HP Shifting Resources from PCs to Tablets

During the Morgan Stanley Technology, Media & Telecom Conference on Tuesday, Hewlett-Packard CEO Meg Whitman said that the company is shifting resources from PCs to tablets. She said the market moved extremely fast to tablets and smartphones, and HP now needs to manage that transition.

"And it's not that HP didn't try to manage that transition -- they did with the acquisition of Palm," she said. "But as you know, under the previous [management], that took a little detour to nowhere."

HP placed all bets on the webOS operating system when it purchased Palm for $1.2 billion back in 2010. The company planed a long string of smartphones, tablets and PCs based on the platform once the first tablet, the TouchPad, wowed customers. But that never happened, and the doomed device was discontinued less than two months after it hit the market.

In August 2011, then-current Leo Apotheker announced that the company would dump its plans for webOS and throw the non-licensed components into the open-source community. He also mentioned that the company may spin off its personal computer business.

"We believe this bold action will squarely position HP in software and information to create the next-generation information platform," Apotheker said. "This is about a transformation to position HP for a new future and driving shareholder value."

Apotheker was replaced by Meg Whitman as HP's CEO a month later. "I think that what you have at work here, and which may be for the good of the company, is someone who very much has a bit between her teeth and wants to do this job and take on this challenge," Golden Gate University Dean Emeritus Terry Connelly said. "In all fairness, that's what Hewlett Packard needs."

This week during Mobile World Congress 2013, HP revealed a 7-inch Android tablet it plans to sell for $170 USD, a pricetag that's far less than Amazon's own Kindle Fire HD and Google's Nexus 7. It's even less than Apple's overpriced 7-inch tablet, the 7-inch iPad mini. It's also significantly less than what HP charges for its business-oriented Windows 8-based ElitePad 900.

That said, HP isn't bailing out of the PC industry, but merely shifting some its resources away from a declining market to invest more in a lucrative one: tablets and smartphones. "Innovation is not dead at this company," she said. "So, what I did is I increased RD spending...we have to get these products that are close to market to market fast."

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