Skip to main content

HP wants to sell its PC business, kill webOS: So what happens now?

hewlett-packard-headquarters
Image used with permission by copyright holder

According to a press release today, Hewlett-Packard is discontinuing webOS and is looking for a “a full or partial separation of [consumer electronics division] from HP through a spin-off or other transaction.” That’s right, the number one PC maker in the world is essentially shutting, or selling, its doors. HP is looking for someone to buy its Personal Systems Group (PSG). This division is responsible for all consumer PCs, business PCs, handheld products like the Pocket PC, and TV-related devices like MediaSmart TVs and DVR products. Strange things are happening, people. Strange things. 

Apple takes HP’s PC throne

This news comes just as reports are leaking that Apple may have stolen the top spot to become the number one PC manufacturer with its line of Mac computers and the massive success of the iPad. Hot Hardware reports that Apple took a 21.1 percent share of the PC market in Q2 2011, with 80 percent of Apple’s sales of 13.6 million units for the second quarter coming from the iPad. HP, now in the number two spot, moved 9.7 million PCs in the second quarter. Dell, Acer, and then Lenovo rounded out the top five. 

So, why is HP planning to rid itself of its PC division? These sales aren’t terrible. Well, it doesn’t see a bright future in the space, apparently. With the PC space and smartphone space beginning to interbreed, traditional PC sales are stagnating (down 2 percent in Q2 2011) It’s printing, enterprise, software, and services businesses hold a lot higher profit potential than PCs and tablets, which tend to have thin profit margins due to competition.

WebOS meets its demise

Then there’s webOS. HP paid $1.2 billion to purchase Palm two years ago because it saw a future in webOS, but hasn’t been able to capitalize on the platform. In February, HP announced three new webOS devices — the HP Veer, HP TouchPad, and Palm Pre 3 — and boldly stated that webOS would be integrated into all of its future PCs. As of today, that plan has been dissolved, partially due to poor sales of the HP Veer and HP TouchPad, two odd products that likely didn’t take off more because of the hardware than webOS itself. Still, sales are everything. According to sources at Best Buy, the recently-launched TouchPad sold just 25,000 of its 250,000 initial shipment to the retailer. And in HP’s quarterly earnings call, it announced that it would be taking a $100 million hit to buy off unsold inventory of the failed tablet

hp-webos
Image used with permission by copyright holder

In its release, HP says it has no plans to continue development on webOS products, but may continue to update it or consider licensing it out to other vendors, like those who make smart cars and appliances. Still, we have to wonder why any manufacturer would sign on to integrate an OS that has been publicly discontinued. Would you want to run a dead OS when there are plenty of living options?  

Lenovo and IBM all over again?

So what might happen if HP spins off its PC business? It could simply operate independently and continue to make PCs and other electronics for a long time. The more likely scenario, however, is that someone will buy HP’s PC business, in a deal not unlike Google’s recent Motorola acquisition. But forget Motorola for a moment. We’ve seen this before. In 2005, IBM made the decision to sell off its PC business to a Chinese company called Lenovo for $1.75 billion, an amount that seems paltry when compared to the mammoth $12.5 billion sale of Motorola Mobility. At the time of sale, IBM was the number three consumer PC manufacturer in the United States, but, like HP, IBM saw a brighter, more profitable future in the world of enterprise, computing architecture, and a number of other business and government related projects. 

At first, Lenovo relied heavily on the IBM name, but in the years since, it has increasingly relied on its own branding, relegating the IBM logo to the inside of its products, similar to the old “Intel Inside” branding that used to adorn PCs in the 1990s. Lenovo is currently the number five PC maker with 7.5 percent of the market, $4.8 million in Q2 2011 sales and 9.7 percent of total market share in 2010. For comparison, IBM’s market share in 2004 was 5.5 percent. Lenovo has announced and released tablet computers outside the United States and has a good foothold in China, which will undoubtedly see a great deal of growth in the future. 

Who will buy HP’s PC business?

So who is HP’s Lenovo? Who will step up and buy the PC giant? Well the obvious first guess would be one of HP’s competitors. Dell, Acer, Lenovo, and Toshiba could be interested in acquiring HP if the math benefits them enough. After all, in 2002, HP bought its way to the number one PC position with its purchase of Compaq computers. Compaq was the number one manufacturer from 1996 to 2000. By 2006, HP had taken back the top spot from Dell, reigned supreme from 2001 to 2005. It has held the top spot ever since.

Or maybe somebody else wants in on the PC market. Samsung, HTC, LG, Google (why not?), or another smartphone manufacturer could choose to buy into the PC market or increase their stake significantly. Samsung seems an especially good fit, as its PC sales have never reached the heights of its smartphone and feature phone sales. Maybe somebody from outside the industry all together plans to join. 

The PC market is alive and well

It’s not like the PC market is dying. It’s just evolving. Tablet computers are becoming an important sector of the market and are slowly merging with the traditional PC, a topic we just covered in Back to Basics – How smartphones and tablets are shaping your next PC. Overall, the space is still growing quite rapidly. Global sales of PCs have risen from 305.9 million units in 2009 to 346 to 350 million in 2010. 2011 sales will likely grow still, propelled by the growing tablet market. Want to know how fast computer sales have grown? In 2005, 218.5 million units were sold around the world. In 2000, only 134.7 million were sold, and in 1996, only 70.9 million computers were sold. We’ve gone from 71 million to 350 million in 15 years. For those with an open mind, the PC industry is a great place to be.

Don’t fret the coming loss of HP, should such a thing happen at all. Companies rise and fall all the time. It’s only when we stop seeing companies fail that an industry gets into trouble and complacency. The PC market will not shrink or hurt severely without HP branded products to fill retail shelves. If anything, this mix up will only speed up innovation and growth. HP will survive too, likely sinking into the background of the tech industry much as IBM has done. Years from now we consumers will hear about Hewlett-Packard from time to time and wonder just what the company actually does anymore. HP isn’t going anywhere, it’s just content being boring. It’s had enough with the glitz of consumer electronics. It’s gotten to the age where it just wants safer and larger profits.

Jeffrey Van Camp
Former Digital Trends Contributor
As DT's Deputy Editor, Jeff helps oversee editorial operations at Digital Trends. Previously, he ran the site's…
Surface Laptop Go 3 vs. Surface Pro 7+: is it an upgrade?
Microsoft Surface Pro 7

The Surface Laptop Go 3 is Microsoft's new affordable Surface laptop, with upgraded hardware and long battery life making it a compelling option for budget laptop buyers in 2023. But for anyone considering an upgrade to a Surface device at around that $800 price, the Surface Pro 7+ still presents an attractive purchase, and it can flip into a tablet when you need it.

That brings to mind the age-old question, of whether newer is automatically better. In this case, it might not be. Let's take a look at the Surface Laptop Go 3 versus Surface Pro 7+, to find out.

Read more
Great for school: This 15-inch Windows 11 laptop is on sale for $199
The Asus VivoBook Go L510MA with the Windows 11 interface on the screen.

If you're planning to buy a new laptop for school but all you need is a device that can handle basic tasks, there's surely something that will catch your eye among all of the laptop deals that are available online. Here's an eye-catching offer from Walmart -- the Asus VivoBook Go L510MA, which is already pretty affordable at its original price of $249, is on sale with a $50 discount that pulls it down even further to $199. There's a chance that this bargain ends quickly, so if you want to take advantage of it, you're going to have to complete the purchase right away.

Why you should buy the Asus VivoBook Go L510MA
The Asus VivoBook Go L510MA is powered by the Intel Pentium Silver N5030 processor and 4GB of RAM, which are nowhere near the specifications of the best laptops. However, if you only need the device for relatively simple schoolwork such as doing online research, typing reports, and making presentations, these components are more than enough. The Asus VivoBook Go L510MA also comes with a 128GB eMMC for storage, which should be plenty of space for all the documents that are needed for classes.

Read more
Best Dell laptop deals: Cheap laptops on sale from $300 to $2,000
dell xps 13 9310 specs price release date 02

Dell is almost universally considered one of the best laptop brands, and that may lead many to believe it can be hard to get a Dell laptop at a discount. Dell, however, is always coming up with some of the best laptop deals, and that’s certainly the case right now. Many of the best Dell laptop deals include newer models, but you’ll also find some impressive discounts on laptops that are a generation or two old yet still managing to hold their own. We’ve rounded up all of the best Dell laptop deals out there, so read onward for more details on how to land some savings.

Dell Inspiron 15 -- $300, was $330

Read more