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RIP Palm smart phones: HP's CEO indicates that the company plans to let the business die down and will not continue investing in webOS smart phones.  (Source: Verizon)
World's biggest computer manufacturer said it merely bought Palm for IP for devices like tablets

Hewlett Packard, the world's largest personal computer maker, is in a period of transition.  It's releasing 9,000 employees and hiring 6,000 new ones.  And it just purchased Palm at the end of April for $1.2B USD.

That acquisition gives HP access to webOS, a powerful mobile internet device operating system.  HP is already rumored to be cooking up a webOS tablet -- dubbed "Hurricane".  However, according to Mark Hurd, HP's Chief Executive Officer, the company is not planning to launch or market new Palm smart phones.

Hurd commented at a Bank of America Merill Lynch technology conference, "We didn’t buy Palm to be in the smartphone business. And I tell people that, but it doesn’t seem to resonate well. We bought it for the IP. The webOS is one of the two ground-up pieces of software that is built as a web operating environment…We have tens of millions of HP small form factor web-connected devices…Now imagine that being a web-connected environment where now you can get a common look and feel and a common set of services laid against that environment. That is a very value proposition."

He adds that the company isn't going to "spend billions of dollars trying to go into the smartphone business; that doesn’t in any way make any sense."

The idea that HP bought Palm only to turn around and let the veteran smartphone maker's core business die indeed strikes some as bizarre.  Adding to the confusion is that HP's rival Dell is soon going to be unleashing smartphones powered by Android OS and Windows Phone 7.

However, HP seems dead set not to spend the money required to continue to design and produce smartphone handsets.  In that sense, webOS smartphones have become a threatened species -- past the current generation, it sounds unlikely that any new hardware will arrive.

Instead, HP will use its webOS assets to power devices such as tablets or web-enabled printers.  It also looks to use other assets in Palm's rich intellectual property portfolio, a byproduct of its pioneering role in the PDA and smartphone movements.  In that sense, even if HP sticks to its word about smartphones, its modest investment may soon pay off.

Updated 5/3/2010 @ 6:15 pm EST

According to Engadget, HP is clarifying Hurd's comments about webOS on smartphones. Here's the response from HP:

When we look at the market, we see an array of interconnected devices, including tablets, printers, and of course, smartphones. We believe webOS can become the backbone for many of HP's small form factor devices, and we expect to expand webOS's footprint beyond just the smartphone market, all while leveraging our financial strength, scale, and global reach to grow in smartphones.

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By omnicronx on 6/3/2010 10:55:56 AM , Rating: 5
We continue to think mobility will be a very important part of the market. [...] when you think of HP, it'll be a little different from what people talk about the smartphone market. [...] The opportunity for content to be aligned to those interconnected devices [tablets and printers], particularly those small form-factor devices, that intellectual property gives us, we think a tremendous opportunity to work with HP across the ecosystem.

Smartphones are just another connected device to us. For example, building a smartphone or a phone of any type is not a particularly complicated engineering feat - and I don't mean that to be demeaning to anybody in the phone business. The more important part is the intellectual property ecosystem of IP and the services that connect to it. So for us I think you should think of the webOS being a more important component than necessarily the phone itself.

Everyone took his original comments out of context. Hes not saying HP is getting out of the smartphone business once they aquire Palm, he is saying Palm's smartphone business was not the reason they acquired Palm. They acquired them for their WebOS IP, and wants to extend it to other HP products, but that does not mean they are merely going to throw WebOS smartphones to the curb, it just won't be their only/main focus for WebOS.

RE: ...
By lyeoh on 6/3/2010 2:00:48 PM , Rating: 2
Palm may go the way of Tandem and VMS.

RE: ...
By melgross on 6/3/2010 2:32:51 PM , Rating: 2
No, he said, in a direct quote, that they wouldn't be spending the billions it took to have smartphones. That's saying that they're getting out of that part of the business. Any other interpretation is just wishful thinking.

It's understandable, as the products have been failures by any measurement. I really don't see how they would be a success in a tablet either. People just don't seem to like these things.

RE: ...
By omnicronx on 6/3/2010 4:16:33 PM , Rating: 2
Obviously he felt the need to address the article that spread like wildfire from one source (in which it was not an interview, but an excerpt of his speech at a conference).

He felt the need to sit down and have a video interview to clear things up, so obviously its a little more than wishful thinking.

Either things were taken out of context (which would not be beyond the realm of possibility considering the original source), or he truly is a moron and made a terrible mistake.

In the end you would truly have to be a bad CEO to make any claims like this (even if they were true), especially with the pending roll out of the Pre in Europe and the recent AT&T release.

RE: ...
By Moishe on 6/7/2010 10:09:49 AM , Rating: 2
WebOS is really a great OS and done right, it can be a real benefit to HP. I have a Palm Pre Plus and I think the OS is really genius. The phone itself is OK, and it's a bit under powered, but if you put the OS on a more powerful device with a bigger screen, I think it will shine.

One too many
By dani31 on 6/3/2010 9:12:42 AM , Rating: 3
There are too many mobile platforms already but WebOS wasn't exactly the one I was hoping too see gone.

I would rather do without Bada and LiMo.

RE: One too many
By jhb116 on 6/3/2010 9:45:39 AM , Rating: 3
Ditto - If HP doesn't want to invest in hardware - then they should take the Google/Android, Microsoft/Windows Mobile approach - develop the software and allow others to build hardware around the OS. They could then decide if it is worthy of charging a fee or not.

That business model, along with the IBM compatible, won Microsoft the desktop/OS war. At least Android is stepping up to the plate in the handset OS business - this is why Apple is doomed to eventual obscurity here as well.

RE: One too many
By MGSsancho on 6/3/2010 4:11:23 PM , Rating: 2
That is exactly what they are going to do. only hardware they will do is larger Tablets and apparently printers.

RE: One too many
By inperfectdarkness on 6/3/10, Rating: 0
Web OS can only by HP
By littleprince on 6/3/2010 9:54:57 AM , Rating: 1
WebOS cannot compete with Android and WinMo as long as they are owned by HP. Other hardware manufacturers will not invest in their competitor.

Google and MS have no interest in hardware manufacturing whereas if another company X spends billions promotion WebOS it is their hardware manufacturing competitor that benefits and can step in at any time and destroy that work.

RE: Web OS can only by HP
By mcnabney on 6/3/2010 10:36:11 AM , Rating: 2
I disagree on two points.

First, Google did make a device. Fortunately they are not stubborn fools and acknowledged that HTC and Motorola were making products just as good or better so it won't be worth their time to stay actively engaged in developing a constant flow of devices.

Second, Microsoft is just holding the door for the Palm-device exit. They will be leaving too after their new mobile device platform fizzles. Sorry, there is only room for one company that offers a closed system with numerous features missing and Apple isn't going to give that spot up.

RE: Web OS can only by HP
By nafhan on 6/3/2010 1:07:43 PM , Rating: 2
Don't count Microsoft out until they decide to quit or run out of money - neither of which has happened. Look at anything they've been successful with. Success for them usually doesn't happen on the first, second, or - often - even the third try. Also, MS does their best when they are in second place or coming back from a huge failure. Both are, arguably, the case with their mobile OS division.

RE: Web OS can only by HP
By theapparition on 6/3/2010 3:31:04 PM , Rating: 2
First, Google did make a device.

I hope you didn't mean the HTC designed and manufactured NexusOne.

Google has never made a hardware device.

Second, Microsoft is just holding the door for the Palm-device exit.

I'm not going to disagree with you here. MS seems intent on following Apples mobile model. MS needs something to differentiate themselves, not another me-too. See Zune for failure (which is a shame, because the Zune is far superiour to the iPod in every way).

they will earn money
By Murloc on 6/3/2010 9:16:44 AM , Rating: 2
they get enough money from IP and will use webOS, risking to make palm smartphones better isn't worth it or necessary.

RE: they will earn money
By Chadder007 on 6/3/2010 6:04:47 PM , Rating: 2
But the platform is already there. There isn't much they need to do to release the perfect Palm smartphone. The OS is there, what they needed in the first place was a Landscape keyboard. That's basically what a lot of users have been waiting for. I hate the tiny one it has now and decided not to get one myself. Otherwise I love the OS, even more so than Android.

RE: they will earn money
By Moishe on 6/7/2010 10:35:16 AM , Rating: 2
I agree. The problem with the current Palm devices is the hardware, not the software. If they add some power and a better keyboard, maybe a higher res camera, they'll get more sales.

Seems natural
By Calin on 6/3/2010 9:01:14 AM , Rating: 2
If Palm didn't had any success in this smartphone business (Palm's strong point), what success could HP hope to have? And it would need to support and develop by itself the entire webOs stack against Blackberry, iPhone and Android. Remember the 200,000 Palm phones sold by Palm, versus what Apple sold.

RE: Seems natural
By retrospooty on 6/3/2010 7:43:26 PM , Rating: 2
"If Palm didn't had any success in this smartphone business (Palm's strong point), what success could HP hope to have? And it would need to support and develop by itself the entire webOs stack against Blackberry, iPhone and Android."

Palm couldnt execute many things well, thier sales marketing and logistics suck, and their hardware isn't all that great, better than it used to be but not great.

WebOS on the other hand beats the stink out of Apple and Android. Its simply the best mobile OS out there by a mile. I didnt mention Blackberry because they arent in the same league with Apple, Android, and WebOS. They are 5 years behind the rest of the world surviving off thier name (because 5 years ago they had the best mobile email product.)

Web OS on a good hardware phone like motorola droid would be a freegin home run. I hope HP licenses it out so other manufacturers like HTC and Motorola can build phones on it.

WebOS Enabled Printers
By Jedi2155 on 6/3/2010 11:29:32 AM , Rating: 1

RE: WebOS Enabled Printers
By JediJeb on 6/3/2010 5:14:09 PM , Rating: 2
Kinda what I thought. Sounds like the ideas for the web enabled kitchen appliances someone thought up a few years ago.

They just ignore...
By acsa77 on 6/3/2010 11:14:32 AM , Rating: 2
...a very simple practical issue: if somebody owns a webOS device it is very practical to have it as a phone and tablet, too. Apple and Dell is (will be) very smart in this since they will provide a clean range of sizes. Differences between smartphones and tablets are not so big as Apple shows very clearly. HP just abandons market share with no saving in fix costs of development and support. HP had smartphones and now bought a company which makes quite acceptable ones as a base for handheld. And now abandons again. Competitors are just loughing. And they could've invested on the android platform for e.g. good applications/services and use their one HW-know-how. Who the hell will develop for one more platform (WebOS) if it will be only a small market segment?

Anyway, HP was very talented for decades in selling 2nd grade hardware overpriced. But they just used the money for buying market-share and abandoning core-technologies. E.g. they abandoned TWO HPC-platforms and now HPC is emerging somewhere else...

You need to update this
By sticksabuser on 6/3/2010 12:12:42 PM , Rating: 2

Apparently The CEO is just looking at all devices being connected, including any phones.

License the OS
By LordConrad on 6/3/2010 4:00:35 PM , Rating: 2
WebOS is too good to allow it to die on the smartphone, I hope HP will license it to cellphone companies like HTC.

By Ralos on 6/3/2010 5:47:53 PM , Rating: 2
We didn’t buy Palm to be in the smartphone business.

How do they hope to recover their 1.2 billion $ investment if they don't plan to go into the smartphone business?

In case these guys haven't noticed, there's Android, soon Chrome and a variety of Linux based OS out there. All of them free.

The targeted devices he's talking about don't run with the ARM processors WebOS has been build for either. I know, it's not like everything has to be rewritten, but still, it's far from Plug And Play either.

When Google bought YouTube for 2B$, analysts wondered if they had paid too much...

I don't understand at all how they expect this move to be profitable for them. We might be too used to hear about billions of dollars, but 1.2B$ is incredibly expensive for the IP associated with WebOS IMO.

same as always by Mick
By johnsonx on 6/4/2010 11:02:46 PM , Rating: 2
More stunningly bad reporting by Mick... in the past I would gripe about almost every horrific Mick article, but I eventually grew weary of it and found other web sites more worthy of my time. It's both amusing and frightening to see Mick has gotten no better.

By reader1 on 6/3/10, Rating: -1
RE: Huh?
By themaster08 on 6/3/2010 12:19:46 PM , Rating: 2
You make an educated comment?

RE: Huh?
By Smartless on 6/3/2010 2:17:54 PM , Rating: 1
Wow he's in the negative. I didn't think that was possible.

RE: Huh?
By ssjwes1980 on 6/3/2010 10:21:25 PM , Rating: 2
Not been around long have you?

"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov

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