HP's decision to kill its webOS device business

webosHP had big plans for the webOS platform, which the company inherited when HP bought Palm for $1.2 billion in 2010. However, the company's lack of commitment to the platform-as well as the chicken-or-egg failure of the platform to catch fire with developers-ultimately doomed webOS as a viable smartphone and tablet platform.

With webOS, former HP CEO Leo Apotheker said the computer maker wanted to steal Apple's (NASDAQ:AAPL) "cool" factor. He also said HP wanted to scale up the webOS ecosystem by shipping 100 million webOS-enabled products per year, including smartphones, tablets, PCs and printers.

After months of buildup, in February HP unveiled the TouchPad, a confident challenge to Apple's iPad. The computer maker also unveiled two new webOS smartphones, the Pre3 and the smaller Veer. Things seemed promising when AT&T Mobility (NYSE:T) agreed to launch the Veer as well as a version of the TouchPad with cellular connectivity. Shortly thereafter, HP confirmed it was in talks with multiple unnamed companies to license the platform, and Samsung was mentioned as a possibility, but the talks proved fruitless and also served to underscore uncertainty about the platform's prospects.

The summer would prove to be webOS' undoing. The Wi-Fi version of the TouchPad went on sale July 1 amid a flurry of mixed reviews and the revelation that HP would soon deliver a software update to correct some bugs. The company immediately began repositioning the TouchPad as an enterprise device as less as an iPad killer. Shortly thereafter, HP reorganized its webOS leadership team, moving former Palm CEO Jon Rubinstein away from less direct control over the platform.   

On Aug. 17, AllThingsD reported that the TouchPad was failing to gain traction in the market, especially at big box retailer Best Buy. A day later, just 16 months after it bought Palm, HP killed its webOS device business. The next few months would be tumultuous. HP resurrected the TouchPad at fire-sale prices to clear inventory, and speculation swirled over whether companies like Amazon.com would take webOS off HP's hands.

As of earlier this month, HP was still undecided as to the fate of webOS. Admittedly, selling webOS has proved immensely difficult, for both Palm and HP. A lack of developers and applications made the devices unappealing to mass audiences, which in turn made developers wary of supporting the platform. However, HP's decision to kill its webOS device business just weeks after the high-profile launch of the TouchPad is indicative of how the company mismanaged both expectations for the business and the platform itself.


HP's decision to kill its webOS device business