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HP’s Risky Triple Play

Three new Palm OS devices are impressive—but HP is playing some serious catch-up.
February 10, 2011

Yesterday, HP announced its first three products using WebOS, the operating system for mobile devices that was its main prize for acquiring Palm in July of last year. HP is already known for printers, PCs, and laptops, but the new products—a tablet, an updated smart phone, and a new super-small smart phone—highlighted a new strategy for the company.

Palm trio: HP has revealed three new mobile devices, including a mini-smart phone called the Veer and a tablet called the Touchpad.

The Touchpad tablet, Pre 3 smart phone, and Veer mini smart phone, show WebOS in three different sizes. By announcing them together, HP hopes to emphasize both the flexibility of the operating system and how well WebOS can work for a user who owns multiple devices running it. It also hopes to spur developers to create apps for the platform. However, this may still not be enough to capture a market that’s dominated by other big companies such as Apple and Google.

Palm’s WebOS operating system was the ailing company’s last-ditch effort to reclaim the market it once dominated with its popular PDA. The WebOS operating system uses Web technologies familiar to developers, such as HTML and JavaScript, instead of Objective C, the specialized language used to program apps for Apple’s iPhone. The Palm Pre, which was the first device to feature the operating system, was praised for its design when released in June 2009, but it was a flop in the market, leading to HP’s acquisition of Palm.

The acquisition of Palm, and the launch of these three devices, is an important move for HP, the world’s largest personal-computer maker. The market is shifting away from desktop and laptop computers toward increasingly powerful smart phones and tablet computers. But the strategy HP has chosen is risky. It aims to innovate its way to a successful position in this emerging market, which is dominated by Apple with the iPhone and iPad, and by other hardware companies that use Google’s free Android OS.

Now HP hopes to use WebOS to give it a leg up in the current war for mobile-device users. The Touchpad is a tablet designed to compete with Apple’s iPad and its imitators. The Pre 3 is an updated entry into the smart-phone market. And the Veer is something of a novelty: a smart phone about the size of a credit card, although considerably thicker.

“For the first time, WebOS is on a device [the Touchpad] that lets its intuitive nature shine through,” said Jon Rubinstein, a senior vice president and general manager at HP. Rubinstein is a former Apple executive who served as executive chairman of the board at Palm.

WebOS differs from competing operating systems in the way it accesses information from the cloud, thereby synchronizing information across multiple devices. When a user logs in to the operating system on whatever device, all his or her information just shows up. If the user owns multiple WebOS devices, it’s easy to transfer information from one to another. Literally touching the devices to each other can share a link or a note through a feature called Touch-to-share. This feature uses the same induction coil technology that can be used to charge the devices wirelessly. Users can flick text messages, incoming calls, or other notifications between devices.

HP executives also showed off the operating system’s slick ability to manage multiple tasks at once. Users can control open applications by moving them around onscreen, flicking them off screen to close them. “We can do this because with WebOS, multitasking was not an afterthought—it was a design principle from day one,” said Sachin Kansal, a director of product management.

HP released the Veer, Pre 3, and Touchpad together in part to showcase how well they work in concert. “HP is throwing down the gauntlet by challenging Apple, its Cupertino neighbor, at its own game of vertically integrated hardware and operating systems,” says Dan Hays, a partner and consultant at PRTM, a global management consulting firm.

But despite the many attractive features of WebOS and these three new devices, experts predict that HP faces an uphill battle. Sarah Rotman Epps, a senior analyst with Forrester Research, calls the integration between phone and tablet “a nifty whizbang,” but adds that “it’s unlikely that consumers will buy into the whole phone-tablet ecosystem.”

HP also needs to get developers on board, since apps are a big part of any device’s appeal these days. While WebOS always received accolades for its design, it never attracted the developer firepower of Apple’s iOS or Google’s Android, leaving much of its promise unfulfilled.

Hays notes that “right now WebOS is a distant sixth in the number of applications available to end users, far behind not only Apple and Google, but even trailing the likes of Nokia, RIM, and Microsoft.” No matter how compelling the designs of the new devices are, Hays believes, WebOS is sunk unless it can catch up on its content deficit. This may be even more difficult, he says, because with WebOS HP is snubbing its usual partners Microsoft and Google.

HP is throwing its considerable resources behind WebOS. At yesterday’s press conference, Rubinstein hinted that consumers may soon see WebOS on printers and PCs as well as on the devices announced this week. This could perhaps offer another way to attract developers to the platform.

Despite the challenges, Epps believes HP’s TouchPad “is a solid bid for number two in the tablet market.” The device’s advantages will probably win out over BlackBerry, she says, and consumers are more likely to trust HP for a tablet than Samsung and Motorola, which make Android-powered devices. But she does not think it has a chance of dislodging the dominant iPad, especially since Apple is expected to release a second-generation version this year.

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