HP Kills TouchPad & webOS Devices, Will Spin Off PCs

R.I.P. TouchPadHP dropped a bombshell or three Wednesday: The company said it is killing off its TouchPad tablet and all other webOS devices (like smartphones), and the company is looking to spin off its PC business, too, a business that currently contributes almost a third of its revenue. The company intends to keep the software side of its webOS business.

The move comes just 16 months after HP bought Palm and its webOS mobile operating system. The move was seen as an attempt by HP to try the whole widget business model employed so successfully by Apple. HP dedicated significant resources to the further development of webOS and devices that used it.

Those devices included smartphones that continued the Palm product line, as well as a much-anticipated iPad competitor called the TouchPad. It was also supposed to eventually includes personal computers, and maybe even an expansion into home appliances and and automotive uses, which may be why the company is planning to keep the software side of webOS.

The TouchPad, however, was the device that had garnered the most attention, and that was largely because of the incredible success of the iPad. The webOS effort was headed by former Apple executive Jon Rubinstein, and the company was delivering a whole widget tablet that was quickly dubbed an iPad killer (before it was actually launched).

That launch was greeted as a major disappointment, however, and this week Best Buy was reportedly sitting on a mountain of the devices that it couldn’t sell and wanted to return. In the meanwhile, Mr. Rubinstein was moved to another area of HP in July, and a new guy was put in place to head the webOS group.

That was just a month ago, but it was apparently enough time for HP to decide there was no future in making whole widget tablets and smartphones, and so endeth Palm in an ignominious sputter.

The other big news from the company is that it looking for options on its Personal Systems Group (PSG), the division that makes personal computers. The official line is that, “HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.”

That means the company could spin it off to its own business or that it could sell that business to another company. In the most recently completed quarter the PSG accounted for US$9.4 billion in revenue, out of the $31.12 in total revenue.

What would be left of HP is a very profitable printer business, as well as the company’s enormously successful enterprise operations. To that end, HP also announced it was in discussions with enterprise software firm Autonomy to acquire that company, signalling that HP sees its future in enterprise, not consumer devices.