A tale of two failures: Microsoft's Kin and HP's TouchPad

A tale of two failures: Microsoft's Kin and HP's TouchPad

Summary: Last year, Microsoft pulled the plug on its Kin phone after only seven weeks. HP just discontinued its TouchPad after even a shorter lifespan. It's embarrassing to fail so quickly and in such spectacular fashion, but the hidden costs are much more profound for both companies.

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HP’s bombshell announcement that it will “discontinue operations” for WebOS devices, most notably the TouchPad tablet, inspired immediate comparisons with Microsoft’s disastrous mobile phone, the Kin. Indeed, there are striking similarities:

  • The Kin was on sale for 55 days, from May 6, 2010, when it was first available for purchase online, until Microsoft pulled the plug on June 30. The TouchPad went on sale on July 1, 2011, and lasted until August 18, giving it 49 days on the market. HP wins that Dubious Achievement award, narrowly.
  • Microsoft paid approximately $500 million for Danger in 2008. HP paid $1.2 billion for Palm last year.
  • Microsoft took a $240 million writeoff for shutting down Kin. Because of the current inflated market for patents, HP might be able to recover its purchase price by selling Palm’s potentially valuable patent portfolio.

But none of those numbers really matter in the final analysis. For both Microsoft and HP, there were much more significant intangible costs associated with these high-profile failures.

It’s embarrassing to fail so quickly and in such spectacular fashion. In the case of Kin, the failure was with a niche product aimed at a youth market. In HP’s case, the humiliation is much more profound. HP had literally bet the company on WebOS. In the press release announcing the Palm acquisition, HP bragged that “Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy.”

And HP had big dreams for WebOS. In March—less than six months ago—HP CEO Leo Apotheker talked about the “massive platform” opportunities for WebOS. According to Business Week, Apotheker had a grand vision: “Starting next year, every one of the PCs shipped by HP will include the ability to run WebOS in addition to Microsoft Corp.’s Windows.” Now, with HP's announcement that it plans to spin off its PC business, there’s a good chance the company won’t even be shipping PCs at the end of 2012.

But for Microsoft and HP alike, the worst writeoff of all is the opportunity cost associated with their respective failed ventures. Microsoft sunk two years of precious development resources into Kin while Windows Mobile was failing. During that same period, Apple's iPhone was thriving and Google's Android platform was gaining critical momentum.

Microsoft CEO Steve Ballmer admitted in a September 2010 interview that the Kin project “just defocused activity from Windows Phone.” Nearly a year later, Windows Phone is still struggling to gain traction in the marketplace.

In HP’s case, it’s too early to assess how much damage this wrong turn caused. But the fact that Apotheker and HP’s board feel compelled to exit the PC business—its onetime core—suggests that the ultimate cost will be very high indeed.

See also:

Topics: Hewlett-Packard, Microsoft, Mobile OS, Operating Systems

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50 comments
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  • ChromeBook will soon make it 3-stooge complete

    These products are such blunders that they belong to the "how come you failed to see it coming" category.
    LBiege
    • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

      @LBiege
      +1.
      Ram U
      • Wrong......

        @Rama.NET
        If the hardware for a Chromebook can be lowered, corporations and government would buy these by the trainfulls. Most workers need only need basic apps and email and all these can be managed easier than any Windows systems using complicated policies, lockdowns, reimaging, etc...

        Chromebook does work, needs to be just a bit less expensive.
        linux for me
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @linux for me
        Nah, the Chromebook is a non-starter. Too much dependence on having web access all the time. A lack of standardized applications for business. Way too expensive for what it is. Businesses will stay away from it like the plague.
        boomchuck1
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @linux for me

        I disagree. If I'm going to carry around a laptop-format device, why would I choose one that only does web browsing? It's not only about the money, it's also about utility and convenience. Carrying around a device with all the disadvantages of a laptop, and making it only single-purpose, makes no sense to me no matter how cheap you make it - I wouldn't carry a Chromebook if it were free.
        1DaveN
  • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

    Ed
    Comparing Kin to Touchpad? Well there were failures with the Touchpad design. But you should compare Kin to Vista
    loidab
    • Seriously?

      @loidab

      Vista sold a lot of copies. It had serious problems, some real and others artificial, but it wasn't pulled off the market in seven weeks.

      Sheesh.
      Ed Bott
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Ed Bott

        I have to agree... didn't Vista at one time hold ~20% desktop marketshare?

        Given the magnitude of desktop #'s... I think the only one who'd call that a fail are ABM fanboys.
        UrNotPayingAttention
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Ed Bott : define "sold a lot of copies" - box sets off the shelf or bundled with all new PCs?.
        i see you are keeping up to date with criticizing MS for its BPOS outages like you keep up to date with Apple and Google problems.
        deaf_e_kate
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Ed Bott Didn?t Microsoft just re-release the Kin? Windows phone 7 is basically an updated version of the KinOS.
        Rick_Kl
      • Easy to do when.....

        @Ed Bott
        It is forced on every computer on the shelf.
        linux for me
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Linux Folk

        Can you drop the "It was forced..." crap? OEM's are no way "forced" to use Windows, and consumers are in no way forced to use Windows either. The TP to Vista comparison is flawed.
        The one and only, Cylon Centurion
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Ed Bott

        I disagree. Vista came bundled on a lot of PCs to unsuspecting consumers who would rather have had XP. Public and OEM outcry over the Vista debacle convinced M$ to continue to allow XP on OEM machines, but not after a lot of people got burned. Very few people went out specifically to GET VISTA. As near as I can tell, Vista was Windows 7 Beta, (and Windows 7 is still doing some strange things in my shop even after SP1.) Vista is what happens when software is written by committee.
        mlashinsky@...
      • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

        @Ed Bott I'm with you on this one Ed. Can you say Mojave Experiment. Vista didn't go away. It got polished and relabelled Windows 7. I still have systems running patched Vista as there isn't enough difference to make the move to Windows 7 worth it.

        For all it's faults Vista got the majority moved from 32 to 64 bit systems, so I would hardly call it a failure.
        sbf95070
    • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

      @loidab
      Sheesh, Vista was never pulled from the market in 6 to 7 weeks and there are PCs that are being sold with Vista installed. Please compare Apples to Apples.
      Ram U
    • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

      @loidab That would be an inaccurate comparison as Vista (steaming pile of crapware that it was) was not pulled from the market. The Kin to TouchPad comparison is much more accurate due to both being mobile devices and both having failed despite the large amount of hype.

      It's unfortunate about the Touchpad and HP's decision to leave the PC market.
      athynz
    • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

      @loidab If touchpad sold as many units as Vista HP would be king of the hill right now.
      chrome188
  • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

    These failures are just rewards for MS and HP when they try to dabble in areas in which they do not have long-term competence. For HP, the failure is even worse--they have announced leaving the PC marketplace. Based on past performance, they need to announce leaving the PC peripheral marketplace too. What used to be, back in the 1970s, HP made solid and reliable printers and other peripherals. Over time, however, they have made a corporate decision to no longer do that. All is not lost...Canon, Lexmark, Brother, XEROX, etc are more than willing and able to take over that marketplace.
    TsarNikky
    • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

      @TsarNikky

      Who were you listening to? IPG is up and doing well YoY, and they always expect to ride high of Q1. It's very seasonal, and that's why no one is serious comparing their Q2 to Q1. The PC business is $40 billion in revenue per year, and it's not going away. Hopefully, it will simply no longer be mismanaged by a board and senior management that have only cared about enterprise anyway for 20 years. What press release were you reading?

      I've purchased HP computers in the last few years, but it involved creating a login attached to a discount tier, entering promo codes, preferred buyer codes, etc. EACH purchase involved at least FIVE separate discounts. I couldn't even GUESS what the final price would be until I got to the final page of the checkout. HP spinning of PSG is a good move.
      tkejlboom
  • RE: A tale of two failures: Microsoft's Kin and HP's TouchPad

    Are you kidding? HP didn't bet the whole company on WebOS. Look at their acquisition history in the last 3 years. WebOS was just another small bet; a high-profile bet, but a small one just the same. I doubt they even significantly changed PC operations based on Palm, or integrated the PC and Palm teams.
    longde