HP would hang in there and have any success at all, it could help erase the baggage of at least two household names that became roadkill in the mobile phone market. (See HP Shuts Down WebOS Device Biz and HP: Tablet Effect Is Real.)

HP's Mobile Messes
First, take Palm Inc. , which HP bought last year. In the U.S., Pyramid Research figures indicate that 21 percent of the smartphones sold in 2006 were made by Palm. At the end of 2009 that figure had fallen to 3 percent. You have to really get up early every day to lose that much market share that quickly.

Let's look at another mobile device disaster -- HP itself. Looking at HP's enterprise handset business is one of the only ways you can get a look at any activity related to mobility in that sprawling, mysterious company. HP's sales of handsets to enterprises fell by US$273 million from 2008 to 2010. That's not a huge amount to a big firm like HP, but leaving that much cash on the table in a white-hot growth market shows that somewhere along the way HP stopped caring.

Both Palm and HP executives, at one time, knew what it took to build devices that consumers actually wanted. Now it seems the opposite is true and HP is considering becoming an enterprise and communications specialist.

HP: The New Sun?
Remember what Sun Microsystems Inc. felt like right before it was bought? Everyone knew they were Sun. They were a Silicon Valley legend. But I'll be damned if I knew three people anywhere outside the Valley who could tell me how they made money. HP is drifting into that Sun-like state of being best known for having once been good at something. (See Show & Tell: HP's Research Roots.)

And, weirdly, now that HP has become harder than ever to figure out, I've never been more interested.

— Phil Harvey, Editor-in-Chief, Light Reading

sarahthomas1011 12/5/2012 | 4:55:49 PM
re: Making Sense of HP's Mobile Mess

It may never be too late to enter a market, but you have to try whenever you do enter. I feel like HP never really gave it a real go. It only had Palm 16 months and the TouchPad lasted 49 days before it said, "welp, this isn't working." It's pretty sad.

DCITDave 12/5/2012 | 4:55:48 PM
re: Making Sense of HP's Mobile Mess


I'm going to use that today.

sarahthomas1011 12/5/2012 | 4:55:48 PM
re: Making Sense of HP's Mobile Mess

"womp womp" is another good word...in general and to describe HP.

DCITDave 12/5/2012 | 4:55:47 PM
re: Making Sense of HP's Mobile Mess

You're like a one-woman urban dictionary. Can't wait to write my Leading Lights speech.

paolo.franzoi 12/5/2012 | 4:55:47 PM
re: Making Sense of HP's Mobile Mess


Well, Sun at one time made money on servers.  Remember the .com bubble (not the telecom one that blew up shortly afterwards)?  Lots of those companies bought a bunch of Sun Hardware to build their computing centers.  Poof they go boom.  Tons of hardware entered the grey market.  Why buy a brand new Sun system when you could buy "used" Sun systems that had never even been unboxed for 10 cents on the dollar.

HP had a different problem.  It was a tech giant with lots of R&D.  It built test systems, RF components, printers, ya da ya da ya da.  It quit being that HP a LONG time ago.  Sun never stopped being Sun.  That HP is really Agilent.  The HP that is left tried to become Compaq or Dell but still do lots of cool R&D to make its products premium.

My view is that just doesn't work.  You are either Dell or you are not Dell (by this I mean in business model).  If you are going to build commodities, then this idea of R&D has to go away.  You guys notice that Dell really doesn't try to compete with Apple?  Both of them know what they are and don't try to be the other.  HP tried to be both and is therefore neither.

So, do I think this signals a buy of HP?  No, but they do have some splainin' to do (Lucy!).  How are they growing the business?  If they are backing away from computing, what the heck are they?



will.smith2 12/5/2012 | 4:55:46 PM
re: Making Sense of HP's Mobile Mess

During that same Telecom bubble, HP also made a lot of money on servers.  They were the defacto Windows platform for the majority of Telecom companies, while Sun had cornered the Unix server needs.  Thus Dell's effort (and ultimate success) with breaking into the ultra thin enterprise server space with 1U units when HP's were still 2U.  Rackspace real estate is still expensive (virtual servers, anyone?), and that hit at just the right time to start chipping away at HP's grip on the Windows server market. 

DCITDave 12/5/2012 | 4:55:46 PM
re: Making Sense of HP's Mobile Mess

Maybe they become a more focused competitor in IT services and leave the consumer stuff to the Chinese, leave snapfish and magcloud to some Amazon.com-like company and generally get out of the consumer markets where they don't have, as you noted with Dell, a defined corporate identity.

comtech3 12/5/2012 | 4:55:31 PM
re: Making Sense of HP's Mobile Mess

Please forgive the many typos in my first response.

comtech3 12/5/2012 | 4:55:31 PM
re: Making Sense of HP's Mobile Mess

I feel the same way too. I think HP could maintain their dominance in the PC space,but for some strange reason has decided to place themselves in some kind of self imposed exile.Just think about this for a moment.OSX GUI is based on Darwin,but its unlying OS is UNIX, a very powerful OS indeed that can be considered to be the "elder stateman " of all OSes!. WebOS, is also a UNIX offshoot.Can you see where I am going with this? If a company like Apple, who has approximately 3% of the PC market and with the highest prices for its products in the industry, is the #1 technology company in the US, is telling us something about HP.Bear in mind that HP has been around much longer that Apple has,and yes, the later has had its fair share of transitional turmoil in the past.

It is a shame that HP's management of suddenly become myopic and a scary cat in one fell swoop because the company real does make good products.A good example for me is their PC monitors that dispplays the same picture quality as that of those made by Apple.Their printers ar par excellence'. In fact, they're the best! 

HP has the ability to take over the lead from Apple, or at lease, compete with them toe2toe,but chose to take the cowardice options.Come on HP, gets some guts and use the power of UNIX, or WebOS  to its fullest.If Apple can do it with less history behind them that you, sure as hell, HP can.

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