HP's master plan: Put WebOS in stasis until PC unit is spun off

HP's master plan: Put WebOS in stasis until PC unit is spun off

Summary: HP's plan appears to be to develop WebOS just enough to keep people interested and then pack it into stasis to buy time for the PC unit to be spun off.

SHARE:

If you're confused about the future of HP's WebOS you're forgiven. The company's messaging isn't exactly clarifying much, but the fire sale of the Touchpad, which took on a life of its own, may yield some opportunity.

Ultimately, HP is trying to license, optimize or monetize WebOS. Those aspirations mean that HP's fire sale on the TouchPad could be a nice jump start. WebOS will have some traction---even if HP loses lots of dough on TouchPads and smartphones. If HP sticks with using WebOS on printers and PCs then there's an installed base to appeal to a potential buyer or licensee.

In other words, WebOS has enough traction to open source or potentially license. It's unclear what company would bet on WebOS, but rest assured that HP's possibly-spun-off PC unit would be a likely candidate. HP could spin off the PC business and that independent company could hop back into the tablet race. Jason Perlow also speculated that Amazon could be a fit with a WebOS tablet. That possibility isn't the worst idea out there.

Add it up and HP may have some method to its abundance of madness. However, right now there appears to be a lot more madness than method.

But by keeping WebOS somewhat alive, HP has a chance to monetize it.

Also see: Palm. HP. Who owns WebOS next?

So how's HP doing? Well, a lot more people know about WebOS than they did just a week ago. HP's bombshell announcements that it may spin off the PC unit, discontinue the TouchPad and buy Autonomy put the company front and center of the news cycle. Toss in fire sale frenzy over the weekend and HP generated more buzz for its TouchPad and WebOS than it ever could before.

So what's HP going to do with WebOS? Got me. Frankly, I'd be shocked if HP knows. If HP did have a solid plan you'd think they'd communicate it better than they have so far. Given recent statements from HP you'd think they were trying to throw us off the WebOS trail.

HP CEO Leo Apotheker said last week on HP's earnings and transformation conference call:

We know that many developers feel the operating system is elegantly designed and is a respected platform. Therefore, we are exploring options for how best to optimize the value of webOS software going forward. However, our webOS devices have not gained enough traction in the marketplace with consumers and we see too long a ramp-up in the market share.

Due to market dynamics, significant competition, and a rapidly changing environment and this week's news only reiterates the speed and nature of this change, continuing to execute our current device approach in this market space is no longer in the best interest of HP and HP shareholders.

Therefore, we have made a difficult but necessary decision to shut down webOS hardware operations within Q4 2011. Transformation can involve difficult decisions, but we take these steps to better position for the future.

Parsing that statement, HP seems to think that WebOS can live on without hardware. The problem: HP is the only one that makes WebOS-based hardware. Talk about tricky.

Shortly after Apotheker spoke, HP said on its Palm blog that the death of WebOS was greatly exaggerated. HP didn't bury WebOS, but wanted to "ensure the platform's evolution."

No one quite bought that line.

But now it appears that the WebOS will live on via that Pre 3 smartphone---at least in France and the United Kingdom. Meanwhile, HP will use WebOS on printers and PCs, which will ultimately be spun off. Ina Fried at AllThingsD reports that HP justifies the PC-WebOS connection because the company is the only one making devices with the operating system. That's why HP will continue to churn out TouchPads in a fire sale until it empties its supply chain and component commitments.

WebOS chief Stephen DeWitt told AllThingsD that WebOS will live on in all kinds of connected devices. In other words, WebOS is not dead.

Given these somewhat crazy crosscurrents at HP, we can only guess at WebOS master plan. As a public service to HP, I pieced together parts of WebOS puzzle to hand the company a potential master plan (someone needs to have one). Here's the plan:

  1. Kill WebOS hardware.
  2. Keep WebOS software viable via PCs and printers so there's a potential ecosystem there. Perhaps you blow up the tablet market with cheap TouchPads for a month or so.
  3. Spin off the PC unit in 12 to 18 months. Either license WebOS or send it packing with the now independent unit. The latter is the most likely outcome.
  4. This independent unit would have to play in the tablet market somehow and WebOS would be revived.
  5. WebOS would have a base of cult followers.
  6. The new PC company takes on the risk of new tablets, WebOS 4.0 and makes a go of it with some help from the open source community.
  7. Perhaps, HP's PC spin off becomes a WebOS tablet player. Or it flops. Either way it's off HP's books going forward.

Sound convoluted? You bet. But that appears to where HP is trying to wind up. The goal: Put WebOS into stasis to buy time for the PC unit to be spun off.

Also:

Related:

Topics: Hardware, Hewlett-Packard, Mobile OS, Mobility, Operating Systems, Tablets

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

65 comments
Log in or register to join the discussion
  • It's all about the accounting

    HP paid a billion dollars for WebOS. Most of that billion is on the balance sheet as Goodwill. So long as management continues to insist it has value, the accountants will leave it there. But should they sell it for less than a billion (most likely a <I>lot</I> less than a billion), the difference will move to the income statement as a loss.<br><br>They are already going to take a two or three hundred million bath on the TouchPad. That's enough red ink for one quarter. They'll postpone the loss on WebOS for as long as they can, but the Street analysts aren't stupid... They know it's sitting there on the balance sheet waiting to turn some future quarter into a mess. So they (and the regulators) will be goading Apotheker to take his lumps and move on. But not this quarter.
    Robert Hahn
  • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

    Given the going rate for patents these days I doubt that HP will be taking a loss on the sale. It seems to me that HP had decided to spin off the PSG and did not see the need in sinking more money in to webOS for what would be a short term position and outside any time frame that would allow for a recovery of the investment.
    jjacobs3
  • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

    The plan sounds good until you get to the "spin off in 12-18 months". If it takes *that* long, then WebOS will die. That's far too long to be in limbo. They'd better get a sale done by year's end, for this to pay off in any way.

    Yeah, I know about the patents, but they won't help WebOS live on by themselves... And the hardware business will be worth much more with both the patents and a viable mobile OS.

    -ASB: http://XeeMe.com/AndrewBaker
    ASBzone
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @ASBzone whether it takes 12-18 months or 12-18 hours, WebOS is dead. If you think otherwise I have this really nice computer with phenomenal graphics and great sound for you. It's called Amiga.

      WebOS died when HP abandoned it. Spending ANY money to get the rights to it now would be insane. HP might Open Source it, but I doubt it. It'll go with the PC division, they'll pay lip-service to it for about 12 months, and then it will never be heard from again.
      terjeb@...
  • What if this was...

    What if, this was manufactured? What if HP seeing the dying sales said, "we are sure it Will sell if we can get people to use it?" And they manufactured this whole scenario to avoid dumping charges while building a Developer and User Base?<br><br>Or, what if they were thinking, Google now has hardware, let's ditch ours and get OEMs to build phones and tablets running the OS?<br><br>Both of these are possible scenarios and you have just created a potential market for this OS.
    slickjim
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @Peter Perry

      It would be a nice addition for Nokia. But Nokia is stuck like chuck.
      Return_of_the_jedi
      • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

        @Return_of_the_jedi - LOL... sad but true, and kinda funny.
        Big Daddy D
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @Peter Perry

      If their master plan was to build a developer base by killing off the hardware it's failing miserably. I'm certain that a few diehards might hang around and hope that things work out for the best, but more sensible developers have already started moving on. Microsoft alone has already had 1000+ (and counting) developers express interest in developing for WP7 instead.

      It is possible that they saw an opportunity with Google potentially moving into the hardware space so they could offer a truly unencumbered OS for current Android handset makers. Why not make that announcement at the same time then? <b>That</b> would have been interesting.

      At best, they have created uncertainty. At worst, they have no clue what they are going to do with webOS. More likely, they are going to kill it. If something good manages to come from this situation it will be due to dumb luck, not some brilliant master plan.
      Rich Miles
      • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

        @Rich Miles - You said, "Microsoft alone has already had 1000+ (and counting) developers express interest in developing for WP7 instead." This is not exactly/necessarily correct. Erase the word "instead" and you will have an accurate statement. You have no idea how many people responded to that email out of interest in the offer to develop *also* for WP7, not to the exclusion of webOS necessarily. Additionally, a good number of those emails could also be due to developer interest who happened to see the tweet, but never developed with webOS at all, or spam, or... well, you get the point.

        Additionally, your assertion that developers are abandoning ship is rather absurd. Since the firesale, app purchases have spiked exponentially. Devs are publicly stating their support positions, with some even announcing plans for new apps. It's way too early to predict what devs are going to do here, especially with such a rapidly-expanded user base.
        Big Daddy D
      • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

        @Rich Miles

        microsoft's offer was so widely received because they initially offered to give a free phone. The caveat in their offer (in addition to seemingly being fairly informal) was the respondants were supposed to have a published app. That's a large caveat that would probably eliminate many who responded, though I don't know how you prove this given that HP doesn't seem to control the app / developer names as well as Apple.
        danekan
      • I think WebOS developers are jumping ship...

        I viewed some WebOS forums yesterday (such as https://developer.palm.com/distribution/viewtopic.php?f=5&t=17510 ) - and at that time the postings seemed to indicate many thought further effort was hopeless. If you are interested, look around at https://developer.palm.com/distribution/viewforum.php?f=21 for more discussion.
        randysmith@...
      • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

        @tobeaman

        I admit that my use of "instead' might not be entirely accurate, but I stand by the gist of my post that webOS developers are leaving. Only a fool would continue to develop for webOS under the current circumstances (outside of personal use).

        Of course app purchases spiked. How long do you expect that to last? After the firesale devices have been delivered, the only direction app sales can go is down -- at least with no new hardware or partners.

        Incidentally, here is an unscientific poll from the webOS forums (arguably, the most fanatical supporters) stating that only 64% of developers are "staying".

        https://developer.palm.com/distribution/viewtopic.php?f=21&t=17539
        Rich Miles
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @Peter Perry

      Build a Developer and user base it's the side effect of the big sell out that will cost HP millions to compensate. If HP really wanted to have a big community then why they don't just lowered their prices and keep the support?. That would be a better way to spread the system.
      RenzoAC
      • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

        @RenzoAC Support would be a cost center, not a revenue generating machine. By killing support it will in some way offset the loss due to the price reduction.
        brentroger
  • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

    I've put money away for my webOS printer, webOS desktop, and three webOS laptops. Still hoping a webOS(slab) phone is in the future. Loving my 32GB(82GB with Box) Touchpad, that now has cost me only $99.00 with all credits and discounts. Will have interactive QuickOffice by the end of the week. I'm stoked, baby!!
    Detfan
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @Detfan I have this really, really cool computer for you, it even works on your TV. It is great. It's only $299 for a limited amount of time. I know you have heard of it, people all agree that it is great. It's called Amiga.
      terjeb@...
  • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

    This is the first article I've read suggesting this is an elaborate gambit by HP. Given their blunders with WebOS so far, it is difficult to accept they are doing this on purpose. Certainly anyone who uses WebOS for any length of time recognizes it is better than anything else out there. If HP is scheming for an advantage, part of the plan requires consumers play with WebOS. Under the current conditions, although some users are buying, it appears more marketeers are snapping up stock for perceived resale value. Would this sabotage HP's plan?
    michaelfish
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @michaelfish I'm not suggesting some gambit, but this appears to be the plan HP is falling into---intentionally or not who knows.
      Larry Dignan
  • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

    They should just kill it off. Nobody will take it after what HP did.
    The one and only, Cylon Centurion
    • RE: HP's master plan: Put WebOS in stasis until PC unit is spun off

      @Cylon Centurion - Nobody? Hmmm... about 250,000 nobodies are scarfing it up like it's candy.
      Big Daddy D