HP's webOS and PC business set for the scrap heap

HP’s decision to exit the mobile devices market and spin off its PC business has come as no surprise to analysts as the firm looks to concentrate on its infrastructure and services business.

HP acquired Palm and the coveted webOS operating system in a deal worth $1.2bn just over a year ago and unveiled some grand plans. However, the PC maker has taken the drastic step of closing down the division shortly after launching the Pre 3 smartphone and HP TouchPad tablet.

The failure of the world's largest PC maker to make a go of this part of its business is not surprising, however, as HP never understood the smartphone business, according to Francisco Jeronimo, research manager for European mobile devices at IDC.

"The only surprise is that HP spent $1.2bn on Palm only to close it down so soon. Having a strong brand and marketing is not enough to be successful in the mobile market. Firms need to invest in the right product and have strong channel partners," he told V3.

“Acer and Dell are other PC vendors that have struggled to make an impact in the mobile market, so it’s not a surprise that HP has failed.”

Limited options remain for HP when it comes to the Palm brand, Jeronimo continued.

“No-one is interested in licensing the webOS platform, otherwise HP would have made an announcement," he said.

"It is also going to be difficult to sell the platform as there aren’t many useful patents that firms such as HTC and Samsung could use. It looks like webOS is dead and it is a shame as it was a very good operating system."

Nick Dillon, Ovum devices and platforms analyst, agreed that it was unsurprising HP had closed down Palm, but suggested that it was a bit premature.

“The TouchPad was launched weeks ago and the Pre 3 has only just been released in the UK," Dillon told V3.

“HP spent a lot of money on the acquisition and marketing, but did not manage to extract the value out of Palm. This has been an embarrassing episode for HP and the decision to close it down shows that the device market is no longer critical to its plans."