How HP failed with WebOS, and let’s be honest

HP’s decision to halt the production of WebOS devices came to a rather large shock to me. As an avid user of consumer technology, WebOS came at a time when iOS and Android were making all the headlines and it revived the Palm brand for a brief moment in time and raked in a fair bit of cash. During my time with WebOS I have had some great moments of usage and have watched as three generations of Pre smartphones come out and one generation of tablet. It seems to me that despite my own love for this truly spectacular operating system (yet admittedly love or hate hardware) something went terribly wrong over at HP after they bought Palm out, and when you take a step back to think about what Palm offered with the Pre, Pre 2 and what HP offered with the Pre 3 and TouchPad, it all seems a little bit strange that such great products can’t have a high demand even if there are competitors out there shoving their products in your face, a la Apple.

It’s all in the marketing, baby

Marketing plays a massive role in the products we as consumers buy and for anybody not clued in to the tech world advertisements are the first point of contact. This is one of the reasons WebOS devices have failed to sell well just as they should have, due to HP not pushing the products they had enough for sales.

I’m not blaming Palm here. I’m blaming HP.

All the way back in 2009 when Palm first released the Pre the media it received was more than huge, it was gigantic. In a number of ways, Palm was coming back from a break in the smartphone market and they were promising an operating system which was a delight to use. Through reviews and hands on usage, this was confirmed to be true and here in the UK in particular it stood out vastly amongst other handsets with thanks to awesome hardware. Even the most valuable brand in the world Apple admitted that the WebOS software was a step in the right direction for Palm and that the way it multitasks was an example of multitasking which works.

If you take a note from my above sentence that I’m blaming HP for the lack of demand of WebOS devices you’d be right on 95% of accounts, but Palm also failed in a couple of key areas here. First of all, Palm released the Pre after the Motorola Droid which ironically was Motorola’s very own Pre in that it was the only chance for them to get back in to market after RAZR. This was a huge mistake on Palm’s behalf, because Google’s Android operating system had already made itself a brand identity in the smartphone market and a real world choice over Apple devices. What’s more, Motorola’s Droid / Milestone already had a clear gap in the market it could slide in to (QWERTY totting keyboard, no pun intended) whilst the Pre, although having a hardware keyboard, couldn’t compete with the pricing or customizability the Droid offered consumers. Immediately, then, a lot of people called it game set and match including Job Rubenstein Palm’s CEO at the time, who is quoted as saying in March 2010:

“If we could have launched at Verizon prior to the Droid, I think we would have gotten the attention the Droid got. And since I believe we have a better product, I think we could have even done better”

During Jon Rubenstein stating the above, 8 months after the Palm Pre release, Palm recorded a net loss of $22 million in the third quarter compared to a mammoth $98 million in losses the year before that. Despite Palm’s losses, then, things were slowly starting to get better year on year for Palm in terms of revenue however only 408,000 smartphones were sold to average Joe consumers whilst a whole 960,000 were sold on to businesses during that third quarter. Palm announced that they were disappointed in this, despite WebOS landing them $49.9 million in revenues above what they predicted for that quarter*. It would seem at that time then unless Palm did something quick to try and sell their products to consumers and not businesses they’d continue to ship out a low number of handsets, despite the fairly high margins they were selling them to businesses at.

Then HP bought Palm

On April the 28^th of 2010 news broke that HP were in talks with Palm to buy out the company, and on the 31^st of July 2010 this deal became a reality. To the tune of $1.2 billion Palm was no longer a competitor in the smartphone market, and HP had a whole lotta’ media bigging them up with talks surrounding a huge re-launch for WebOS devices and also talks of a tablet. This tablet would later prove to be one of the last WebOS device’s launched by HP.

HP (Hewlett Packard) is an American based company specializing in information technology, but you’ll know them best from the amount of laptops, computers and printers they sell. Their acquisition of Palm for $1.2 billion drew excitement from media analysts and me for a few reasons; firstly HP didn’t have much of an identity in the mobile sphere so how they were going to play this was of interest, and secondly HP’s success has come from IT services and inkjet printers, the second point of which they are no.2 in the world. Could the computer and printer marketing boffins over at HP really cut it in the mobile world?

Apparently not. In the UK (where I live, and am writing this article from) I recall seeing two HP TouchPad television adverts, however no Pre 3 adverts. In fact, the only mass marketing I ever saw was from Palm themselves, who upon release of the original Pre got TV advertising slots at peak time. This is one of the reasons for me that HP failed to get their products to consumers, and I also think in a way they thought they could just release new products on the basis that Palm had done enough to get their products noticed.

Let’s not second guess though that me seeing no HP advertisements equals the rest of the word not, as I’m confident that isn’t the case. I’m just stating that for me if I was an average consumer, one HP TouchPad advert a month and 20 iPad adverts equals my money going to Apple. Such a shame.

WebOS’s cut off was planned, months ahead

Palm released their original Pre amidst the launch of Motorola’s Droid / Milestone smartphone to go back to points raised above, and this resulted in a slow growth for Palm’s very first handset. Jon Rubenstein admitted this however, so let’s move over to after HP took over and subsequently released the Pre 3 and TouchPad.

The Pre 3 was launched alongside some seriously competitive handsets on the 17^th of August this year commercially in the UK, such as the HTC Sensation, Galaxy S II, iPhone 4 and newer technologies such as the LG Optimus 3D. Competition is essential in business, but HP failed in every single way to make their handset stand out and I don’t think they even bothered with it. I mean, HP’s decision to end the life of WebOS must have been planned months in advance of the Pre 3 release so was the Pre 3 just a send off and goodbye for the Pre line and what’s more, was the TouchPad just HP’s way of pleasing the customers it had by releasing something they had wanted for so long? In many ways this was the case. You get the sense with the TouchPad in particular that HP looked at an iPad, built their case around the same thickness, looked at what processors tablets had and followed their lines, realised most tablets don’t ship with server streaming capabilities so didn’t bother, and then thought that users wouldn’t be bothered about connecting to say a Wifi network printer. All of these things really knack consumers off, but on the basis that the TouchPad was just a goodbye and thank you for buying the products, it only appears fitting that HP appear to have cut corners with this product.

That isn’t to say the TouchPad is a bad product though because I own the 32GB version and use it daily. The software on the device is a wonder to behold and I love the multitasking cards WebOS utilizes.

Let’s sum up

HP failed in a number of key areas with WebOS. First of all HP failed to create hardware which kept up with competitors aesthetically (average consumers see design first, specs later). Second of all HP failed to market their products as unique, direct alternatives to the Android and iPad competition. Thirdly HP didn’t exactly entice developers so much as to want to code apps for the WebOS market, and last but not least HP made a huge mistake thinking that they could compete with their brand, which up until now had absolutely no relevance in the smartphone market.

Ultimately HP failed though because they decided to let the Palm name die away over a year ago, a mistake in its own right due to brand awareness and prior products carrying the name Palm ‘product’.

What does everybody else think about HP’s mistakes? comments are open.

Sources: PC Pro (Rubenstein quote), Wikipedia (Pre release date)