With the end of WebOS-based devices, and the operating system now becoming more of a hobby/experimental system than a real product, HP has effectively left the mobile computing space. This will be the first time in nearly 2 decades that HP hasn’t had a mobile device (outside of their calculators). In some ways, that doesn’t seem right. It also means that, if HP wants to be a “full line” technology company, they have a hole in the product line. But should HP get back into mobile computing?
A Future For WebOS?
Let’s start with a look at the mobile technology HP still does own, although it isn’t really exploiting it commercially. WebOS is now an open-source project. Unfortunately, making something open source doesn’t automatically make it real, legitimate or give it a future. It wasn’t the worst decision HP could make, though. WebOS was effectively dead anyways, and allowing it to live on has some upsides. But being open-source won’t mean much if no one wants to buy devices built on it, or build apps for it.
HP has also stated that “sometime in the future”, there will (or could) be WebOS-based hardware again. I believe this is a mistake for HP. HP’s best work seems to come when they rely on operating systems from a larger base, such as the use of UNIX (System V Release 2 for the earlier version of HP-UX, upgraded to System V Release 4) and now Linux, as well as the use of Windows for desktop/laptops and servers. The iPAQ family ran mobile versions of Windows. These were their best platforms, and the ones with the most resilience in the market. Their mainframes were good, but not great, and they exited that business, dropping their own operating system with it. They inherited VMS, Ultrix and Tandem, all of which are essentially gone. The products that have survived: those based on open standards (UNIX, Linux) or from a dominant 3rd party (Windows, Windows CE, Windows Mobile from Microsoft).
Strongest Platforms Used Other Systems
HP’s first foray into general-purpose mobile computing came with Windows CE, followed by Windows Mobile, when they merged with Compaq. The devices were solid, durable and could claim pretty impressive battery life (at least on the HP iPaq devices I had did). Granted, Windows Mobile wasn’t the most stable platform around. They did tend to need to be reset an awful lot. But there was an adequate selection of 3rd-party software, and they were certainly useful for me. To be sure, the Palm devices were still the class of the field at the time. Yes, I’m a tech junkie, so I had both. Each had their strengths and weakesses. The Palm devices were solid, reliable and had great battery life. The Windows Mobile devices had more modern and engaging interfaces.
The WebOS adventure was an unfortunate distraction for HP. I can understand the desire to own the system end-to-end (like Apple does), but HP’s strength is hardware, and not software. Even buying the skill, by purchasing Palm, didn’t seem to work. They also did it at an unfortunate time in the development of the mobile marketplace. Blackberry and Symbian were dying, Windows Phone was (and is) struggling to gain traction, while iOS and Android shot to the top of the charts. What was essentially a new platform, with limited support and few apps, really didn’t stand a chance. Any technical superiority it may have had wouldn’t matter. Without apps and content, the platform was simply overmatched.
How Could HP Succeed In Mobile
Where HP could succeed in the mobile computing world is with a combination of using a proven platform (Android), and bringing their hardware and enterprise expertise to bear. Offering Android smartphones and tablets, with enhanced security and a strong ties to enterprise services, could give Android a foothold in the enterprise market. Right now, iOS is displacing Blackberry, and while there will be pockets of the market that will hold out (primarily because of Blackberry’s stronger security), most enterprise customers could simply exchange Blackberry for iOS. Android’s far weaker on-device security is part of what is holding the platform back (although the platform fragmentation that still persists isn’t helping that much).
Doing this does mean building Android expertise inside HP. There’s no reason why they couldn’t do that. Meg Whitman has said they want to use the $3+ billion they save with the staff cuts and reinvest into the company. Here is one opportunity for them to use some of that money to plug a hole in the product line. I think it would be better spent rather than trying to bolster a mobile operating system nobody really wants.
What About Windows Phone?
HP has a history with Microsoft operating systems for desktops, laptops and servers. HP also used mobile versions of Windows. So why not stick with that, and go with Windows Phone? Because the platform is mired at around 4-5% of the market. It has made little or no gains in marketshare or mindshare. Yes, their app store is growing, but at a slower rate. It just isn’t getting the same attention from developers as iOS and Android. Trying to take on the mantle of champion for Windows Phone (given that Nokia has had little or no impact) is a lot to ask.
Sure, it’s a bit of a bandwagon effect, but the reality is that there are only two viable mobile operating systems right now: iOS and Android. Together they own 80% of the smartphone market and climbing. Windows Phone took over the sliver of the market Windows Mobile had, and hasn’t increased it. Symbian when from dominance to irrelevance. Blackberry is in freefall. WebOS and Bada are, at best, interesting science experiments. HP is in a place where, right now, risk is bad. Going the Android route may not be the most imaginative, but it is the one with least risk and the greatest chance of a reward. And there may be a way that RIM can make space, and a name, for themselves as an Android provider, in be in a position that guys like Samsung, HTC and Google/Motorola are unable to occupy. Part of that equation could include RIM.
What About Buying RIM?
There are two sides to this. One the one hand, RIM is a dying platform. Yes, they are still profitable. Yes, they still have healthy revenue. But both have been declining as the company has had to cut profit margins and as their share of the market continues to shrink. Buying RIM doesn’t get HP much in the way of instance marketshare, or a ready-built platform for the future.
But RIM does buy them two things. First, it gets them a leg-up on scalable, secure enterprise integration for mobile devices, albeit for the wrong platform initially. It also gets them a service to back it up. Second, it gets them a strong team with deep knowledge on mobile security. These things, brought to bear with HP’s resources, on the Android platform, in concert with the rest of the depth both companies have in enterprise technology and services, could do two things. First, it gets HP a shot at building competitive devices that are attractive to consumers, but with HP’s reputation, also attractive to enterprise customers. Let’s face it, iOS is starting to run away with the enterprise like it did initially with the consumer market. While I like iOS, it has an “okay” but not “great” enterprise story. It is certainly “good enough”, but it could be better, particularly when it comes to managing thousands of devices, and keeping them secure.
HP has experience in this area that the two biggest players in Android, HTC and Samsung, simply do not have. Google has experience with large-scale distributed computing, but they don’t have a strong story for selling enterprise technology, and no presence in services. HP has this. Taking the best of RIM (the enterprise technology and services, and the security), dropping the dead hardware and operating system platform, and marrying that with HP’s global enterprise capability and service reach, could be a shot in the arm for Android, and give it the kind of support it needs to succeed in the enterprise space. Android is doing very well in the consumer market. It is almost invisible in the enterprise space. HP could change that.
But Enterprise Not The Whole Story
HP has to recognize that gaining ground in the mobile enterprise market is good, but without the consumer market, the story is incomplete. HP says they want to stay in the consumer PC market. They want to stay in the consumer printer market. They would need to commit their resources to maintaining a consumer mobile computing presence as well. As the story of the Blackberry demonstrated, being in the enterprise isn’t enough. The consumer market for mobile computing is considerably larger, possibly as much as 1o-times the size, as the mobile enterprise market. Smartphones really didn’t take off until consumers started to buy them, and in droves. Yes, the enterprise market is big. But the consumer market is bigger.
HP certainly has many of the pieces to be a significant player in the mobile computing market. The one piece, WebOS, isn’t a strength, and relying on it instead of moving to Android will likely doom them to also-ran status. Adopting Android gets them a stable and well-known platform with a rich ecosystem. Buying RIM would get them some useful and important components, but the Blackberry operating system and hardware isn’t one of them. RIM would add enterprise integration, mobile services and mobile security depth. HP would bring the rest of the enterprise picture, including a strong services capability and global reach. HP as a consumer brand is still will recognized. Together, it could be a potent combination, and give HP the pieces they need to succeed in the mobile computing market.