Editorial: HP running out of second chances with webOS

It’s August 5th, a little over one month since the release of the HP TouchPad. Announced in February, there has been a slow march of hype surrounding the first tablet with webOS. We’ve seen this before with the original Pre launch. This time was going to be different. It was also an opportunity for HP to flex their marketing muscle beyond that of the cash-strapped Palm. Despite their best efforts, it hasn’t translated into an acceptable sales number. In what can be seen only as a last ditch effort, today we have seen a plethora of deep discounts. Woot, normally reserved for products that are on their way out, is one of many including HP themselves offering $100 plus off the HP TouchPad. Surely, this isn’t what HP management meant when they said the TouchPad would be number 1 plus. What’s happened since the February introduction of these new products and where do they take webOS from here?

HP webOS second chances

Their first product, the HP Veer (see our Veer 4G review), was released in May and officials from the company called it a “soft-launch”. That’s code for no advertising and little to no awareness of the release. Prior to the HP TouchPad release in July, there was an uptick in advertising, featuring the new campaigns with Manny Pacquiao, Amanda Cosgrove and Russell Brand. When the TouchPad hit, the campaigns promoting webOS and specifically the TouchPad, went into high gear. This was the “scale” Jon Rubinstein and fans of the platform felt was sorely needed. Over their history, Palm has had several rise from the ashes moments. The usually unforgiving technology market has provided them with a never ending supply of second chances.

With HP betting heavily on the TouchPad, it was released to lukewarm reviews. A software update seemed to address some of the faults, but there are still large gaps remaining causing the TouchPad to be a difficult sell at retail. Still no document editing. Still no Netflix. Improvements to the lag issue have been made, but after two years, there is still no GPU acceleration. These are all software related and don’t take into account the lackluster hardware. No surge of apps in the App Catalog and no signs of that happening on the horizon. The self-imposed fragmentation of the platform hasn’t helped. The lack of apps was something we addressed weeks prior to the launch. Post launch, HP’s Stephen DeWitt who heads up the webOS global business unit was still claiming that “We have all of the key apps out, and we’re going to have a ton more every day.

The problems facing HP are not isolated to the TouchPad. There is no new flagship webOS phone available at retail. The Veer is a niche phone, akin to the HTC Status. Even if it were successful, it’s not the smash hit needed to bring the platform much needed users. The Centro strategy no longer applies to the current smartphone market. The Pre 3 is still listed as coming this summer. It’s not coming to Sprint at all. Most webOS enthusiasts are also Sprint customers, some of which have jumped to the green robot, despite their immense love of webOS. Releasing the TouchPad prior to or not in unison with the HP Pre 3 was a mistake, but it’s entirely possible that carriers didn’t want the Pre 3. If you are looking to increase your user base, it’s easier to do so with a $199 phone versus a $500 tablet. This is the first summer in recent history when Apple has not released a new iPhone. The window of opportunity for HP was there for the taking. If and when the Pre 3 is released, it will be forced to face the juggernaut that is an iPhone 5 and possibly new low-cost iPhone. It’s just a matter of time before we see the Droid Bionic on Verizon, another huge competitor. Microsoft also plans to have a strong fall push with the release of new phones running the Windows Phone Mango update. By the time the Pre 3 hits the streets, it will effectively be a phone that is six months old, facing a slew of heavy competition.

HP faces the same challenges that Palm has over the previous two years. The App Catalog isn’t flourishing. Palm has tried contests, but it hasn’t worked at the level needed to spark any sort of serious interest from developers. Developers are waiting for users. Users are waiting for apps. It’s the catch 22 facing HP. The lifeline of webOS has been it’s superior multitasking and notifications. Those are not enough to entice the mainstream consumer. It remains to be seen if price breaks will be enough to generate the sales needed to build the user base. How will these price breaks affect the profitability of webOS for HP? Will HP be willing to accept little to no profit on hardware?

It’s imperative that HP deliver the Pre 3 post-haste and must come to the realization that webOS products can no longer command premium pricing. A late summer release of the Pre 3 priced at $199 (with a 2-year agreement) is not going to turn the tide. A platform with so much promise is running out of second chances.

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