HP keeping webOS a real possibility – what could that mean?
Tonight’s all-hands meeting proved one thing: HP CEO Meg Whitman was not kidding when she said she was going to consider all options and take a “holistic” approach to deciding what to do with webOS. According to reports from the meeting, Whitman is leaning towards keeping webOS, telling the employees that she wouldn’t be telling them to stay if she were going to get rid of webOS, and even if that were the case they would “find something to do with you.”
So today’s meeting was mostly to assure the crowd that webOS isn’t going to be unceremoniously dumped, and at the very least they’ll still have jobs at HP if they want them. But if HP is to keep webOS, what does that mean going forward?
Tablets. HP’s focus upon buying Palm was tablets, and if they decide in the coming weeks to keep webOS, that’ll be their focus going forward. Smartphones are a maturing market, and while there’s still enormous growth potential, it’s a hard market to break into (see: webOS). Tablets, on the other hand, might be dominated by Apple, but the size of the market right now is comparatively tiny. HP knows that tablets are going to be a huge segment of personal computing in the coming years, and who is to say that it has to come down to Windows 8 vs. iPad? One thing's for sure: we better not see the TouchPad resurrected. There's too much of a stain (of cheapness and failure) on that product and name.
No Phones. Leo Apotheker’s decision to surprise the world and kill webOS did some really bad things to HP’s relationship with wireless carriers. Verizon and AT&T were gearing up to carry the HP Pre3, with the AT&T launch likely to happen very soon after. But canceling webOS hardware development led to the cancellation of those contracts and the scuttling of the near-term hopes for webOS phones. Plus there’s the reality that while webOS 2.2 is a nice operating system and serves the webOS community well, it simply can't compete against Apple's iOS 5 and Google's Android 4.0. Tablets are going to be the future of webOS for some time, with the plan likely going along with what Google did for Android – 3.0 was for tablets only, 4.0 will split across tablets and phones. Said Whitman when somebody asked about webOS phones: “things get complicated.” And yes, this makes us exceedingly sad.
Mea Culpa. HP keeping webOS would cap one of the greatest corporate reversals in history. This would be up at the level of New Coke. Whitman’s pushing ahead with reversing what damage of Leo Apotheker’s that she can, and she’s still accessing whether or not webOS is salvageable. We like to think that it is, but a decision like this isn’t easy.
Big Money. And here’s the main reason why it isn’t easy. And it’s the main reason HP under Apotheker gave up on webOS: it will take a lot of money to build up webOS. We’re talking billions upon billions of dollars. That stands in stark contrast to the possible “hundreds of millions” HP could net by selling webOS. But the profit potential is enormous, which takes us back to why HP (then under Mark Hurd) bought Palm and webOS in the first place. It’s has to be a massive long haul investment, which Whitman seems to recognize. The question is whether or not she’ll decide the profit potential is worth the risk.