RIP TouchPad as HP "initiates company transformation"

Not four weeks ago APC attended the official Australian launch for HP's new TouchPad tablet in Sydney and were told how HP was very excited to be bringing the tablet and its webOS operating system to Australia for the first time. Exclusively put on Harvey Norman shelves for sale this very week, the TouchPad was portrayed by Anthony McMahon, VP of HP webOS, Asia Pacific and Japan, as the first of a number of devices we could expect to see powered by the webOS platform.

After the presentation, seemingly unimpressed by the product's admittedly run-of-the-mill first-gen tablet hardware spec, a scarcity of apps and undifferentiated pricing, one journalist expressed overall disdain, rhetorically sniping at the Q&A: "Why would I buy it?"      

It seems he may have been onto something.



Overnight HP announced that it was changing the direction of its business to focus on the "strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets".

What does this mean? In short, the company is pulling back from consumer model hardware: killing off the under-selling TouchPad and all webOS hardware concerns (such as webOS phones, which we hadn't yet seen in Australia) as well as theoretically stepping away from the consumer PC market. HP is evaluating "strategic alternatives for its Personal Systems Group (PSG)", which could mean a sell-off of the company's consumer PC wing.
 
HP's calculated move towards a more-profitable software future comes in conjunction with its acquisition of enterprise software corporation Autonomy for US$10.3 billion, which specialises in providing information and communications infrastructure for some 25,000 customer companies internationally.

While the sudden termination of the TouchPad line is particularly dramatic given how recent its launch (and attendant launch celebrations) were, the writing, as they say, was on the wall. The device's release in the US in July was followed by a string of price cuts (mimicked in Australia, even before going on sale) which suggested consumer uptake was less than hoped for. HP isn't trying to hide this either, openly citing that the TouchPad and webOS devices "have not met internal milestones and financial targets."

Alongside a generally less-than-amazed critical response from reviewers (and the evergreen iPad juggernaut not to mention a slew of Android tablet competition), the TouchPad's chances of attaining real traction were perhaps always fairly slim -- which is why we thought the bigger picture for HP was the success of the broader webOS platform itself.

And it still is. While HP is clear on its exit from the webOS hardware game, it's not saying goodbye to the webOS software, promising to "explore options to optimize the value" of the platform and its software. Whether this means licensing the OS to other device manufacturers remains to be seen.  

But perhaps the biggest shock and most significant event here is the potential departure of HP from the consumer PC market, which could spell the end of high-profile computer brands like Compaq and Pavilion. There's a good chance a fair few of you are reading this story on one of them.

Only yesterday we discussed the high-stakes brinkmanship currently at play in the consumer tech sector. Another day, another scalp it seems. And the TouchPad really must take the cake for 2011's last in, first out.