Thursday, August 18, 2011

HP is getting out of the computer business?


HP's strategic shift away from TouchPad; PCs, too?
If there's a notch on the technology timeline demarcating the PC and post-PC eras, we might have just crossed it.

Hewlett-Packard on Thursday effectively announced it was done with the personal computer, extending a crazy week in tech news that saw Google double down on mobile devices with its enormous bid for a Motorola division.

HP, a storied brand that was instrumental in expanding the PC industry, announced that its board had authorized exploring "strategic alternatives" for its computer division. That's corporate speak for a sale or spin-off.

The Palo Alto tech giant and the industry as a whole have seen a drop-off in laptop and desktop sales and margins, as consumers shift to tablets and smart phones.

And yet ... HP also announced plans to discontinue the phones and tablets based on the operating system it acquired through its now clearly ill-fated $1.2 billion purchase of Palm last year. That means it's pulling the plug on its highly promoted TouchPad tablet, less than two months after it hit the market.

The news underscores two critical points about the state of the technology industry:

First, we're rapidly moving into a world where consumer demand for mobile devices is outstripping that for PCs, dampening business prospects for the sector.

Think about it this way: HP, the largest PC manufacturer, a company whose Silicon Valley history predates the personal computer itself, is effectively saying there isn't enough upside to bother staying in the game.

"The increasing momentum of the media tablet market, led by the iPad, is creating a difficult environment for the PC industry," said Matthew Wilkins, principal analyst at research firm IHS iSuppli, in a recent report.

Second, even companies trying to embrace the post-PC world are struggling to get their arms around it as Apple crowds them out. A year and a half after the Cupertino company introduced its breakthrough iPad, not a single serious rival has emerged. The industry blog All Things D reported this week that Best Buy has sold only 25,000 HP TouchPads, less than 10 percent of the supply sitting in warehouses. That compares with more than 9 million iPads sold in the last quarter.

It seems even heavyweight contenders like HP can drop big dollars without making so much as a dent.

Consumer impact

For consumers, these trends are a mixed bag. They'll likely see falling prices for PCs, but it means yet another business has failed to gain strength in mobile computing. Less competition invariably means fewer options in the market and more pricing power for leaders like Apple. [...]

IBM has also gotten out of the hardware business, and is now focusing on software and services. Now HP. Who next... Dell?

I'd hate to see everything go "Apple", because Apple is IMO overpriced and overrated. And without healthy competition, it's likely to become even more so. I'd never want to be locked into their proprietary stuff. Thank goodness they are getting competition from Qualcomm/Android.

Also see: HP shakeup - buying Autonomy, dropping webOS
I think webOS was supposed to be HP's version of Linux. What a short life it had.

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