HP Decision to Bury TouchPad: A Grave Error?

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Oh HP TouchPad, we hardly knew ye.

Seriously. You were only on the market a month and a half before getting the cold, quick, and calculated axe along with the rest of HP’s webOS hardware division. And make no mistake, the decision to effectively kill Palm and webOS as we know them was cold. The news came as two sentences, buried in a quarterly earnings report press release:

HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.

A conference call with investors helped shed some light on the decision, revealing the it all came down to the fact that the TouchPad and webOS smartphones didn’t sell well. HP CEO Léo Apotheker claimed, “our webOS devices have not gained enough traction in the marketplace with consumers and we see too long a ramp up in the market share.”

Not Fast Enough
Apotheker also hinted that HP wasn’t committed to competing in the rapidly changing mobile market with the market’s extremely fast paced product development cycles.

“Due to market dynamics, significant competition and a rapidly changing environment and this week’s news only reiterates the speed and nature of this change, continuing to execute our current device approach in this market space is no longer in the best interest of HP and HP’s shareholders,” Apotheker added.

HP TouchPadThose who have followed HP since the Palm and webOS acquisition last April aren’t surprised to hear HP’s CEO claim that the company’s “current device approach” didn’t match the demands of the mobile industry’s “rapidly changing environment.” The TouchPad perfectly exemplifies this.

When it was announced in February, the TouchPad hardware met the industry standard. Design-wise, it compared favorably against the 7-inch Galaxy Tab and original iPad. It had a dual-core processor, just like the crop of Honeycomb tablets announced at CES the month before.

But something happened between February and the TouchPad launch in July. Tablets got thinner, or at least one important tablet got thinner. When Apple announced and released the iPad 2 in March, it was the thinnest and slickest tablet available. It completely zapped the buzz from the then recently released Xoom, and sent Samsung into panic mode. Samsung had just unveiled its Galaxy Tab 10.1 at Mobile World Congress, but after seeing the iPad 2, Samsung decided to dramatically redesign its Honeycomb slate, ultimately thinning it out to match the iPad 2 in slimness. 

HP did not do the same, and the tablet it released July 1 looked bloated by comparison. It was thick and slippery, thanks to its sheer plastic back panel. The screen was also dim by comparison to the iPad 2 and Galax Tab 10.1.

Compared side by side with the Galaxy Tab 10.1 and iPad 2, and there was no reason for consumers to buy the TouchPad, especially considering it had the same launch price as the other two tablets.

The situation takes me back to a conversation I had with another TechnologyGuide editor right around the time of HP’s Palm acquisition. He stated that HP does not have a reputation for innovative or slick hardware, the company specializes in printers and the enterprise after all. He added, unless HP adapts to the mobile market, it’ll get burned. 

HP did not adapt, and he was proven right.

So What’s Next?
Judging by the statements made during the earnings report conference call, it seems HP remains committed to developing the webOS software and may be looking to license it to other companies.

“We are looking at all of our strategic options regarding the software,” Apotheker said on the call. “The software has been received very well, everyone likes it. We will be looking at all possible business models, from licensing to any other possibility, to look at how to extract value from webOS,” he added.

webOSSpeculation suggests HTC or Samsung, two of Google’s Android partners, might look to webOS for future handsets and pony up the licensing fee. The two, along with a handful of other Android partners, might be feeling skittish following Google’s purchase of Motorola Mobility. Despite public statements to the contrary, they may fear Google will favor Motorola in Android smartphone and tablet development. But I don’t know if any of Google’s partners are all that concerned, or at least concerned enough to ditch Android for webOS.

First of all, Android’s strength is in its partners, and its number of partners. No one Android smartphone outsells the iPhone, but collectively, Android is the number one operating system in the US. Google hopes Android can do the same in tablets. That’s why Google will go to great lengths to assuage any fears of Motorola favoritism its other partners may have. Also, Android is free, it has proven successful, and it has a much bigger developer base than webOS. Why would HTC or Samsung pay for webOS, which while reputable, has never proven itself in the market and lack apps?

If HP does license webOS, it’s likely to be to industries not typically associated with mobile operating systems, like automotive and appliance. I think it’s more likely we’ll see a webOS-powered refrigerator than a webOS Samsung Galaxy smartphone.

What About TouchPad Owners?
HP has yet to comment on what, if anything, it will do for disgruntled TouchPad owners, especially those that purchased the device before the major price drops. While HP claims to remain committed to the operating system, updates probably won’t come as feverishly as they would have otherwise, and app developers will abandon the platform for the greener pastures of iOS and Android.

HP owes them at least a little something. After all, a mobile device purchase is an informal agreement of sorts. It’s an investment in the future of the product, with the implied guarantee the device will improve with new apps and system updates until such time as the hardware can no longer support the demands of the ever-advancing software.

HP is the largest notebook maker in the world. It has the resources to make things right, and it should. It’s tough to say the company gave the webOS tablet ecosystem a fair go at the market after it pulled the TouchPad a month and a half after launch.

It’s also unlikely we’ll ever see the TouchPad 4G or 64GB TouchPad recently revealed in France. Also, the seven-inch TouchPad will probably turn into vaporware. 

TabletPCReview’s Jen Edwards wrote in her TouchPad review: “I think it’s just a matter of time before the tablet version of webOS becomes a true competitor that is able to go toe-to-toe with iOS and Android.” She added, “If HP smoothes out the rough edges, the TouchPad can become a true heavyweight in the field.”

It’s a shame we’ll probably never know if webOS could have competed, given time and some smoothed out edges. 

But on the plus side, TouchPads will be cheap now, if you don’t have a problem figuratively robbing the webOS grave.

 

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