HP's Whitman: 'We have to offer a smartphone'

HP's Whitman: 'We have to offer a smartphone'

Summary: HP's Meg Whitman says the company has to offer a smartphone, despite the computing giant's move to ditch its webOS smartphone range last year.

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HP chief executive Meg Whitman said during an interview with Fox Business Network that the PC giant is "working on" getting a new smartphone on the market.

The firm previously had a range of Windows Mobile devices on offer for consumers and enterprises, but ditched the ailing operating system in favor of Palm, which was bought by HP in 2010. But in the face of the post-PC world, where smartphones and tablets are ruling the roost, Whitman hinted that the company will build something from scratch.

"We have to ultimately offer a smartphone because in many countries of the world that would be your first computing device," reports Dow Jones wires. "We are a computing company."

Surely Research in Motion's BlackBerry is a catch for the PC maker, with a low price and still strong sales in the emerging and developing markets? Whitman thinks not, however. When asked if RIM would be a suitable company to buy either in part or in full, Whitman replied: "No, that is not a direction that we're going to head."

Smartphones have not fared well in HP's history. Following slow sales and device releases that failed to compete in the face of the iPhone and Android devices -- and even back then, BlackBerry handsets -- the previous leadership set about unravelling its PC and phone unit in a bid to generate profit once again.

Former HP CEO Léo Apotheker said it would sell off the firm's Personal Systems Group, the division that makes its PC products and webOS-based smartphones. The world's largest PC maker cut 500 jobs at its webOS division in 2011 following the news. 

HP ultimately reversed the decision, keeping its consumer electronics and PCs on the go, but ditched Palm and webOS for the open-source scrapheap. 

The PC giant also said earlier this year said it would cut 27,000 jobs -- or around 8 percent of its workforce -- in a bit to restructure the company as it aims to recover its bottom line. In saving $3--3.5 billion, it will be invested in the firm's research and development.

Whitman said in the interview that HP was around 20 percent of the way through the five-year global restructuring plan, and expects flat business and slow growth for the coming fiscal year.

Topics: Hewlett-Packard, Enterprise Software, Mobile OS, BlackBerry, Smartphones

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27 comments
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  • “Eventually” = “Yesterday”

    I keep thinking of minicomputer companies back in the 1980s saying “we have to offer a PC eventually”. Anybody remember what happened to them? They all went extinct. YOU DO NOT HAVE TIME TO HEM AND HAW AND FART AROUND, PEOPLE! You need to make the decision to jump into the mobile market NOW!

    And don’t try to approach it defensively (as Microsoft is desperately trying to do), trying to stop it from cannibalizing your existing product lines. If necessary, dump your entire PC business—it’s not bringing in that much money anyway, you’ve already admitted as much. You were savvy enough back in the late 1970s and early 1980s to make the jump from an electronic instrumentation company to being one that made PCs and printers; you now need to be equally brave about sacrificing those legacy businesses if you want to survive for another couple of decades.

    With or without you, the future has already started.
    ldo17
    • They're still here

      In fairness, the #2 minicomputer company is still with us. It was HP, with their 2000 series scientific minis and 3000 line of business minis. They entered the PC business, got their hands chopped off (as did everyone whose initials were not I-B-M) and then had the good sense to sneak into the computer stores disguised as a printer company. That's how they weathered the storm, and why they were still here to buy Digital's ashes as part of the Compaq purchase.
      Robert Hahn
      • HP is a yo-yo with a frayed string. Are you buying, selling or holding?

        CEO N: Acquires Compaq (including the ashes of DEC).

        CEO N+1: Acquires Palm/WebOS, gets into some trouble and makes his escape to Oracle.

        CEO N+2: Goes on a worldwide tour (exclusive of the U.S.) because of SAP v. Oracle, cancels WebOS-based mobile device production and talks about dumping the PC business because there's no money in it (even with crapware!). Then gets dumped.

        CEO N+3: Open-sources WebOS ('cuz nobody wants to buy Palm/WebOS from HP), lays off a good bit of the original Palm/WebOS staff, consolidates PC and printer business units and says that the PC business, *including mobile*, is an essential part of HPs core business ('cuz nobody wants to buy HP's PC business).

        Has HP's PC business unit become what's known as a loss leader? Why doesn't HP take an intermediate step, dump the consumer portion of their PC business unit and concentrate solely on the enterprise (they can still sell PCs directly to small business customers at Staples, Office Depot, Office Max, etc.)?

        P.S. The itanium decision from HP v. Oracle buys HP (and, especially, HP's itanium customers) a little time, but won't save them.
        Rabid Howler Monkey
        • That was what Apotheker was hired for...

          Apotheker was hired to make HP an enterprise focused services company. This would have involved selling desktops/servers to enterprises, but focusing on the Value add services around them. Much like IBM does now.

          The moment he took the first steps, they let him go. The board was too timid to go through with their own plan.
          addicted4444
        • HP: a leader in small computer, albeit a manic-depressive one

          HP was first and foremost an instrumentation company that got into the computer business in 1966 in order to support its various electronics measuring devices.

          While it may come as a surprise to an Apple or even an Altair user from the 1970s, they created the first mass-produced and mass-marketed personal computer in 1968, but as you can guess, it didn't go well and the business was quickly shelved. Later, when Steve Wozniak designed the first Apple computer while employed at HP, they had first right of refusal and turned it down.

          While that may seem like ancient history (and it is) it's fair to point out to illustrate that HP has never been a company that has been a steady hand in the personal computer market, and it looks like it is an embedded culture over there no matter the CEO or the board. That in mind, I don't expect them to do very much with a smartphone, and even if they do, they won't continue to iterate their product to any point where it is a global standard.
          Charles Boyer
    • Palm....

      Call me naive, but if HP were to revive the Palm name, improve the OS so that its competitive (the OS has great bones) and offers a competent range of smartphones. I would've bought the 3.6" screen Palm 3 if Verizon had released it. Do a 4" version of the screen with a better keyboard and hard/software and Palm could be competent again. There is sort of a cult following. I was surprised that HP dumped them as quick as they did. Bad business descision, I think.
      DroidudeAZ
      • Really?

        So in other words, if HP made a Palm-branded phone that was nothing like any previous Palm device and using an OS that is nothing like the PalmOS was, you would buy it, because it would be called "Palm?"

        You're right about one thing "There is sort of a cult following." Cults usually thrive on the backs of people who make irrational decisions.
        daftkey
        • What phone OS?

          HP has two options regarding the smartphone business:
          - either use a big OS: Android or WP8
          - build their own stuff

          Unlike the situation a few years ago, smartphones require an ecosystem of ISV to build apps. It's hard to create an ecosystem, even if you are Microsoft, much less if you are a total newcomer.

          I guess it would be more profitable to use Samsung's business model: don't have your own OS for smartphones. Otherwise, buy RIM and merge BB10 in webOS - starting from the scratch is a no go...
          JonSawyer
  • Ha, HP, you are never getting my phone business again

    But than, lets be honest here, with the exception of Toshiba/Fujitsu(they make magnificent phones, japan only though) the traditional PC company make pretty bad phones.

    I don't know about the Lenovo phones (never used them), but besides HP, Dell made horrid phones, and Acer simply "phoned" it in.
    the_tyrant
    • Lenovo phones are awesome

      and you forgot Sony and Panasonic
      polarcat
  • HP is pathetic!

    When they bought and dumped Palm they completely blew it!!! Personally, I'm not buying any HP products agian if I can help it.
    rkd7777
  • Whitman and HP

    World to Whitman 'No you don't.'
    inetcnslt@...
  • Why Meg?

    Why would you want to enter such a competitive market as smartphones. Did you not buy Palm at a fire sale because they failed to keep up? Has RIM not taught you anything? Has Microsoft and Nokia not shown how even mega giants cannot be guaranteed success in the smartphone market? Meg are you even a good CEO?
    jscott418-22447200638980614791982928182376
    • The broad product line story

      When you get to be the size of HP, you can build a credible forecast for a few million of anything, even if all you ever do is sell them to your friends. Buy some private-label phone, slap the HP logo on it, and peddle them as part of a cloud-to-pocket "solution" for big companies. As long as you don't have fantasies of displacing Samsung as the handset volume leader (which means not spending on ads as though you think you might), you can make money at it. I presume that's all Whitman intends.

      The securities analysts know that motion is easy money, that's why they're pushing for it.
      Robert Hahn
  • Whittman: Why? To keep up with the Joneses?

    You've already proven that you don't know the consumer market in anything but printers, and even there you've had your lunch nibbled away bit by bit. Your new touch computers are a laugh, and for all your investments in mobile tech, you have nothing to show for it.

    Stay in enterprise server, enterprise printing, and health care. You know those markets and serve them well - and they aren't going anywhere fast. Oh and guess what - you may even eke out more than a 5% margin on your hardware that way.
    daftkey
  • Palm - renew or open source it already

    I think the WebOS can come back from the ashes. It needs some new hardware to support it and just go for it.
    mikebellman
  • HP, If "We Have To" Is Your Sole Reason...

    Then you clearly should stay away from this market.
    Aside from making a "me too" device, nothing good will come out of this.

    Sorry but this is the sad truth.
    TheCyberKnight
  • they need to differentiate

    If HP sorted its brands out it could make some serious earnings here. For example if Hewlett-Packard was restricted to printers, Compaq for consumer tablet/ultrabook/desktop, DEC resurrected for servers and a new brand acquired for phones or dreamt up (given their history here acquire would be the best option) then ...

    They could make printers work with all Windows 8 powered devices, Android devices and iOS (maybe) but keep extra features/functionality for their own Windows 8 devices. The same idea as how Microsoft release software on different platforms but have better integration etc on Windows.

    They could then build up the brands as they are more focused, Compaq would be the main consumer brand so bypassing all the bad PR the HP brand has received over the last couple of years, with DEC bringing back memories and becoming the techie brand in the I.T. depts.

    As for the phones, again make them have extra integration with the Compaq devices, tap into HP phone specific apps running on DEC servers, the same idea how Nokia have exclusive apps tapping into their NavTeq services, as Microsoft do with the Office integration from phone to 2012 with SharePoint etc. They could even release a phone branded Compaq iPaq, Apple couldn't sue as they used this brand on Windows Mobile powered devices before the iPhone or iOS were even invented, its called prior art.

    This would all result in HP setting themselves apart from the competition, with services (reducing their reliance on the PC/Printers division) and integrating all their products into a better vertical integrated solution.

    This is what they should do, but seeing as the once mighty & respectful HP became obsessed with profit generation, market-share and slashed its R&D budget (very silly idea) it really has to refresh the entire board to get back on track.

    I have more chance of getting dandruff & nits, I'm bald by the way.
    frazelamont
  • Said it all.

    "We have to ultimately offer a smartphone...". Whitman's statement says it all. For HP, making smart phones is just one more thing they have to do. It isn't any attempt on HP's part to change the world, or even this product category. It's just one more thing on their to-do list. And this is exactly why HP is in trouble.

    HP, they need a shorter to-do list and longer vision.
    z2217
    • I got this idea that HP is going Microsoft platforms on future phones

      Whitman's comments pretty much suggests that HP will ship the Windows Phone platform products
      CyberGuerilla