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Whitman Says HP Is Building New Smartphone, Rules Out RIM Acquisition

If the appointment of a new CEO to run Autonomy was the first of many steps needed to put HP on an even keel, then the recent interview by Meg Whitman with Fox Business News has just muddied the waters again. Her bombshell announcement: HP intends to move into the smartphone market — again.

Anyone who has been following HP for any length of time remembers the upheaval that surrounded former CEO Leo Apotheker's announcement that HP was getting out of the hardware market. In this context, Whitman's statement is startling.

It's not difficult to believe that HP wants to venture into the smartphone market again. But in light of everything that has been said and done around webOS, the announcement makes it hard to work out where the ailing giant is going.

Just for the record, this what Meg Whitman replied when asked about HP and smartphones:

We did take a detour into smartphone and we’ve got to get it right this time. So my mantra to the team is: better right than faster than we should be there. … My view is that we have to ultimately offer a smart phone because, it many countries in the world, that is your first computing device.”

You can see the full 91 second video here:

HP, webOS

So let’s turn the clock back a bit to see why this might be causing problems for some people.

Previously, HP had a number of Windows Mobile devices targeting the consumer market, but in 2010, it dumped them and bought into Palm.

Along with the Autonomy purchase, Palm was one of the big HP buys in recent years costing US$ 1.2 billion and with it came WebOS. There was little doubt that this was good for Palm; but it raised a big question: what was HP going to do with it?

The company's first move was to put WebOS into the HP TouchPad tablet. Ultimately, the tablet failed and HP was presented difficult choices regarding WebOS — closing it down, selling it off, or creating a new product line to support it.

Whitman, the then-recently appointed CEO of HP, took a fourth route and offered up both the ENYO app framework and WebOS to the open source community.

The loss of WebOS wasn't good, with ramifications that included the elimination of many jobs and a loss of face. And it didn’t stop there — it has taken nearly 18 months to wrap this up, with HP finally spinning off the remnants of its WebOS Global Business Unit into a separate company called Gram last month.

So HP had a perfectly good OS that a lot people seemed to like, but then dumped it, cutting a whole pile of jobs and losing considerable face.

And now HP is talking about re-entering the smartphone market.

No RIM Plans

What will happen now is anyone’s guess. According to Whitman, only two things are definite: HP will be building this from the ground up and they will NOT be buying Research in Motion. In this case, the old adage "Once bitten, twice shy" applies. 

There are many questions about this decision that only HP can answer. For example, does it make sense to even consider doing this, given the current tight market conditions? Could it be too late for HP to even gain a foothold? Would it make more sense for HP to focus on building up what it has already? It would seem like a priority to find a way to make money out of Autonomy.

When Whitman announces concrete plans, which may not be all that soon, given the way she is talking at the moment, we'll let you know.


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