Retaining WebOS best option for HP

Tablet strategy a must for PC makers and owning mobile operating system will give control to Hewlett-Packard, says analyst.
Written by Liau Yun Qing, Contributor

Keeping the WebOS mobile operating system (OS) will be a wise move for Hewlett-Packard because a tablet strategy is a must for PC makers and selling the platform at a loss will not prove a favorable sign for shareholders.

In a phone interview with ZDNet Asia, Michael Kauh, research analyst at Canalys, said the current PC market is competitive and "very difficult to survive" by offering only traditional desktops or mobile computers. Therefore, a tablet strategy is necessary for PC makers to compete in the market, he said.

Kauh pointed to how Apple's iPad had contributed to the company's revenues. The tablets reportedly accounted for US$6.9 billion of Cupertino's US$28.27 billion revenues in its final fiscal quarter of 2011.

While HP last month announced it would retain its PC unit, it has yet to decide if it would do the same for the WebOS. The company, under the reign of then-CEO Leo Apotheker, had announced plans to halt operations for WebOS devices and sell off its personal computer business. When Meg Whitman took over as CEO in September, she overturned the move to offload the PC unit but left the fate of the WebOS unit in limbo.

Kauh noted that it would be expensive for HP to maintain WebOS as a platform when it had discontinued production of such devices. Hence, if it does decide to keep the OS, it will need to offer products to generate sufficient profits in this space, he said.

Best for HP to own ecosystem
If HP decides to offload WebOS, it will have the option of running its tablets on either Google Android or Microsoft Windows 8.

However, Kauh underscored that it would be "very important" for HP to own and control its own OS.

He explained that while Android is open source, which allows tablet makers to customize the user interface, there is no way to ascertain if the OS will still be available in the market or remain free in the future.

With HP already confirming plans to offer Windows-based tablets, the Canalys analyst said the tech giant will have the choice of supporting both OSes should it choose to keep WebOS.

Ng Jun Wen, research analyst at Frost & Sullivan, said HP would do well to keep WebOS.

"HP purchased Palm for US$1.2 billion and selling after a year at bargain-bin prices does not make sense for their shareholders," he noted in an e-mail.

Instead, Ng said HP should spin WebOS into a different division and give it the time and money it needs to grow.

"Even Android recently hit its stride only after three years," he added.

The Frost & Sullivan analyst said WebOS is a "great mobile operating system that, unfortunately, did not have the hardware to match". He noted that reviewers had praised WebOS on the Palm Pre2 but criticized its battery life, camera, screen, and hardware build.

One WebOS user agreed that HP should retain the OS. In a tweet, Palm Pre 2 owner, Luke Tan, said HP would be making a "huge mistake by not keeping [or] learning how to milk" WebOS.

However, another end-user disagreed. Tan Kian Ming, who owns an Android tablet, said HP should not keep the OS as the market would probably be consolidated to three major players: Apple iOS, Android and Windows.

"HP's investment is too little and too late. Better off betting on either Android or Windows 8," Tan said in a text interview.

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