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HP Getting Out of the PC Business?

Posted by KL Tech Muse at 5:03 PM on August 18, 2011

HPToday HP announced they are discontinuing operation for webOS devices including the Touchpad and webOS phones. WebOS was originally developed by Palm and first released as the Palm Pre in 2009. In 2010 HP purchased Palm. The Touchpad and HP Veer and HP Pre 3 were all announce in February 2011. Unfortunately they couldn’t penetrate the market and sales were almost nonexistent. Best Buy ordered 270,000 HP Touchpads and according to various sites have only sold 25,000. Other companies like Walmart haven’t had any better sales for the webOS devices including the Touchpad. Reviews of the HP Touchpad said they were ok, but lacked an app eco system and at times performance was sluggish. Since they were originally around the same price the same as the iPad2 and the Galaxy Tab, the only reason to purchase it was if you preferred the webOs (Palm) operating system, unfortunately for HP not enough people did.

The other big news from HP which hasn’t been confirmed is that it is trying to spin-off it’s PC division entirely. HP is one of the founding companies of Silicon Valley so for them to even think about selling off their PC division is big news.  The growth in the smartphones and tablet market plus the downturn in the economy worldwide has definitely effected PC sales. PC growth over all has been very slow with worldwide shipments only growing 3% in the 2nd quarter of this year. Is this a sign of the general decline of the PC market are PC becoming trucks as Steve Job once said, or is it just part of the overall economic downturn. Once the world economy revives will the PC market also revive. The PC market depends on selling a lot because prices are so low there is very separation between success and failure. It is clear by HP actions that they believe the personal PC market is no longer profitable. Whether they are wrong or right only the future can say, but it is certainly a bold move.

2 Comments

  1. From graham childs at 3:27 pm on August 22, 2011

    They only made 5.9% margin on the pc business in the last quarter, they would make the same profit by putting their money in a long term savings bank account.

    PCs are unprofitable for all except Apple.

    http://grahamsblog4444.blogspot.com/

  2. From John Smith at 5:59 am on August 28, 2011

    5.9% on a savings bank account? Really? Let me know when you find one of those. Stick to the technology and don’t comment on the financial aspect. That’s the most ridiculous response to an article I’ve read from someone in a long time…