HP Folds the Cards

I read the news today, oh boy.  According to Bloomberg News, Hewlett-Packard Co. is considering spinning off its PC division and that it will discontinue products that run webOS software.  The kill on the HP TouchPad comes about two months after its release.

Since HP lost its way as an engineering company, it has been looking for an identity.  Perhaps a post-computer I.B.M.?  Or, in the same vein, (or vain) an Oracle wannabe?  Either way, leader Leo Apotheker is turning HP into a SAP.

That HP is contemplating “spinning off” the product lines is good news for Samsung.  If Samsung doesn’t jump at the chance to buy the spinoff in view of the recent Google bid for Motorola, it really is a naive entity.  With the momentum that Apple has gained in its patent war with Samsung (and by implication Google) Samsung needs to do something fast.  The preliminary injunction in Germany for it’s tablet (wasn’t that invented by Alan Kay at Xerox Parc in the late 1960’s?) portends an ill wind in the hometown forum of the Northern District of California for this foreign manufacturer.  Not that we locals are xenophobic, but we love a winning home team.

Samsung needs the 2000 patents (not the 5000 previously cited) that Palm collected when it perfected the touchscreen and adapted it to PDA’s and mobile phones.  With the webOS and Apple’s vertical integration business plan, Samsung with its manufacturing strength could take Apple to the cleaners in the worldwide marketplace.

Apple didn’t sue HP, not because it didn’t have reason to because of the defections of key executives from Apple, but because it knew HP could not pull it off with its weak leadership. With the defensive treasury of 2000 Palm patents HP was in a superior legal position.

At the going acquisition rate of $750,000 per blind patent, this is an acquisition cost of 1.5 billion dollars.  Chump change to Samsung.  Thus, HP would net a tidy profit, Samsung would have a credible patent portfolio on mobile touch screen devices, and Google would have some competition as it absorbs a hardware company and becomes more possessive with its Android operating system.

HP, like IBM, can keep its PC patents and still spin the PC part of the failed operation to a Chinese manufacturer that can build price competitive desk top and lap top computers for the rest of the world.

Of course, HP, troglodyte that it is, may simply kill the webOS and like Cisco simply bury a potential ongoing business.

Back in the day, HP was once a great company.


About sfreptile

SFreptile is a relatively transparent pseudonym for an overly educated and cynical inventor.
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