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« WOW! Did not see this coming. HP ends Palm/WebOS based smartphones | Main | Why Europe Is So Critical to Nokia in Smartphones: The Symbian S^3 Sales Pattern in Q4 »

August 21, 2011



What to say, at least Elop gave the world lots to discuss about with the conspiracy theory, beeing or not beeing him a trojan horse etc...

But here the only think that comes to my mind his simply: those CEO don't have the balls to fight in his own territory.

Dear Apotheker if you feel not up to the task, do a simple think: resign. Don't try a big strategic change just for the sake of a big move at the expenses of the employees.

I see Apotheker living the company in a few years if not months, just the time to find another job and before the results of this move get apparent


What's HP's "EFFECT" status? Looks to be the Elop effect on a fast-track!


Another Stephen EFlop in the making. Hmmmmm... I wonder why these so-called "EXPERIENCED" CEO's make the WORST STRATEGIC BLUNDERS IN HISTORY most especially when they had enough experience from the likes of Microsoft and SAP.

I don't think they will like the idea of being the subject of scrutiny in MBA classes anytime soon.


bada vs. webOS:
bada devices don't sell as smartphones - they're touchscreen phones where the possibility to install some apps from a limited catalogues is an added benefit. They compete with feature phones on a feature/price combination. Samsung has the scale and experience in the mobile space to keep the price down, and the operator relations and distribution in place to push the phones - in a lot of cases probably occuping portfolio positions and shelf space where previously Samsung feature phones were. My guess is that a large part of bada sales are replacements for what would have been Samsung feature phone buys. So bada is presently both a way to get more features onto feature phones easily, and a hedge against trouble with Android down the road.
webOS on the other hand is/was most definitly a smartphone OS. One that would have only worked with considerable investments in better hardware (HP would probably only have been ready to release own designs by the end of the year), wooing developers, paying some for important apps etc. The ecosystem was very limited, a single manufacturer had already managed to fracture the OS, and there was no buzz anymore. HPs PDA expertise is long in the tooth, and not all that useful in today's world, and I sure missed that they ever made phone. Smartphones is not even a bordering business. Guess they did the math from their perspective and decided against a long shot. Seen together with the move away from the consumer PC business, this makes perfect sense.


Bill Raduchel, Twitter: "CEOs remake the company into one they know how to manage. Period. Full stop. Regardless of whether that is best."

This explains both Apotheker and Elop. Apotheker knows how to run "business software company" so that's what he tries to make HP into. Elop knows how to sell the software - and that's how he approaches Nokia's plight.

In software there are almost no "Osborne effect": since maginal cost is basizally zero you can easily sell two-for-one and get money for tomorrows product today. Sometimes said product never even materialize:

And because "ecosystem" in software is basically everything (very-very strong network effects favor first-mover over quality) this is what Elop trumped from the very start. Ecosystem is increasingly important in smartphones as well (not just pure apps: a single "netflix app" is worth more then 10'000 of other, "normal", apps), but smartphones are also a hardware and there are pesky carriers in the equation, too.

This is why "experienced" CEO's make one blunder after another: they can't succeed using past experience (since they usually move from industry to another and rules there are different), they can't succeed using advices from underlings (companies where underlings know enough to drive company to success rarely need new "experienced" CEOs), so their success is a gamble. Sometimes it works, but more often it fails. The fact that sometimes they succeed despite all the odds is what's surprising, not the fact that usually they drive the company to the ground :-)


The biggest difference between HP and Apple is that Apple is 90%+ focused on consumers (by revenue), and HP is 75%+ focused on enterprise sales. For the most part, HP sales of PCs have been in support of enterprise services. And now they see enterprises wanting to buy iPads not TouchPads. And same in not wanting webOS-based smartphones.

Plus, HP's PCs have not been driven by innovation. Without owning the OS, that was a commodity business mostly supported by upselling PC support services and software to enterprises.


"If the world's biggest tech company, twice the size of Apple..."

That's no longer true - over the last 4Q Apple has made over $100B dollars and is just behind HP. Over the next 2 quarters Apple will surpass HP in revenues.


Not to pick nits, but HP does have their own flavor of Unix: HP/UX. Much like Apple has their own flavor of Unix with OSX.

Tomi, do you need someone to fact check for you before you post these things? You're getting quite sloppy.

Jonas Lind

According to an article in The Next Web (“An inside look at HP killing webOS hardware: Here’s how it really went down”) HP is NOT going to dump or sell webOS, just the underperforming device division (Palm, Touchpad). HP plans to license webOS and/or use it for something else.

If that is true it is almost rational. HP’s internal HW engineering teams have not been able to deliver and keep up with competition. This is most likely due to lack of commitment/resources/attention from HP top mgnt.

It could possibly also be caused by the “PC-culture”, where products are assembled by standardized components. Such an environment lacks the understanding that a smartphone has to be developed as an integrated product with all attention on maximizing performance and making all components work together.

I hope HP really commits to webOS and aggressively license it.


Few times in history OS "survived" the closure of hardware (NeXTSTEP, EPOC, etc). But I never remember a transition where OS actually survived: this "survival" ivariably lost the ecosystem (you can not run NeXTSTEP software on MacOS X or EPOC software on Symbian). So... WebOS is well and truly dead... even if something else can still spring from the ashes.



I agree that HP is an enterprise company - and that their desktop PC business always seemed the odd one out among all their other products. At any rate, most of HPs PCs are all designed and built by the likes of Quanta and Compal and HP does little other than stick their label on them. There are only a handful of models where HP takes any serious role in the design/engineering.

I've always felt that consumer devices have been a bit of an exception among HPs various businesses. The company's focus has always been on the enterprise part of their business and the consumer part - their success in PCs, printers and calculators notwithstanding - always felt like an afterthought.

Which is why the purchase of Palm surprised me so much. Smartphones are increasingly becoming consumer devices and it felt like a significant change in direction for HP. It stands to reason that they want to move back to their comfort zone. My problem is, why is HP giving up so soon? What were they thinking when they bought Palm? Did they seriously think that all they had to do is show up and people would start buying their stuff? They should have known when they bought Palm that success in the smartphone market would require a lot of time and money.

Anyway, I hope someone picks up WebOS and puts it on devices that do it justice. From what I have seem, it is the only OS that matches iOS in terms of ease of use. If it gets put on the right devices and is well marketed it has a good chance of doing very well. It is a pity that there aren't any companies with the guts to go through all the necessary pain to make it a success.



em... worst then the burning platform memo communication.

How can they mismanage such important communications this way. I'm more prone to believe that the article is just an attempt to recover partially the situation.
If they really planned to chenge the business model only they have split the process in various steps:

first communicate the want to license webOS to third parties
second find a licensee
third see how it go
four if the partner demonstrate to do significantly better then HP itself then dismiss the HW side


I think buying WebOS was a mistake.
I don't think Leo Apotheker is a capable CEO.
I think no one at HP currently knows what they have meant with their PC spin off announcement.

Looking at HP you can see two divisions:
- Enterprise services (SW, Server and related HW, technical services). This is what Apotheker wants to strengthen.
- Consumer products: PC's, Lap tops and - don't forget: Printers.

Now, printers are HP's cash cow. Strategically they belong to consumer products and should be spun off too. However HP will suffer a lot losing their printer division, therefore they won't do it. And that's why spinning of PCs is a bad idea.

In order to stay in the game HP needs to stay in the consumer business, and add smart phones and tablets to their portfolio. I agree that using WebOS is too expensive and takes too long, so they just should join the Android bandwagon and deliver low margin handsets and tablets just to stay in the consumer business and earn a golden nose selling printer ink. If they don't, cash from the printer division will go away too, sooner than later.

And Apotheker should stop overpaying for enterprise SW. Autonomy has what, a Billions Dollar revenue per year. And he wants to pay how much? - 10 Billion? Does this remind anyone on Nokia's purchase of Navteq, which made strategic sense but was horrendously overpaid?

Tomi T Ahonen

Hi everybody

Thank you for so many comments so quickly. Wow. And on a Sunday at that! I'll respond to all of you individually as is my custom on this blog but as I am on summer vacation, it may take some time to get to all. I'll start with a few now

Hi Titanium, LeeBase, nuna, Jessie and gzost

Titanium - excellent point of view, totally agree and I hadnt' thought of it from that angle yes. This is sign CEO is over his head (I had been thinking of that with Elop too, that there was the 'right way' to fix Nokia which would take blood sweat and tears, take years, and in Elop's mind, had no guarantees of ever succeeding even - or take the shortcut, the gamble, run with Microsoft and torpedo any alternative scenarios..) Yes. The 'honest' CEO would resign. But at that level probably the ego has to be enormous just to get you to want it so bad to make it to the top haha..

LeeBase - you're right, HP culturally and from its business practises etc is like IBM was and Oracle, but I was comparing it to other companies involved with smartphones today, and of companies structured in terms of businesses they are involved with - that are most like Apple. And it really is the case, that of any tech company, HP competes in more areas directly with Apple (and of the remaining non-overlap has the least of businesses where they don't meet) than any other giant corporation.

Also yeah, we agree crazy they quit smartphones so early, but I also agree in long term smartphones will commoditize and will mimick pattern of PCs - but that is not today. If you had to start from scratch, build a brand, build factories, design phones, start to sell them - then you'd spend billions getting foot in door and might not even turn a decent profit by the time most of the business is in box-mover stage. But Palm/HP is ready to sell massive quantities now, if HP had just taken the Palm as it was, rebadged it with HP, and given the Palm team the money to hire sales and marketing to get it onto every network out there. Palm would be at 5% market share today, not bada...

nuna - haha, yes and stock market was particularly cruel to HP immediately. But I don't think this is 100% wrong thing for HP to do, the shift from low-margin desktop PCs especially is wise but then the profit in PCs is now in tablet PCs (at least in terms of iPad haha) and obviously then in smartphones.. So this is more a case of 'throwing the baby away with the bathwater' - destroying the gems while throwing out the garbage..

Jessie - haha good.

gzost - first, sorry for mis-identifying you (see below). Secondly, on 'bada doesn't sell as smartphones' - may be technically true but then we'd need to also discount some 15 million early iPhones or so, which were also only featurephones by definition and didn't do apps etc. That the consumer today isn't buying the phone 'to be a smarpthone' (and whose to say many aren't - they are priced far below the iPhone but sold in many markets where the iPhone is beyond reach, so it may be the poor man's iPhone haha) - is not relevant in building an installed base. The bada ecosystem is growing rapidly, the number of apps (especially games) is growing very strongly and some day those bada phones may be as eagerly used for Angry Birds as the iPhone and Androids are now haha..

khim - first, I am VERY sorry. I loved the quote you gave from Bill Raducher. LOVED it. I immediately tweeted it, and came here to the blog to get Bill's name spelling to see also his Twitter handle, and then came here to see who was the nice person who mentioned it on the blog, and thanked that person immediately on Twitter as well. But in my haste, I looked at the wrong comment and accidentially identified gzost as the source of the Bill Raducher quote. Sorry to both of you.

khim I will correct that when I return to Twitter. And onto the issue - perfect point, it explains completely both Elop and Apotheker. And BRILLIANT observation about no osborne effect in software haha. Brilliant!

What I had been saying, if Nokia did the best thing for Nokia, it should have brought in a CEO from a carrier/operator - they are the entities that authorize and often also physically buy the actual handsets sold in their countries and used on their networks. So if the new CEO is competent on the basics of business management (strategic thinking, team management, motivation, speaking to the press and investors etc..) then the ideal boss for Nokia to evolve into the future is someone whose background is the customers who buy Nokia's products (also its networking gear).

Thank you all for writing

Tomi Ahonen :-)


@khim: Thank you for citing the article "1990-1995: Microsoft’s Yellow Road to Cairo" above:

Very interesting read. I now find many nice articles from the same site, including:

Anyone interested in the platform wars will find lots of interesting articles about the history of OS platforms at that site. Thanks, khim, for a great tip.


Well, the roughlydrafted is interesting read, but keep in mind that author is clearly an Apple fan so you need to filter that out. As faithful Apple fan he posts articles which explain why Android is doomed
then it explains that it has a little life left, but will die soon
so predictable latest article which explain why Android is REALLY, REALLY doomen and soon Apple will FINALLY win does not look all that convincing

But yes, if you filter out overly-rosy Apple-colored passages the site contains a lot of information to chew on. Unlike most Apple fans author does include correct facts in his articles and only tries to show them in Apple-fovorable light instead of using wild fantasies.


@khim, I'm reading archived articles on roughlydrafted right now, and yes, he definitely has the highest respect for Steve Jobs and Apple, although to be fair, isn't this respect deserved? Roughlydrafted's take on Google OSes and Android is maybe premature: he makes many good points about weaknesses in the Android platform and Google's strategic approach with Android and Chrome which may play out in the future, Android's current legal challenges just being one of them. roughlydrafted's take on Microsoft, though, is scathingly accurate, wouldn't you say?

His history of OS development:

SCO, Linux, and Microsoft in the History of OS: 1990s
SCO, Linux, and Microsoft in the History of OS: 2000s

Anyway, not to put the guy on too much of a pedestal, but he writes well and is focussed on platform issues. Thanks again for the cite.



Daniel is a Apple shareholder, and writes as one. I don't think roughydrafted can be taken as a valid source of information.


Knowing what he knows he'd be foolish not to be an Apple shareholder, presumably now a wealthier one. is great for its histories of OSes and glosses of issues, like the Flash and Java. Any Nokia stakeholder interested in what they're getting into with the Microsoft/Nokia deal should head to this site and click on archives and then history for a series of interesting articles and pick up the thread at any point. You'll get engrossed as I have. He's also author of Snow Leopard Server (Developer Reference) [2009], so he knows what he's talking about when it comes to software. To ignore his histories and points of view because he's committed to Apple OS and owns Apple stock is to deny yourself well contextualized information because you fear it might hurt your sensibilities. I'm still in the '90s of the history articles I cited above having gone back to the beginning of the series and worked up to the '90s. Really worth reading if you're interested in how we got to this point in consumer OSs.


@Donald: Just because someone is an Apple shareholder doesn't mean that what they write is not valid; and conversely, just because someone is not an Apple shareholder doesn't mean that what they write is valid. Weigh it just as you do everyone else, including Nokia and Google shareholders, based on how close to the "truth" it is.

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