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HP and Mobile: Deja Vu All Over Again? Some See Failure

HP and Mobile: Deja Vu All Over Again? Some See Failure
By Jennifer LeClaire

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HP CEO Meg Whitman's plan for an HP phone is wrongheaded, said analyst Michael Disabato. He predicts if HP tries a webOS phone it will fail because the market is not friendly to new smartphone operating systems at this stage. "If HP does an Android or a Windows Phone device, fine. But I still don't think HP will be competitive....HP is too late for the market."
 


Despite the dismal failure that was webOS, Hewlett-Packard CEO Meg Whitman is declaring that her company is going to venture back into the ultra-competitive smartphone market. Commenting on the prospect, Yam Su Yin, HP's Senior Director for Consumer PC and Media Tablets, Asia Pacific, told Indian news agency PTI it would be "silly" for HP not to get back into the game.

This isn't the first time we've heard Whitman and company express interest in the market. In September 2012, Whitman told Fox Business that "we ultimately have to offer a smartphone" in developing countries where consumers aren't going to buy PCs and laptops. When exactly HP plans to roll out a phone remains a mystery.

HP bought Palm largely for that company's webOS assets, for $1.2 billion in 2010. In the next year, the company launched a tablet, the TouchPad, based on webOS. Less than two months later, it pulled the plug on all webOS projects. LG ultimately bought those webOS assets from HP.

HP's Image Problem

We caught up with Michael Disabato, managing vice president of network and telecom for industry research firm Gartner, to get his take on HP's planned market entry. He told us if HP tries to push out another webOS phone, he predicts it will fail because the market is not friendly to new smartphone operating systems at this stage in the game.

"If HP does an Android or a Windows Phone device, fine," Disabato said. "But I still don't think HP will be competitive in the smartphone arena. HP is too late for the market unless they are completely able to shatter the pricing models and the operator strangleholds."

Disabato also points to an "image problem" for HP. The company has, in recent years, jumped in and out of markets, like PCs and laptops, and even the infrastructure business. He's weary of the back-and-forthing and said it doesn't fare well with enterprises, either.

A Costly Entry?

"Enterprises want stability, and when you are making an infrastructure choice that is going to last anywhere from five to 10 years, they don't want a vendor who is going to pop in and out," Disabato said. "I would think that if enterprises are looking at the phone business, they don't want them popping in and out either. You are either in on the smartphone business or you are not."

From the consumer standpoint, Disabato reminds that HP is an engineering firm, like Motorola. Unless HP has hired some slick consumer-focused designers to craft something that will turn consumer heads, he predicts it will not succeed against the likes of Apple and Samsung, or even Nokia and HTC.

"If HP wants to try to get into the smartphone market, it is going to have to commit to going head to head with Apple and Samsung or they may as well not even try," Disabato said. "This is going to cost the shareholders a ton of money and it's going to cause HP a ton of bad press if they fail."
 

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