HP Says It Must Get Back Into Smartphone Biz

In an interview with Fox Business Network on Friday (video), Hewlett-Packard CEO Meg Whitman admitted that the company will eventually have to re-enter the smartphone sector.

The company abandoned the smartphone and tablet sector last year after it acquired Palm and produced several devices based on its newly-acquired webOS operating system. The products tanked, causing HP to reorganize, let some workers go, and turn webOS into an open-source project. That said, it's understandable why HP would be skittish about re-entering the mobile market.

But as she points out in the interview, HP is a computing company, and it needs to take advantage of that particular form factor. In many countries, people can't afford to purchase a tablet, laptop or PC, thus the smartphone becomes the primary computing device. They'll do everything on that one device, and HP needs to take advantage of that scenario.

Right now HP is about 20-percent of the way through a five-year restructuring plan, a plan Whitman initiated as soon as she took the role of CEO. She currently expects slow growth to flat business in 2013 despite the company's efforts in Windows 8 products. But if HP does venture back into the smartphone sector, the company will have to "get it right this time."

"We are working on this," she said when asked when consumers will see an HP smartphone. "In the end I would love to be able to provide all the way from the most fabulous workstations to desktops to laptops to our tablets and convertibles all the way to smartphone," she said. "But we did take a detour into smartphone and we've got to get it right this time."

"And so my mantra to the team is 'better right than faster than we should be there,'" she added. "So we're working to make sure that when we do this, it will be the right thing for Hewlett-Packard and we will be successful."

Whitman also pointed out that HP recently took over the top spot in workstation sales from Apple. Later Whitman added that HP has no interest in purchasing all or part of troubled BlackBerry maker RIM. "No, that is not a direction that we're going to head."

There's a good chance HP will produce smartphones based on Microsoft's upcoming Windows Phone 8 simply due to the other Windows 8-based form factors the company plans to produce. These include desktops, laptops and the 11-inch Envy X2 hybrid tablet/laptop which just recently made an appearance at the Intel Developers Conference. But its efforts may be more enterprise-focused than consumer-based to serve as an added value for businesses.

"Email is one thing, but gaining access to confidential corporate data and true enterprise applications and being able to lock down and encrypt the data that's on the phone itself will become much more important," said Patrick Moorhead, principal analyst at Moor Insights and Strategy. "You can administer a Windows 8 phone similar to the way you administer a PC, with encryption on the phone and very well-understood tools to be able to get access to corporate assets."

Whitman didn't give any indication as to when the company plans to release a smartphone, or what platform the company plans to use. Like the Envy X2, HP may rather wait until the last minute before revealing any sort of smartphone plan. Still, expect something to be revealed before the end of the year.

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