HP to end webOS development, spin off computer business and focus on software/services

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Date: Friday, August 19th, 2011, 03:13
Category: News

Even the mightiest can fall.

Or be forced to radically restructure.

According to Bloomberg, Hewlett Packard, the world’s largest PC maker, has announced plans to spin off its PC business and scrap its recently acquired webOS smartphone and TouchPad tablet business to focus on software and services.

Per the report, HP “has been aiming to lessen its dependence on lower-margin PCs, where growth has stalled as consumers flock to tablet-style computers like those made by Apple.”

Recent reports have documented HP’s slide, along with most other top PC makers, in shipments of new computers as Apple continues to grow its sales of Macs and particularly iPads.

Apple was the only maker in the top 5 PC vendors of Western Europe to experience growth in computer shipments, and the company just surpassed HP in mobile PC sales, largely due to booming sales of iPads.

HP has been unable to gain traction for its own iPad alternative, despite a campaign launched last year to buy Palm for US$1.2 billion and use its webOS to power a new generation of mobile devices.

HP is scheduled to announce quarterly earnings after the market closes today, and is expected to detail its US$10 billion plan to acquire Autonomy Corporation, the second largest UK software maker, headquartered in Cambridge, as it spins off its PC hardware unit.

Autonomy develops enterprise search and data processing technologies that look for meaning in text, voice and video data, whether in a database, files or streams. Much of its technology has origins in research conducted at the University of Cambridge.

Following a series of mergers and acquisitions, HP represents a combination of Apollo, DEC, Compaq, 3Com and Palm, but is now valued at just US$62 billion, compared to Apple’s current market cap of US$338 billion.

Apple acquired HP’s vacated “Executive Briefing Center” Pruneridge campus in Cupertino, California, and has plans to develop the site, along with adjacent land it already owned, into a futuristic new “Apple Campus 2″ site, located one freeway exit away from its current Infinite Loop headquarters.

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