HP ditches webOS devices, looks to spin off PC business

HP will discontinue operations for its tablets and smartphones, the company announced today.

HP announced a sweeping corporate overhaul on Thursday, and although exact details are still leaking out, it looks like the company will discontinue its webOS interface – the same interface that powers the HP Touchpad – while attempting to spin off its ailing PC hardware business. Meanwhile, Reuters is reporting this afternoon that HP is close to acquiring British software company Autonomy, for $10 billion.

In other words, out goes webOS, off goes the PC business, and in comes an infusion of software know-how. The announcement was greeted with approval on Wall Street, which temporarily sent HP shares up by about six points. (By late afternoon, the stocks had slid again.) Speaking to Reuters, Michael Yoshikami, chief executive of YCMNET Advisors, argued that the shift in focus could be good for HP.

"HP is recognizing what the world has recognized, which is hardware in terms of consumers is not a huge growth business anymore," Yoshikami said. "It's not where the money is. It's in keeping with the new CEO's perspective that they want to be more in services and more business oriented." HP has struggled mightily in recent months to compete in the tablet and smartphone markets, most recently releasing the Touchpad tablet.

Critics generally liked the Touchpad, but worried that the gadget would struggle to be seen amid a flood of Apple iPads, Samsung Galaxy Tabs, and other popular tablets. Which it was. In early August, HP cut the price of the Touchpad by $100, in a last ditch attempt to gin up interest in the device. (It's not immediately clear what will happen to consumers who purchased a Touchpad recently – customer support will likely remain in place for a while to come.)

Yesterday came news that HP was looking to expand the reach of its webOS platform, from conventional computer hardware such as the Touchpad, to kitchen appliances and cars. "We're looking at expanding the base and bringing to the webOS community an ecosystem that inspires developers out there," Stephen DeWitt, the head of webOS at HP, told the Wall Street Journal.

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