HP WebOS Business Execution Failure

I must confess at being surprised that HP announced today that it is departing tablet market it recently entered as well as the smartphone business. Additionally, HP is stopping all hardware development around its proprietary WebOS operating system acquired with the PALM acquisition nearly 18 months ago for $1.2 billion.

While you have to applaud HP for quickly recognizing that it couldn’t compete against the Apple iPad and other Android tablet products, how is it a company like HP can realize within weeks of entering the market that there was no market need or demand for its creation? How is it they allowed major retailers like Best Buy to purchase a significant amount of inventory that no one will want?

In desperation, HP dropped the tablet price $100 within a couple of weeks after launch killing its margins in the hope that customers might take a closer look. This is like seeing “price reduced” on a home for sale sign. You know it was either overpriced or there’s something just not quite right about it. For HP, it didn’t work. It’s stunning really. This is a colossal failure of execution.

The Apple iPad has been the dominant market leader since its entrance in the market back in April 2010. [Note: It seems like the Apple iPad has been in the marketplace much longer doesn’t it?] No new market entrant has captured the excitement or even come close to capturing the market share enjoyed by the Apple iPad. And now, we see what a steep mountain Apple has created for its competitors.

I only recall a couple of news highlights around the announcement of the HP tablet:

  • It was no where near what an Apple iPad is
  • Performance issues undermined the user experience

These bullet points wouldn’t make me take even a first look if I was in the market for a tablet device. If the marketplace instantly recognized these gaps, why didn’t HP? What should have happened to prevent this embarrassing debacle?

HP has to have had a stage gate product development process in place to validate the market need and govern the development of products. As the product continues through the development process, there are gate reviews to see if it still makes sense to move forward with the next phase of the project. If not, you stop and figure out whether you can correct the deficiencies and continue on or stop the project all together. HP had multiple opportunities to do this. Yet, there is evidence that this did not occur.

There had to have been huge red flags that were known or ignored at different phases during the process. For example, one of the huge user benefits of the Apple iPad is the seamless iTunes eco-system that enables applications and music to be downloaded. HP provided no equivalent functionality for its device.

For this product to have made it the marketplace suggests a lack of discipline in following its stage gate product development process. A group of people were apparently in denial, thought the gaps wouldn’t matter and they should continue on. What poppy cock.

As of this writing, HP is telling its employees and analysts that it still plans further work around WebOS and hopes to license it to other companies. If you were a hardware manufacturer looking for a software platform, would you choose WebOS? Not unless you were on a suicide mission. What would your investors say? If a company with deep pockets like HP can’t make WebOS viable in its products, who else would give it even a passing thought?

Say goodnight to the HP tablet. Say good-bye to WebOS. Say hello to an execution failure that will be fodder for business schools for years to come.

Dave Gardner Gardner & Associates Consulting


© 2011 Dave Gardner


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