Hewlett Packard: confusing strategy changes cost them billions

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Hewlett Packard have a name immediately synonymous with technology. This year however is one they will want to forget, due to a bewildering array of decisions which have cost them literally billions of dollars.

Leo Apotheker, the previous CEO decided that the company should no longer develop smartphones and tablets based around WebOS. The decision to abandon WebOS plans couldn’t have came at a worse time, as they had released their TouchPad tablet. This decision meant that they had to offer the Touchpad at a fire bomb sale price ($99/£90) and they were quickly snapped up by enthusiasts wanting a bargain. A core group of people were already working on porting Google’s Android to the tablet, therefore negating the need for software updates via Hewlett Packard.

When Hewlett Packard bought Palm last year, it cost them $1.8 billion. One of the main purchase points was the operating system code.

The board were (eventually) not happy with Leo Apotheker’s strategy in 2011 and subsequently forced him to leave. The new CEO Meg Whitman has decided not to shut down the operating system team, and instead plans on making it open source, to keep it alive. Clearly the new strategy is to try and build up an audience who like open source software, in a similar fashion to Google’s Android.

meg whitman Hewlett Packard: confusing strategy changes cost them billions

Current HP CEO Meg Whitman: Overturning many of Leo Apotheker's decisions.

Whitman said in a statement released to the press “WebOS is the only platform designed from the ground up to be mobile, cloud-connected and scalable. By contributing this innovation, HP unleashes the creativity of the open source community to advance a new generation of applications and devices.”

Whitman has also added that Hewlett Packard plan to launch two Windows 8 based tablet computers in 2012, and will plan on experimenting with WebOS in 2013. People are understandably confused with their changes in leadership and strategy, and most of the blame has to fall on the HP board, who seem indecisive and confused as to how they can build on the brand name and focus on several key products. 2011 has been an expensive year for the company as their cancelling of products and changes in direction have cost them dearly.

While 2011 has been one that Hewlett Packard would like to forget, they can take some consolation from Research In Motion who have had a worse year, dropping in value from £53 billion to £5.3 billion.

Kitguru says: Let us hope they have a better year in 2012, because the way they are burning through money right now, it can’t continue.

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