The story of HP quitting the tablet market is no longer news. Tech world has a much faster clock rate than many other industries. Things happened a week ago can be obsolete, but I think this story will remain as a marketing textbook classic.
The truth is HP made a fatal mistake. Just because almost every other competitor attempts to take a slice from the "iPie", it does not mean HP can win a feasible business out of the competitions. The TouchPad was poorly designed from an industrial standpoint. Its WebOS does not have the critical mass compared to iOS and Android. Thus, there is much less commitment from the developer community to contribute 3rd party Apps. And Apps is what makes Apple iPad stands out among the competitions. Releasing the TouchPad and fighting the battle against Motorola, Samsung, hTC and many others simply means HP would have to continue pouring money into the business for the sake of keep its gambling seat.
There of course is a blame war ongoing. Many would say HP should have not purchased Palm in the first place. Arguably, Palm's later mobile phones are not that great also, let alone the TouchPad. And the general manger whoever decided to enter the table competition should get fired. Many would also say that HP's board should also take responsibilities. All true, but it does not matter anymore. In business, this is considered as sunk cost. Mistakes were made, resources and capitals were spent, and nobody can reverse it. The key is what To do now. I think HP's board made a plausible decision that they have the guts of calling for a quit without further wasting of company's resource.
In many business opportunities I saw, some companies do not have the dare to admit their marketing mistakes. The marketing people didn't do the job properly (e.g. draw a "big pie") or didn't dare to stop their management from madly chasing competitions. They kept fighting the war even though they knew there would be no money made no matter how long it lasts. Companies do not easily quit for many reasons. Beyond the internal politics (a money-losing business is always a trap topic in the board room), companies are typically hesitate because quitting early often leads to credibility damage at the customers. However, sometimes, admitting a mistake and re-strategize the company can save huge amount of resources and set things right once for all. That's what I believe HP did. For an innovation driven company like HP, living with 20-30% gross margin for a product is not acceptable. HP has to "up sale" itself as a technology provider, a solution vendor, and a business partner for their customers. Killing the TouchPad and easing out the PC marketing marks a transition point for the company.
No one knows if HP's new CEO and the board can pull this off. For a company that's worth $60 Billion (before the 20% stock price drop), steering this gigantic ship is no easy job. There are the two obvious possibilities in ten years. If HP succeed of transitioning itself and become another IBM-like company, quitting the consumer electronics market would be marked as a classic business success story. Else, this move will be considered as a self-sabotage action that severally damages HP's business future.
Either way, I believe HP did what many others not dare.
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