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HP's tablet exit no signal of iPad immunity, say analysts

12:46 PM

Computerworld - Hewlett-Packard's departure from the tablet business does not mean that Apple's iPad will remain the undisputed king, analysts said today.

"WebOS was never going to be an iPad killer," said Ezra Gottheil, an analyst with Technology Business Research. "It did have a chance at the enterprise market, but it was never going to challenge the iPad's very strong position in the consumer tablet space."

On Thursday, HP announced that it would stop making tablets and smartphones powered by webOS, the operating system it acquired when it bought Palm last year for $1.2 billion. The move -- just weeks after HP started selling its TouchPad tablet -- caught most analysts by surprise.

But it's not a signal that Apple will retain its current position as the leading tablet seller: HP's webOS was simply too small a player -- and likely to remain so -- to affect Apple.

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"They were the fourth horse in a three-horse race," said Gottheil, referring to Google and its Android operating system, Apple with iOS and Microsoft with its next iteration of Windows, Windows 8.

Chris Connery, an analyst with DisplaySearch, sees the tablet race as even tighter, one between Google and Apple with Microsoft's ability to join the fight still unproven. "Tablets are a two-OS space right now," said Connery. "HP came to the conclusion quite quickly that there wasn't room for three."

Both Gottheil and Connery said that HP's euthanasia of webOS tablets is not a signal that precludes others, especially Google, from challenging or even surpassing Apple.

"There are things Apple just won't do," said Gottheil. "It won't create as wide an array of [tablet] form factors as will Android tablet makers. And it won't compete on the very low end, simply because of [compromises] it won't make."

Challenging Apple may be difficult, if not impossible, today, when rival tablets play in the same band of prices, but that won't last forever, said Gottheil.

"At some point, consumers will break into camps, with one saying 'I want to get something good enough that's cheap,' and the other saying 'I want something that's great.' The first, that will go to Android," Gottheil said.

But it's tough to predict when that will happen.

Neither analyst saw Android tablets on the same relatively-short timeline that developed for Android smartphones, and agreed that it will probably take longer to challenge the iPad than it did to catch the iPhone.

"I think the curve might be a little more difficult for Android [on tablets] than on smartphones," said Connery. "Apple keeps moving the bar."

Connery noted that Google's planned acquisition of Motorola Mobility -- a $12.5 billion deal that it announced earlier this week -- has implications in the Android-versus-iOS tablet tussle.

"Google and Motorola are getting together for some reason, and it's not all about patents," said Connery. "They have tablets in mind as well."

Analysts have generally agreed that Google's purchase was driven by a desire to beef up its patent portfolio as it defends Android from legal challenges by both Apple and Microsoft, although some, including German patent activist Florian Mueller, have argued to the contrary.

But even though the iPad's dominance may not be viable forever, it won't be easy to unseat it.

"HP's decision to not only walk away from webOS, but perhaps all its PC business, shows how tough it is to play in consumer electronics," Connery concluded. "We've seen brand and brand again not have a sustainable consumer business. Everyone wants to be in it, but once there, they realize how slim the margins are. Everyone except Apple, that is."

And that, added Gottheil, is exactly what HP's actions do demonstrate.

"In this age of 'consumerization [of IT]' HP is 'de-consumerizing' its business," said Gottheil.

HP's strategic shift away from TouchPad;Ehassan.tk

3:33 PM

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.
On a conference call Thursday, HP Chief Financial Officer Cathie Lesjack said the company decided to exit the tablet business due to weak sales and suggested it had no plans to try again.
"With such a young ecosystem and poorly received hardware, we were unable to achieve our target," she said.
It's hard to see HP's retreat as anything less than a validation of the post-PC vision articulated by Apple CEO Steve Jobs.
"A lot of folks in this tablet market are rushing in and they're looking at this as the next PC," Jobs was quoted as saying at the unveiling of the iPad 2 in March. "The hardware and the software are done by different companies. And they're talking about speeds and feeds just like they did with PCs.
"And our experience and every bone in our body says that that is not the right approach to this. That these are post-PC devices that need to be even easier to use than a PC. That need to be even more intuitive than a PC. And where the software and the hardware and the applications need to intertwine in an even more seamless way than they do on a PC."
Jobs' words ring even more true in light of Google's announcement on Monday that it plans to buy Motorola Mobility for $12.5 billion in what would be by far its largest acquisition.