Many of us is still pondering on the Google Motorola Mobility deal and today we (WSJ.com) heard that HP it’s quitting its PC business by a spinoff. At the same time, HP is shutting down its tablets and smartphone business so we can now say goodbye to HP TouchPad for good.
Yesterday we could read that Best Buy management wants to return 200k units back to H-P as they have not been able to sell more than 25k of TouchPads. That is tough for HP. I remember blogging and commenting on H-P acquiring WebOS and Ari Jaaksi to become Senior Vice President for WebOS. Ari used to work in the Nokia Meego project previously and his blog can be found here where he has been commenting on the WebOS development.
What is intriguing in this overall news is that the tablet or hardware business has become a commodity low-margin business and IBM realized this a few years ago when selling its PC business to Lenovo. HP wants to do the same thing, focus on software and services and leave the low margin business to others. A sign of this HP has offered to acquire U.K. enterprise software firm Autonomy Corp for $10.25 billion. I just listened to CNBC and some analyst was skeptical about this decision specifically now with the change of strategy to exist the PC business. Also, the analysts conclude that an European software executive Leo Apotheker is buying another European which might make it easier. Only time will tell.
What should be concerning to HP and its upcoming earnings is that by announcing the fact that they are getting out of PC business might have an impact in their sales in similar fashion what Stephen Elop has experienced with Nokia smartphone sales that are based on Symbian. He became famous with his statements of a burning platform.
The similarities between Elop’s and Nokia’s departure from Symbian can be seen similar to that of HPs decision to leave PC business. The market will view things from viability perspective and acquire and purchase things that have a life. Symbian is on life support, WebOS has a dire future as HP is abandoning it so as far as I am concerned we are left with three players in the mobility/tablet space. I do NOT believe in other platforms such as Bada from Samsung. They are just too late with something new that the development community would be excited about. There is just a limit of how many platforms ISVs can support and Bada won’t be one of them.
That is why I really think that the mobility space will now be between Apple iPhone/iPad, Google Android and Microsoft Windows Phone and the upcoming Windows 8 with a tablet.
The question will be how this news will impact Dell, Acer and other similar companies? Will this have a positive impact on these vendors from market share perspective or are we in a down-spiral in respect to PCs as the market and market analysts are claiming? There is no question that Apple iPad has become a major player with more than 25 million delivered and some analysis (not IDC) are already counting iPad in the same category with a PC/laptop and with this calculation, Apple has become a major player.
I do not think the news today about HP will be the last one we will hear about the turmoil this fall. I expect that there will be further consolidation in the mobility market as well as PC markets. Time will tell what it is.
Do you agree with my conclusions?