HP reports Q4 and 2011 full year results – lost $3.3 billion on webOS | webOS Nation
 
 

HP reports Q4 and 2011 full year results – lost $3.3 billion on webOS 97

by Derek Kessler Mon, 21 Nov 2011 5:42 pm EST

HP’s fourth quarter 2011 and full year 2011 results were released today, and the news from HP wasn't all that surprising. In the last quarter HP brought in $32.3 billion of revenue, netting them a profit of $2.4 billion. For the entire year, HP’s revenue clocked in at $127.4 billion, with $12.6 billion in profit. Better than nothing, but not huge.

$200 million of that revenue can be attributed to HP’s TouchPad fire sale. While $200 million is a good set of sales numbers for webOS, that revenue also came from tablets sold at below-cost. And that’s not all – HP clocked “after-tax costs” (i.e. money lost) due to webOS that amounted to $3.3 billion over the 2011 fiscal year.

What exactly HP’s planning to do with webOS, we still don’t know. Maybe we’ll hear more during today’s conference call (scheduled for 5PM Eastern) or not. We’ll see, though with $3.3 billion in losses related directly to webOS, they’ll have to commit many more billions if they want to continue with webOS.

HP Reports Fourth Quarter and Full Year 2011 Results

PALO ALTO, CA, Nov 21, 2011 (MARKETWIRE via COMTEX) --

HP (NYSE: HPQ)

-- Fiscal 2011 non-GAAP net revenue of $127.4 billion, non-GAAP diluted earnings per share of $4.88 and free cash flow of $9.1 billion grew 1%, 7% and 8%, respectively, over the prior year -- Fiscal 2011 GAAP net revenue of $127.2 billion, GAAP diluted earnings per share of $3.32 and cash flow from operations of $12.6 billion -- Fourth quarter non-GAAP net revenue of $32.3 billion, non-GAAP diluted earnings per share of $1.17 and free cash flow of $1.2 billion were down 3%, 12% and 43%, respectively, from the prior-year quarter -- Fourth quarter GAAP net revenue of $32.1 billion, GAAP diluted earnings per share of $0.12 and cash flow from operations of $2.4 billion

HP today announced financial results for its fourth quarter and full fiscal year ended Oct. 31, 2011.

"HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property," said Meg Whitman, HP president and chief executive officer. "We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution."

"While FY11 proved to be a challenging year, we grew non-GAAP EPS 7% and generated $12.6 billion in cash flow from operations," said Cathie Lesjak, HP executive vice president and chief financial officer. "We're remaining cautious heading into FY12 but are focused on delivering our earnings outlook and driving shareholder value."

Earnings highlights

------------------ ------------------------------ --------------------------                     Q4 FY11   Q4 FY10      Y/Y      FY11    FY10      Y/Y ------------------ ------------------------------ -------------------------- GAAP net revenue  ($B)              $   32.1  $   33.3        (3%) $127.2  $126.0         1% ------------------ ------------------------------ -------------------------- GAAP operating  margin                 2.5%      9.9% (7.4 pts)     7.6%    9.1% (1.5 pts) ------------------ ------------------------------ -------------------------- GAAP net earnings  ($B)              $    0.2  $    2.5       (91%) $  7.1  $  8.8       (19%) ------------------ ------------------------------ -------------------------- GAAP diluted EPS   $   0.12  $   1.10       (89%) $ 3.32  $ 3.69       (10%) ------------------ ------------------------------ -------------------------- Non-GAAP net  revenue ($)       $   32.3  $   33.3        (3%) $127.4  $126.0         1% ------------------ ------------------------------ -------------------------- Non-GAAP operating  margin                 9.7%     12.0% (2.3 pts)    10.8%   11.4% (0.6 pts) ------------------ ------------------------------ -------------------------- Non-GAAP net  earnings ($B)     $    2.4  $    3.1       (23%) $ 10.4  $ 10.9        (4%) ------------------ ------------------------------ -------------------------- Non-GAAP diluted  EPS               $   1.17  $   1.33       (12%) $ 4.88  $ 4.58         7% ------------------ ------------------------------ --------------------------  

Information about HP's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below. Unless otherwise specified, all revenue amounts below are calculated on a GAAP basis.

Full year fiscal 2011 GAAP net revenue for the full fiscal year 2011 was $127.2 billion, up 1% compared with the prior year or down 1% when adjusted for the effects of currency. GAAP operating profit was $9.7 billion, and GAAP diluted earnings per share (EPS) was $3.32, down 10% from the prior year.

Non-GAAP net revenue for the full fiscal year 2011 was $127.4 billion, up 1% compared with the prior year or down 1% when adjusted for the effects of currency. Non-GAAP operating profit was $13.8 billion, and non-GAAP diluted EPS was $4.88, up 7% from the prior year.

Fiscal 2011 non-GAAP net revenue includes an additional $0.2 billion of revenue resulting from the exclusion of contra revenue associated with sales incentive programs implemented in the fourth quarter in connection with the wind down of HP's webOS device business, net of fourth quarter webOS device revenue. Non-GAAP earnings and operating profit information excludes after-tax costs of $3.3 billion, or $1.56 per diluted share, related to the wind down of HP's webOS device business, impairment of goodwill and purchased intangible assets, amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

Fourth fiscal quarter 2011 For the quarter, GAAP net revenue of $32.1 billion was down 3% from the prior-year period. Non-GAAP net revenue of $32.3 billion was down 3% from the prior-year period as reported and down 6% when adjusted for the effects of currency.

GAAP diluted EPS was $0.12, down 89% from the prior-year period. Non-GAAP diluted EPS was $1.17, down 12% from the prior-year period.

Fourth quarter non-GAAP net revenue includes an additional $0.2 billion of revenue resulting from the exclusion of contra revenue associated with sales incentive programs implemented in connection with the wind down of HP's webOS device business, net of webOS device revenue for the period. Fourth quarter non-GAAP earnings information excludes after-tax costs of $2.1 billion, or $1.05 per diluted share, related to the wind down of HP's webOS device business, impairment of goodwill and purchased intangible assets, amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

Fourth fiscal quarter 2011 trends and regional performance In the Americas, fourth quarter GAAP net revenue was $14.5 billion, down 4% year over year and down 5% when adjusted for the effects of currency. Non-GAAP net revenue in the Americas was $14.6 billion, down 3% year over year and down 4% when adjusted for the effects of currency.

Europe, the Middle East and Africa GAAP revenue of $11.7 billion was down 6% year over year and down 10% when adjusted for the effects of currency. GAAP revenue in Asia Pacific was $6.0 billion, representing a 3% increase year over year, and down 4% when adjusted for the effects of currency.

GAAP revenue from outside of the United States in the fourth quarter accounted for 65% of total HP revenue. BRIC countries (Brazil, Russia, India and China) generated revenue of $3.8 billion, up 9% over the year-ago period, for 12% of total HP revenue.

Revenue in HP's commercial businesses declined 2% year over year. Revenue in HP's consumer businesses, within PSG and IPG, was collectively down 9% year over year.

Fourth fiscal quarter 2011 business group results

-- Services revenue of $9.3 billion grew 2% year over year with a 12.8% operating margin. Technology Services and Application Services revenue grew 3% and 2%, respectively, while IT Outsourcing revenue grew 1% and Business Process Outsourcing revenue declined 2%. -- Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% year over year with a 13.0% operating margin. Networking revenue was up 5%, Industry Standard Servers revenue was down 4%, Business Critical Systems revenue was down 23%, and Storage revenue was up 4%. -- HP Software revenue grew 28% year over year with a 27.7% operating margin. HP Software revenue was driven by revenue growth in licenses and services of 33% and 36%, respectively. -- Personal Systems Group (PSG) revenue declined 2% year over year with a 5.7% operating margin. Commercial client revenue grew 5%, and Consumer client revenue declined 9%. Total units were up 2% with 5% growth in desktop units and 1% growth in notebook units. -- Imaging and Printing Group (IPG) revenue declined 10% year over year with a 12.8% operating margin. Commercial revenue was up 4% year over year with commercial printer hardware units up 5%. Consumer printer hardware revenue was down 8% year over year with an 8% decline in units. -- Financial Services revenue grew 18% year over year driven by double-digit growth in both lease volume and portfolio assets. The business delivered a 10.3% operating margin.

Asset management HP generated $2.4 billion in cash flow from operations in the fourth quarter. Inventory ended the quarter at $7.5 billion, with days of inventory up 4 days year over year to 27 days. Accounts receivable of $18.2 billion was up 1 day year over year to 51 days. Accounts payable ended the quarter at $14.8 billion, flat from the prior-year period at 52 days. HP's dividend payment of $0.12 per share in the fourth quarter resulted in cash usage of $239 million. HP also utilized $500 million of cash during the quarter to repurchase approximately 17 million shares of common stock in the open market. HP exited the quarter with $8.1 billion in gross cash.

Outlook For the first quarter of fiscal 2012, HP estimates non-GAAP diluted EPS in the range of $0.83 to $0.86, and GAAP diluted EPS in the range of $0.61 to $0.64.

First quarter fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.22 per share, related primarily to the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.

HP expects full year fiscal 2012 non-GAAP diluted EPS of at least $4.00 and GAAP diluted EPS of approximately $3.20.

Full year fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.80 per share, related primarily to the amortization and impairment of purchased intangibles, restructuring charges and acquisition-related charges.

In order to more effectively manage HP as one company and align its guidance policy with its long-term objective of delivering profitable growth, HP will only be providing a quarterly and annual earnings per share outlook. The company believes that earnings per share is a better indicator of successful execution across its various business levers. HP remains committed to high levels of disclosure and transparency, including general commentary on its expectations relating to future revenue and business segment performance, and will continue to provide detailed segment-level financial performance data for completed fiscal periods.

More information on HP's quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP's Investor Relations website at www.hp.com/investor/home.

HP's Q4 FY11 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2011q4webcast.

About HP HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world's largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP is available at http://www.hp.com.

Use of non-GAAP financial information To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP net revenue, non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash and free cash flow. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, operating profit, operating margin, net earnings, diluted earnings per share, cash and cash equivalents or cash flow from operations prepared in accordance with GAAP.

Forward-looking statements This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates, the impact of acquisitions or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of cost reduction programs and restructuring and integration plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HP's businesses; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of restructuring and integration plans; the possibility that the expected benefits of business combination transactions may not materialize as expected; the resolution of pending investigations, claims and disputes; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2010 and HP's other filings with the Securities and Exchange Commission, including HP's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2011. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP's Form 10-K for the fiscal year ended October 31, 2011. In particular, determining HP's actual tax balances and provisions as of October 31, 2011 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP's Form 10-K. HP assumes no obligation and does not intend to update these forward-looking statements.

Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.

                   HEWLETT-PACKARD COMPANY AND SUBSIDIARIES                CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS                                 (Unaudited)                    (In millions except per share amounts)                                                Three months ended                                    ----------------------------------------                                     October 31,    July 31,     October 31,                                        2011          2011          2010                                    ------------  ------------  ------------  Net revenue                        $     32,122  $     31,189  $     33,278  Costs and Expenses:(a)   Cost of sales                          25,332        23,929        24,995   Research and development                  829           812           814   Selling, general and    administrative                         3,577         3,402         3,464   Amortization of purchased    intangible assets                        411           358           424   Restructuring charges                     179           150           235   Acquisition-related charges               114            18            51   Impairment of goodwill and    purchased intangible assets              885             -             -                                    ------------  ------------  ------------     Total costs and expenses             31,327        28,669        29,983                                    ------------  ------------  ------------  Earnings from operations                    795         2,520         3,295  Interest and other, net                    (401)         (121)          (81)                                    ------------  ------------  ------------  Earnings before taxes                       394         2,399         3,214  Provision for taxes                         155           473           676                                    ------------  ------------  ------------  Net earnings                       $        239  $      1,926  $      2,538                                    ============  ============  ============  Net earnings per share:   Basic                            $       0.12  $       0.94  $       1.13   Diluted                          $       0.12  $       0.93  $       1.10   Cash dividends declared per share  $          -  $       0.24  $          -  Weighted-average shares used to  compute net earnings per share:   Basic                                   1,989         2,054         2,249   Diluted                                 2,005         2,080         2,297   (a) In connection with organizational realignments implemented in the first     quarter of fiscal 2011, certain costs previously reported as Cost of     Sales have been reclassified as Selling, General and Administrative     expenses to better align those costs with the functional areas that     benefit from those expenditures.   

                   HEWLETT-PACKARD COMPANY AND SUBSIDIARIES                CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS                    (In millions except per share amounts)                                                        Twelve months ended                                                          October 31,                                                  --------------------------                                                      2011          2010                                                  ------------  ------------                                                   (Unaudited)  Net revenue                                      $    127,245  $    126,033  Costs and expenses:(a)   Cost of sales                                        97,529        95,956   Research and development                              3,254         2,959   Selling, general and administrative                  13,466        12,718   Amortization of purchased intangible assets           1,607         1,484   Restructuring charges                                   645         1,144   Acquisition-related charges                             182           293   Impairment of goodwill and purchased    intangible assets                                      885             -                                                  ------------  ------------     Total costs and expenses                          117,568       114,554                                                  ------------  ------------  Earnings from operations                                9,677        11,479  Interest and other, net                                  (695)         (505)                                                  ------------  ------------  Earnings before taxes                                   8,982        10,974  Provision for taxes                                     1,908         2,213                                                  ------------  ------------  Net earnings                                     $      7,074  $      8,761                                                  ============  ============  Net earnings per share:   Basic                                          $       3.38  $       3.78   Diluted                                        $       3.32  $       3.69   Cash dividends declared per share                $       0.40  $       0.32  Weighted-average shares used to compute net  earnings per share:   Basic                                                 2,094         2,319   Diluted                                               2,128         2,372   (a) In connection with organizational realignments implemented in the first     quarter of fiscal 2011, certain costs previously reported as Cost of     Sales have been reclassified as Selling, General and Administrative     expenses to better align those costs with the functional areas that     benefit from those expenditures.   

                   HEWLETT-PACKARD COMPANY AND SUBSIDIARIES   ADJUSTMENTS TO GAAP NET REVENUE, NET EARNINGS, EARNINGS FROM OPERATIONS,                   OPERATING MARGIN AND EARNINGS PER SHARE                                 (Unaudited)                    (In millions except per share amounts)                     Three               Three               Three                   months              months              months                   ended               ended               ended                  October   Diluted     July    Diluted   October   Diluted                    31,     earnings    31,     earnings    31,     earnings                    2011   per share    2011   per share    2010   per share                  -------  ---------  -------  ---------  -------  ---------  GAAP net revenue $32,122             $31,189             $33,278  Non GAAP  adjustment:   WebOS device    contra    revenue,    net(a)            142                   -                   -                  -------             -------             ------- Non GAAP net  revenue         $32,264             $31,189             $33,278                  =======             =======             =======   GAAP net  earnings        $   239  $    0.12  $ 1,926  $    0.93  $ 2,538  $    1.10  Non-GAAP  adjustments:   Amortization    of purchased    intangible    assets            411       0.20      358       0.17      424       0.19   Restructuring    charges           179       0.09      150       0.07      235       0.10   Acquisition-    related    charges in    earnings from    operations        114       0.06       18       0.01       51       0.02   Impairment of    goodwill and    purchased    intangible    assets(b)         885       0.44        -          -        -          -   Wind down of    the WebOS    device    business(c)       755       0.38        -          -        -          -   Acquisition-    related    charges in    interest and    other, net(d)     276       0.14        -          -        -          -   Adjustments    for taxes        (509)     (0.26)    (170)     (0.08)    (184)     (0.08)                  -------  ---------  -------  ---------  -------  --------- Non-GAAP net  earnings        $ 2,350  $    1.17  $ 2,282  $    1.10  $ 3,064  $    1.33                  =======  =========  =======  =========  =======  =========   GAAP earnings  from operations $   795             $ 2,520             $ 3,295  Non-GAAP  adjustments:   Amortization    of purchased    intangible    assets            411                 358                 424   Restructuring    charges           179                 150                 235   Acquisition-    related    charges in    earnings from    operations        114                  18                  51   Impairment of    goodwill and    purchased    intangible    assets(b)         885                   -                   -   Wind down of    the WebOS    device    business(c)       755                   -                   -                  -------             -------             ------- Non-GAAP  earnings from  operations      $ 3,139             $ 3,046             $ 4,005                  =======             =======             =======  GAAP operating  margin                2%                  8%                 10% Non-GAAP  adjustments           8%                  2%                  2%                  -------             -------             -------  Non-GAAP  operating  margin               10%                 10%                 12%                  =======             =======             =======   (a) Includes contra revenue primarily associated with sales incentive     programs to wind down the webOS device business, net of current quarter     webOS device revenue.  (b) Includes impairment charges to goodwill and purchased intangible assets     associated with the acquisition of Palm Inc. on July 1,2010 recorded as     a result of the decision announced on August 18,2011 to wind down the     webOS device business.  (c) Includes primarily expenses for supplier-related obligations and contra     revenue associated with sales incentive programs related to winding down     the webOS device business.  (d) Includes primarily the cost of the British pound options bought to limit     foreign exchange rate risk in connection with the Autonomy acquisition.   

                   HEWLETT-PACKARD COMPANY AND SUBSIDIARIES   ADJUSTMENTS TO GAAP NET REVENUE, NET EARNINGS, EARNINGS FROM OPERATIONS,                   OPERATING MARGIN AND EARNINGS PER SHARE                                 (Unaudited)                    (In millions except per share amounts)                               Twelve                    Twelve                             months                    months                             ended       Diluted       ended       Diluted                          October 31,    earnings   October 31,    earnings                              2011      per share       2010      per share                          -----------  -----------  -----------  -----------  GAAP net revenue         $   127,245               $   126,033  Non GAAP adjustment:   WebOS device contra    revenue, net(a)               142                         -                          -----------               ----------- Non GAAP net revenue     $   127,387               $   126,033                          ===========               ===========   GAAP net earnings        $     7,074  $      3.32  $     8,761  $      3.69  Non-GAAP adjustments:   Amortization of    purchased intangible    assets                      1,607         0.75        1,484         0.63   Restructuring charges          645         0.30        1,144         0.48   Acquisition-related    charges in earnings    from operations               182         0.09          293         0.12   Impairment of goodwill    and purchased    intangible assets(b)          885         0.42            -            -   Wind down of the WebOS    device business(c)            755         0.35            -            -   Acquisition-related    charges in interest    and other, net(d)             276         0.13            -            -   Adjustments for taxes       (1,045)       (0.48)        (816)       (0.34)                          -----------  -----------  -----------  ----------- Non-GAAP net earnings    $    10,379  $      4.88  $    10,866  $      4.58                          ===========  ===========  ===========  ===========   GAAP earnings from  operations              $     9,677               $    11,479  Non-GAAP adjustments:   Amortization of    purchased intangible    assets                      1,607                     1,484   Restructuring charges          645                     1,144   Acquisition-related    charges in earnings    from operations               182                       293   Impairment of goodwill    and purchased    intangible assets(b)          885                         -   Wind down of the WebOS    device business(c)            755                         -                          -----------               ----------- Non-GAAP earnings from  operations              $    13,751               $    14,400                          ===========               ===========  GAAP operating margin              8%                        9% Non-GAAP adjustments               3%                        2%                          -----------               -----------  Non-GAAP operating  margin                           11%                       11%                          ===========               ===========   (a) Includes contra revenue primarily associated with sales incentive     programs to wind down the webOS device business, net of current quarter     webOS device revenue.  (b) Includes impairment charges to goodwill and purchased intangible assets     associated with the acquisition of Palm Inc. on July 1,2010 recorded as     a result of the decision announced on August 18,2011 to wind down the     webOS device business.  (c) Includes primarily expenses for supplier-related obligations and contra     revenue associated with sales incentive programs related to winding down     the webOS device business.  (d) Includes primarily the cost of the British pound options bought to limit     foreign exchange rate risk in connection with the Autonomy acquisition.   

                   HEWLETT-PACKARD COMPANY AND SUBSIDIARIES                     CONSOLIDATED CONDENSED BALANCE SHEETS                                 (In millions)                                                     October 31,   October 31,                                                       2011          2010                                                  ------------- -------------                                                   (unaudited) ASSETS  Current assets:   Cash and cash equivalents                      $       8,043 $      10,929   Accounts receivable               &

Source: HP

97 Comments

long live thy webos! thou shalt persevere! thou shalt not back down! thou shalt stand tall! webos users, unite!

@headline title - in my best ET voice -"owwwwwwwwch"

It's too bad no one told Leo Apotheker quarterly reports aren't scored the same way as golf.

It's too bad no one told Leo Apotheker to open his BIG FAT MOUTH...

Wow, that's a pretty deep hole they sunk webOS into. Guess they thought it was better to just take the loss rather than make an effort at recovering it.

I can't believe they really got $200M off the Touchpad firesale though (assuming that's what that number means in the earnings report). Even if most of those were 32GB Touchpads, that's 1-1.3 million units moved. There's either a better interpretation of that number, or there was some serious demand for the Touchpad. If they had sold all those Touchpads at full price, they would've made a serious dent in those $3.3B in losses, heck even the $499 32GB Touchpad would've made a serious dent.

I have to wonder, though, how much of that loss is due to the Veer not selling, or the Pre 3 getting canceled before they had a chance to sell it.

Good questions! I was going to do some math with those sales too but the firesale prices were retail, I have no idea what they actually sold them for and if that's reflected in this report and no, I did not read the whole thing.

I don't know. I should be noted that last quarter they made $266 million in revenue on webos. So this quarter they actually did worse on webos with the fire sale then before.

The problem was when they tried to sell at full price in Q3 nobody wanted to buy them. And it should be noted they only made $66 million more in revenue trying to sell it at full price but both where wildly unprofitable. That's a bit of a hurdle.

Regardless, it's a $99 tablet with $400 components that runs android. **** I don't want a Buick whatever but if you cut the price 80% to 4 grand They'd be selling out of Buicks because at that price it's a damn good deal. as for what accounted for the loss i'm sure some of what you mentioned factors in in some way.

Some say that HP simply "gave up" or "didn't even try". $3.3 BILLION in losses says something different to me; even if some of that is a direct result of shutting down webOS hardware.

If you've lost 3.3 billion, when you had shut the whole thing down 1-2 months after you released your "flagship" device, then most of that money was lost before you even released it. You can't spend a year on R&D, and then scrap the project, and be pissed that all your R&D money was for nothing.

I agree with some of that. However, if you've spent that much in R&D, one can hardly claim you didn't try. One company did not recover at all even when they hung their hopes on the platform. Another company lost a lot and decided to get out. I know people would like to simply say "it would have worked out in the end" but I just don't buy that. I don't think you walk away from that much money saying "yeah, I could have pulled it off, but **** it, I don't feel up to it."

Let me introduce you to a little man called Leo Apothecker...

money spent is not equal to money spent wisely. Hp seems very good at pissing it away, but not so good at planning and then implementing the plan effectively.

WebOS wasn't ready for any form factor on phones, and everyone here thinks the TP is the bees knees, so what could they do "wiser".

In fact, pretty much ALL of these "unwise" expenditures were championed around here when they were made.

LOL, like the Veer. We all knew it would flop...but who are we to think that when a cute 9-year-old is telling us it's the best webOS phone ever or when Twitter tells me my #phonestobig?

yep all of them. That's because people here are not accountable to shareholders nor do they need to run a profitable business. It's easy to ignore that you just lost 3.3 billion dollars on a product few people had an issue with in feb, april, may, june, july, or when they where praising Manny Pacquio adds or saying the Veer was flying off shelves. It's all to easy to say just spend money when it's not your money and you don't have to be accountable.

Or to claim that HP is definitely coming out with a webOS super phone that blows away the smartphone competition by establishing a technologically superior flagship and causing developers to flock to the platform.

Then the Veer shows up.

HAHAHAHAHAHAHAHAHAHA!!!

You may be right, but remember we are dealing with HP here, and I don't think that this BoD has any vision at all.

I doubt that money was really spent on R&D. $3.3 billion - $1.2 billion buying Palm = $2.1 billion in additional spending.

Todd Bradley said in August that webOS had "almost" 600 engineers; at $250k/year in salary/benefits and other overhead that's only $150M.

In 2009 Palm spent a total of $170M on R&D, $174M on sales/marketing, and $56M on administration, according to their financial reports.

So if it cost Palm $400M/year to operate, where'd HP spend the other $1.7 billion?

i'm not sure but i think HP bought palm in april of 2010 which would have put it under last year not year. Not sure if that matters. Or maybe the official date is different. not positive.

my notes say last quarter webos division had an operating loss of $332 million so i think for whatever reason hp was throwing more money at it the Palm was.

Absolutely. Pre 3 was not released yet, Touchpad killed in 2 months while Veer was a flop. So there was no opportunity to earn back the investment in the slightest.
HP had no confidence in its webOS products, lost its nerve, and projected that the losses would continue unabated. The truth is slightly more positive (at the right price, some webos devices would sell)but still very uncertain. HP could have continued to lose money on pre3 and TP (even if price adjusted to market conditions, better advertising, etc) if it pushed on. But I still think that trying for a year or two would have been preferable to pulling out from the mobile market which shows HP's weakness to every other rival out there. Plus lots of cost was likely broken contracts with carriers, manufacturers. A entire year's run of Tp and TP go, pre 3 would have had a small chance of reasonable loss rather than impulsively pulling out in months which guaranteed the 3.3 billion dollar loss.

Impulsive, you said it man! It was an impulsive move, or at least sure looks like it along with "We're going to spin off the PSG" and now they're not.

Their competitors must be loving this sideshow demonstration of just how HP is ill equipped to adjust to an emerging market ie mobile devices, and their lac of vision.

" It was an impulsive move, or at least sure looks like it along with "We're going to spin off the PSG" and now they're not."

let's do not forget about the Idiotheker's famous @it is not a sprint, it is a marathon", and that other muppet "we are going to be number one plus in tablets"

That company is being led by muppets. So unfortunate.

I don't understand this thinking that continuing on the same course they were on except for releasing a Pre 3 that carriers were not going to support (e.g. Veer, Pre 2 on Verizon) and a smaller Touchpad would result in better sales or "less of a loss".

They did sales projections based on the current performance and markdown. It would've been WORSE losing even MORE money.

There was nothing different for them to do. So staying the course was madness.

it's not "thinking" they are specifically choosing to not see what you are talking about. Again they only see a fantasy world that's never existed or looked like existing where the devices all sold well. Sadly for webos that never happened but they are not accountable so they can easily say, just keep spending, who cares if every projection shows that all webos would have done was lose more not less money.

i think if they had paid to make pre 3's the loss would have been much greater since they probably would have not sold well outside of the webos community. So merely trying to sell pre 3's doesn't mean it will make you more profitable. In fact Webos loss less this quarter then it did trying to sell touchpads at full price. stands to reason trying to sell the pre 3 at full price and failing would be more expensive too. They likely just decided to cut their losses. but bottom line webos was not selling or getting more popular.

the flip side to that argument is if you spend 3.3 billion i think it's unreasonable to expect a company with financial problems already to continue to lose like that.

3.3 bill a year is one quarter of all HP profits for the year. I and maybe if they'd sold enough at full price they'd have at least come close to breaking even. they were going the wrong direction.

And worse i think only the most jaded webos fan thinks the pre 3 would have been a commercial or financial success. i'm not saying people here would not have liked it. i'm saying those people like every webos device. Rather everyone else won't like it and they'd be in the same spot with the Pre 3 they with the pre, pre plus, pre 2, veer, pixi, touchpad. Low sales

Seriously?

They spent over one billion on the purchase. Then hired (or took on the salaries of) sales, programmers, administrative, executives and support staff.

Engineered and prototyped a number of devices... most of which didn't see the light of day (missed deadlines, etc)

Ran commercials and contracted with production and distribution channels for devices that were produced and didn't really produce anything that was not already in the pipeline except maybe the Veer and a tablet based on a previous design.

It confirms the utter incompetence of the HP management team.

How much would it cost you if agreed to take a job and proceed to take out a huge loan, buy a house in the new city, buy furniture and a new car, quit the old job, sign contracts for a utilities and services, moved the family, etc.... and then decided a month into the new job before you could even earn a decent paycheck, to bail out on the new job and give up on everything?

That is HP. I'll believe it was not possible (I'm open to that) when I see a a realistic breakdown of that 3.3billion. I'd bet you'd be surprised at what is hidden in that total (see the Olympus company in Japan)

Exactly. It is not so difficult to waste billions, if you are as big & stupid as HP is. I'd like to see the breakdown of that 3.3bln you mention, knowing the reality and the size of the team behind webOS (and they weren't exactly buying out talent from the competition since Palm's take over). I think I'd be pulling my hair out reading that list of incompetence, summarized in numbers.

I'LL TELL YOU WHAT THAT $3.3 BILLION SAYS:

1.) Absolutely poor leadership.
2.) Don't care.
3.) Had no clue what the **** they were doing with Web OS.

Bottom line is this:

I live in Houston Texas and we have a huge HP center here, and I have a couple of friends that work there. All of them are very unhappy with the company. Two of them hate it but can't leave because of the economy.

HP is a ship sinking and they all believe Meg Whitman is not the answer.

Hind sight is 20/20 but in HP's case I almost believe they either got lazy, or purposively made web os fail. I think it is the first option.

BOTTOM LINE IS THIS: HP got cocky. They thought they could break into the tablet market with a bloated sized, heavy, buggy device, that was priced way way way too high for what they were offering. Kindle fire anyone?

Amazon is loosing $3.00 per unit but you know they are going to sell millions of those little things.

That is what HP should have done. That is the only way to break ground in a heavy market.

FOOLS. Plain and simple.

Amazon might be losing $3.00 per unit, but they more than make up for it in content sales. Users only have to rent a few movies and/or buy a few books for Amazon to recoup.

HP sold the 16GB TouchPad for $99, a roughly $200 loss per unit. HP has nothing but 30% of the app revenue for each device to make the money back. That means each user would have to spend over $660 over the lifetime of their TouchPad for HP to recoup the loss. Even selling a ton of Touchstone chargers and keyboards wouldn't be enough to make that money back.

Inept Company

I wonder if that loss counts a wiping out of the value that they had previously assigned to webOS/Palm on their books. If that is the case, and quite possible, not a good sign that they are selling it or keeping it.

Based on the call that does include writing off the investment in Palm.

ouch. I knew they must have lost a good billion or so, but 3.3? Ouch.

Where is the brigade claiming that HP could make money by selling Touchpad's for $1-200 over firesale prices?

This kills that theory as that would've brought in just an extra $1-200 million to offset several BILLION in losses. This should also kill the meme that they didn't spend enough to relaunch WebOS. It should also explain the lack of "suitors".

By that math, though, even if they'd sold all of them at full price, they would have lost money. That is the definition of mis-management. The **** was doomed from the start.

No, it just means they never planned to make back their investment in WebOS by just selling their first version of the Touchpad. I'm sure they invested because they were thinking of phones, other devices, etc.

It also means they were never going to be successful if 3 billion is all they lost. WebOS needed several more billions invested to have a chance at success.

Thank you! Exactly!

Just so I can understand your point, did it need the billions because it needed to be adequately developed and marketed to sell, or because it sucked?

Nope, but the OS is just part of the platform.

A show of losses does not mean HP spent the money correctly/wisely in regards to WebOS development or advertising launches.

Just for laughs, someone should go through the past 18 months of forum posts and compile a list of all the bold proclamations WebOS users turned out to be deadly wrong about.

Sometimes you don't need to make money (profit) when you are trying to build market share. I'm of that brigade, and I know a lot of people who'd by one at those prices (like on ebay) if they believed that HP was going to keep the os alive.

HP is a big enough company that they could have kept development of the os going, including supporting app development in and out of HP (where are the thousands of HP developed apps?) if they had vision and the will to carry it out.

I'm as practical as anyone else; if something isn't making money you have to move on. But HP just pulled the plug without even really trying. Had they released Pre3 before touchpad things may have very well have been different. But they are a visionless company and like so many other american companies are only looking at the next quarters profits- not next years or next decades.

I'm not sure it was lack of trying or that they simply had no idea of what they were doing. As a windows maker, they slap the OS on and ship it. It sells. They don't have to worry about maintaining the OS, building core services or acquiring them.

When HP bought webOS, they became the provider of that OS. But they always acted like that was a foreign concept. As if webOS was a complete product that simply needed a bit of tweaking to make things work.

Did we see HP acquire anyone? Any core services to leverage such as skype, netflix, etc? Apple with itunes, MS with its vast array of services & productivity software, and google with their online apps. HP had nothing. And still has nothing.

Any big partnerships? Any big initiatives with all the obvious big name app developers? No and no.

They were never going to succeed with webOS because of this. Not because the hardware was too thick or plastic, or that the Veer was stupid. They lost their way before this by not taking webOS seriously.

This was HP the OEM trying to pretend it could package its own OS on its own hardware and be cool like apple and get apple like margins. Except they had no clue what that really involved.

Checkmate, you have a very good point, several of them actually. But the fact that they never really put any new products out is what gets me. Veer and Touchpad were already in the works so they don't count and Veer IS stupid.

"Sometimes you don't need to make money (profit) when you are trying to build market share."

That's why HP got in this business...to build market share!

Actually, no...it was to make money. There was no way to do it with WebOS. Apple has barely made $1 billion from their App Store royalties in over three years of running the most successful app store ever. If WebOS put HP even $2 billion in the hole, then they would never turn a profit since they couldn't sell WebOS devices at a profit.

App sales would be maybe a quarter of Apple's in their best of the best of the best case scenario. So spending a couple billion dollars to make a couple hundred million is pretty bad strategy any way you cut it.

You don't buy an operating system and expect to break even in such a short time.

Especially not when you advertise non existing products and don't put enough effort into performance optimizations. Even with the best efforts it would take years to pay back an investment of that size. Surely they must know this?

Umm.... I don't know what quite to say except that Leo screwed us. The plans were NOT well thought out. I could have done better on my own with my puppies

looks like in hindsight it was better to close webOS. 3.3 billion loss in one year. With that much money being spend on it, I expected webOS 3.0 to have all the features of ice cream sandwich and a tablet that was hardware wise better than samsung tab.

3.3 billion dollar loss is a gamble that did not work for HP. Some companies don't even have that type of revenue stream in a year, or a lifetime. So, what options remain for webOS? Reinvest? Opensource? Sell? License?

3.3 billion cannot be the losses last year alone. This must be a writeoff for the purchase amount as well and they are trying to shove every amount of loss into this catagory I'm sure for tax purposes.

They have stared the Conference Call, follow it at www.hp.com/investor/2011Q4webcast.

What people fail to realize is that when you book losses, you inflate the numbers using accounting tricks so you have offset your profits in other sectors and pay less taxes. Companies will often do the opposite with positive results--inflate numbers for announcements so it looks more impressive but use accounting tricks to show lower profits for tax purposes.

HP probably booked any cost mildly attributable to webOS as a loss. Everyone expected webOS to be a loss, so they don't lose share price for that. On the other hand, now costs for other sectors are lower, so they look like they have higher profitability.

Also, let's not forget that HP spent a lot of money turning a mobile phone OS into a tablet OS. Now that that is done, the costs should be lower.

I just realized I have a 3.3 billion dollar webOS Touchpad! SWEET!

webOS for the consumer is dead folks. I can't see it going on much longer with this kind of hit. I also don't see anyone outside of Apple, B&N and Amazon as having successful tablets in the consumer space. Hopefully B&N or Amazon buy or license webOS, else I would think it's coming to a close.

lol

this is way to much jargon and business language for me. Is there a pie chart or graph I can follow?

It's funny how they blame the webOS and not the idiot that made the bad decisions.

I say... Act as if it were new again, sell products and put your best foot forward. Then without placing doubt in the minds of the world see how well it does after that.

rofl. WebOS drove Palm stock down to mere dollars, cost HP 3.3 billion dollars, but, hey, there's still 1 strike left - let's try again!

Funnier how some blame everything BUT WebOS. It's this perfect, blameless product that, paradoxically, needs countless billions invested to even have a chance at success.

I'd love to see an insider's view on why WebOS is so slow on fast hardware. Why couldn't HP speed it up in the year they were working on the Touchpad?

Someone in one of the podcasts put it right. webOS was someone trying to turn your phone into a full-blown web server. Problem is, they didn't/couldn't build in all of the support one typically needs to make a web server speedy. Things like hardware acceleration, clustering, JIT compilers, serious optimizations, etc. were missing.

Having built full, desktop-level, rich clients in HTML, CSS and JavaScript that proved to be a challenge even for nicely spec'd desktops, I can understand some of the challenges the webOS engineers faced. It's a nice concept with some pretty severe limitations especially when you consider it has to run on devices that are relatively spec starved when compared to desktops and servers.

WebOS is so slow because the way it was designed. It's almost like running a web server and every app is like a website that is slow to load.

I don't ever hear that its a perfect os, or blameless. But after using other os's I'm still feeling it is the best for my needs. I used my sons iphone (he jumped ship from webOS he found out Pre3 wasn't ever arriving) and I didn't really like it very much. When I asked him how he liked it I got back "Well, there's tons of apps... But it's just not webOS even so."

I reasize fully webOS isn't perfect or even close. But with all it's imperfections I still like it the best of them all and I find myself wondering why a huge company like HP couldn't/didn't look at what the homebrew folks were doing and incorporate a little of their magic into the os and beef it up a little? Eventually I'll end up with something else, my two Pre3's will no longer be suported enough for me to ignore any longer. But I have never, NEVER been passionate enough about ANY product to join a fourm let alone read one and post to one.

I own probably a thousand tools big and small, some weighing more than a ton and plenty that I could put in my pocket. I'm highly skilled on all of them, some consider me the best there is in my trade. I'm a gadget guy, I love all this stuff; new tech and old (my metal lathe is off a navy ship from 1942 and right next to it is a 240 watt laser engraving machine built last year). My point is that the evolution of PalmOS to webOS to HP webOS was of great signifigance to me and I feel that HP really didn't give the OS a chance and certainly not the chance it and we deserved as supporters.

The problem is, you can count the number of people who are happy with WebOS and loyal to the brand on 1 hand. There's just no possible growth for the OS.

I've actually seen lots of blame being deflected away from webOS over the last couple of years. Your points are respected but I've had the opposite experience with webOS compared to other platforms than you have.

What I'll give to webOS is that it was one of the easiest to develop for. On the other hand, it was the most limiting compared to Android and iOS. Android presents the most painful development experience compared to webOS and iOS and iOS presents the most stable experience. When we build cross platform (Android and iOS) apps, the iOS version just works and we spend much more time buttoning down the Android version.

From a user point of view, it's been much of a parallel for me. webOS is the most limiting and unfortunately has most of its great features negated by its severe limitations. Android is the most inconsistent but offers the most flexibility. iOS remains the most consistent and fluid of the three.

Repeating one of my earlier posts, running a web server on your phone is a nice concept but comes with some pretty important limitations and this is one of the biggest reasons, in my opinion, that webOS always had a high probability of failing.

It got more of a chance than most new products do. You think FusionGarage's tablet products ever got the chance or resources that WebOS did? Meego? ChromeOS? Maemo? Jolicloud? Samsung's BadaOS ever get the push WebOS did?

The list of companies that have been given as many shots as Palm has and the list of operating systems that have had billions of dollars and global marketing poured into them repeatedly like WebOS has is PRETTY SLIM.

It just couldn't compete in the long run. Had every chance to. I'm sorry for you, just as I'm sorry that my investments in WebOS products were wastes of money, ultimately. Life goes on.

the only two groups that can pull in 126 billion and still lose money would be congress and HP....

ouch.

I don't think that is fare to congress...

Yeah, vastly underestimated for Congress.

HP are the kings of how to make a small fortune...invest a big fortune in something you know little about and let it die on the vine.

H = headfirst
P = plunging

Let's not forget the $12+ billion that Leo spent on that other company from the UK before he was shown the door. That was more than 4 times that HP has spent on WebOS.

They can pull WebOS out of the toilet if they want to. They know now they can't compete at the same price level as an iPad. If they go for a price margin around $300 then they'll have a hit on their hands.

I completely agree with you!

One of the problems is that in order to make a $300 tablet, they might have to produce a device that is spec'd well below the TouchPad. Then, I suspect people will complain that $300 is too much for THAT device and we're back to where we were with the TouchPad in the first place.

Regardless of the price point they come in at, the next generation TP will still be doomed to failure unless they can get their act together re the Apps selection.

They've done well with the user interface, the usability and after the OTA updates the performance as well, but without the App selection you're severely limited in what you can do with it.

If HP decides to pour more money into it, a significant amount of that money needs to go into developing Apps in-house and paying top-tier third party developers to port their most popular apps to TP. If they don't do that, the TP has no future whatsoever. Even if they could put together a profitable device that costs $300, why would anyone buy an App-less webOS device when they can buy a $300 Android device with a market of more apps than you will ever need?

I think HP fell for a good sales pitch by Palm.

Palm: "webOS is amazing. We designed it from the ground up to scale easily to ANY screen size. You'll be able to put this onto anything."

HP: "WOW! That would really work in a lot of scenarios. . . we'll take it."

After the documents are signed. . .

HP "so, when will we have a tablet ready."
Palm: "Tablet? Uh. . . we'll have to rewrite the entire OS for that."
HP "$#@#$#@$#@$#@$#@$@#$#@$@#$@#$#@ . . 3.3 BILLION!!!!!!"

I wonder if the 3.3 billion dollar loss includes Leo's Golden Parachute.

this brings me to an article posted on here that hp looks to net $300 million or son on the sale of webos. by the numbers I'm looking at here thAt would mean that they will have to sell it for $3.6 billion to be able to net that amount. I really don't see thAt happening

i think that's over the original sale price of 1.2 billion so 1.5. But honestly that seem crazy to me. they'd be lucky to get 600k and honestly i think most companies not named Google, Apple, or with a ton of cash to burn would be stupid to pay that price. That said **** if i were apple i'd pay a mill simply for the multitasking patent (assuming there is one granted) just so i could implement the U.I. without having to deal with a legal hassle from HP. Granted i firmly believe "cards" is an enforceble patent. User interface patents like that tend to be hard to protect as it looks very much like patenting an idea. But to apple it's pocket change. i do it to prevent a hassle. Then again i'd also copy it w/o a patent cause i don't think it's enforceable.

I feel in order for hp to succeed with webOS. They have to do one important thing first. Admit they failed webOS just as much as webOS failed hp.

Well perhaps HP plans on doing this- http://t.co/oEQ0e70i hahaahahahaha I don't think I've ever been happier- #HP #T3 #letsgo!!!

I'm not an expert on all this big money talk and how it all works. My question is, can they use this big loss for a tax right off? If so I have a few more questions...

i know people are hurt cause they canceled webos but if it's such a slam dunk no brainer that they should have kept going or should now restart it how come they haven't restarted them now and how come it seems line nobody is beating down the door to pay even a halfway decent price for webos? If it's a no brainer that this will make money why are there no buyers?

To lose more money?

I think whoever advised HP that buying Palm was a good idea needs to be fired. It wasn't hard to predict that WebOS was doomed for failure and I was one of those that got a Palm Pre on day one. After one year decided to jump ship because it was obvious that the platform was doomed. It is slow, buggy, and lacks so much features. I don't think Webos is even capable of being as speedy as the other operating systems and the apps are mostly terrible.

WebOS is a nice idea and multitasking is simple but the implementation was terrible.

If you read the entire text of the statement, only $2.1 billion of the loss is given as related to WebOS. $1.2 billion of that is the purchase of Palm.

There's no discussion of the value of Palm massive smartphone patent portfolio, either, but if HP wants to recoup some of its losses, they could bundle that with WebOS. I still think they'd be smarter to keep it, optimize it for dramatically better performance, and re-enter the market for mobile devices with a high level of integration with their enterprise services (where they ARE making dramatic sales gains and profits, thus at least partially validating Apothekar's strategy)

Again with the bundles? What is it with bundles around here? Don't you know that bundles are simply a way of clouding the value proposition for the consumer?

I don't think corporations fall for it. Want the patent portfolio for $200 million? How about I throw in webOS for another $250 million? It's a steal.

"There's no discussion of the value of Palm massive smartphone patent portfolio, either"

Clearly not that massive, as the "intangables" cover the patents, so whatever they were worth in the past, the value of WebOS + Patents is @$350 million.

Steve Jobs himself said that Palm made good software. And right before he died he was disappointed of how HP and the board ran themselves in the ground with very bad decisions from someone who didn't know what they were doing.

Seems to me they didn't know what they were doing when they bought it and ran off all the good talent they had. Believe me businesses do stupid stuff all the time, break the rules even federal ones. they care about the bottom line not really in perfection. Sometimes to achieve that you have to fail a little.

The first Google phone wasn't a total hit. the past Motorola phones didn't fly. Sony made the some of the first larger phones only no one could afford them.

HP need to retain the talent they have left and get the best out there and rework and rename webOS and be prepare to spend money to relaunch.

So that's what all of that scale can get you?

dpaus wrote:

> optimize it for dramatically better performance

By demonstration, this is tough. webOS jumps a notch or two up the ladder of abstraction. Optimization to grab a big chunk of performance win is tough. Important, of course, but tough. Either way, it really needs leading/bleeding edge hardware to match the performance of other mobile OSes.

Palm couldn't afford to give it that class of hardware. HP could've done it, but they lacked the brains/guts to pull the trigger on that sort of design decision.

If it stays with HP and lives, or someone buys it, a commitment to high-powered hardware will be required to make it snappy snappy quick snappy, without any of those hesitations/lags we who use it know well.

"Hewlett and Packard built a great company; and they thought they had left it in good hands. But now it is being dismembered and destroyed. It is tragic. I hope I have left a stronger legacy so that will never happen to Apple," August '11, official biography of Steve Jobs.