ORIGINALLY POSTED AUGUST 21, 2011
Anyone who follows me on Twitter most certainly knows my feelings about what went down with HP and webOS this week. It can be summed up in one word: anger, frustration, resignation, indifference, incredulousness (if that’s even a word, my spellchecker isn’t so sure!) and amazement.
It helps to understand where I’m coming from, where I’ve been, to understand my feelings now. Nearly two years ago Apress asked me to write a book on (then) Palm’s new webOS platform, to which I promptly replied: “What the hell is a webOS??” Fortunately, the editor I worked with put me in touch with Mitch Allen at Palm. Within a few days, Mitch very kindly sent me a free Palm Pre, then still brand-spanking new, a few chapters of his own as-yet to be released webOS book, and I got to have a very nice conversation with him talking about webOS, Palm’s vision for the future, etc.
I was stoked, to put it mildly. It sounded like Palm had finally done what I and others certainly had always thought was a natural evolution: they’d basically taken a web browser and ran an operating system in it (yes, I’m oversimplifying quite a bit and leaving out a bunch more, but from the perspective of an application developer, which is what I am, that’s essentially what it is). What I saw was extremely impressive. All the adjectives frequently used to describe webOS applied: elegant, simple, logical, beautiful, etc. I was excited and I got to work on the book, got it done, got it published and continued to be a part of the webOS community very happily. I wrote two articles for the Palm Developer Network, a few independent articles for other publications and was working on a number of my own webOS-based project.
I was a webOS fan. No, more than that, I was a webOS EVANGELIST. I got my wife to buy a Pre, her first smartphone… she was reluctant, but I’ll note she’s had some sort of smartphone ever since and if you ask her she’d never go back. I credit webOS for giving her a gentle introduction. I argued with people at work that webOS was the superior platform… my boss and I had some heated debates over the months on this topic 🙂 I’d tell anyone that would listen that webOS was great and they should give it a good, hard look if they were in the market.
Now, a bit over a year ago if I remember correctly, something happened… my Pre wasn’t behaving itself (as, it turns out, was all too typical of that device). Eventually, my legendary temper got the best of me: I threw it against a wall. No, not figuratively, and no, I didn’t just imagine doing it… a Pre, traveling at high speeds, impacted the brick wall in my kitchen, sending pieces flying everywhere.
Now, wanna hear something amazing? IT STILL BASICALLY WORKED!! Yes, it was all busted up, and yes, the keyboard was hanging from the rest of the phone by a ribbon cable… but it turned on, and I could still (more or less) use it! So, for all the “Palm made crap hardware” comments you hear, let that be at least one counter-example for you 🙂
Now, clearly, the condition of that phone wasn’t going to do any longer so it was time to get a new one. Sprint, rightly so frankly, wouldn’t just outright replace it under my extended warranty. They offered to give me a new Pre for $100. Not a bad deal, but the fact is there was a brand-spanking new Samsung Epic 4G sitting on the shelf that I could get for just $200. The screen sold me in a heartbeat, it was, and still is, a magnificent sight. So, I made the reluctant leap to Android.
Now, this isn’t a post about Android, but I’ll tell you that I’ve been rather happy with that decision and I’ve long ago stopped looking back longingly on webOS. And that right there is the first problem HP, as the new stewards of webOS, faced: the competition caught up. I realize a lot of people reading this are diehard webOS fans and hate Android, hate its look, its UX, all of it. But the fact is that most people, comparing the two, don’t see a world of difference… whichever you prefer, the difference is pretty minor nowadays. Where webOS might have kicked everyone’s’ ass in UX a few years ago, that’s no longer the case.
Likewise, we have an Asus Transformer tablet in the house (ostensibly my wife’s, but you know how it REALLY works! LOL)… it’s not as good as an iPad frankly, but it’s pretty good… I’d still have an iPad today, but funny thing, they don’t like being thrown on the floor… but more on that in my upcoming blog post “It’s an inanimate object, how DARE it defy me?! (subtitled Violence Against Technology in the American Heartland)”.
Anyway, flash-forward to now… for probably six months, maybe more, I, like many others, have seen the writing on the wall for webOS. HP was talking a fantastic game, but many of us weren’t buying into the hype. For many of us it was a switch to Android (or iOS) that convinced us the advantages webOS once had were no longer there, or at least not there to a big enough extent to matter. Oh sure, webOS still kills every other OS (aside from the PlayBook’s perhaps) in terms of multitasking, but ultimately that’s only one relatively small piece of the puzzle, it’s not a big enough differentiator.
Then, all of a sudden, less than a week ago, Armageddon. Seemingly, out of the blue, HP decides that because the TouchPad, which was still the new webOS hotness, not being much more than a month old, was selling like an old, used diaper, and so they were out of the webOS device business as of RIGHT NOW.
That would have been shocking regardless of anything else… after all, we heard how they were “doubling down” on webOS, how the TouchPad would propel them strongly into the tablet market… they got Russell Brand and other kinda-sorta popular celebrities to push their wares on TV. It seemed like they were at least serious about being in this market, seemed like they were at least going to give it time to see what happened.
Oh. Oops, sorry, no.
Like I said, this would have been shocking on its own, but it was MORE shocking because I had bought a TouchPad just two weeks earlier! I didn’t so much WANT one as I couldn’t pass up what I saw as a great deal: $317 out the door at Staples for the 16Gb model. Saved a cool $200+. Sure, that’s a good deal given what tablets are going for.
You know what’s a better price? How about $99? Or even $49 at Staples? Assuming you can find stock (you can’t, don’t bother looking) that’s what they’re going for today. Imagine suddenly finding you overpaid for something by roughly $250… wouldn’t be too happy, would you?
So, that was a big part of my anger: I felt personally screwed over by HP. Now, as it turns out, Staples honored my return, even though I was technically beyond their return policy. I got a full refund. So in the end, that worked out. Note that was after trying to sell the damned thing with at least three different deals falling through.
Guess they knew something I didn’t 🙂
Now, to HP’s credit, they’ve since done right by most people with refunds and whatnot. So at this point it’s hard to think that anyone should feel screwed by HP… I mean, aside from those that believed the TouchPad was going to be a viable product for a long time to come. It still may be viable, but only if you change what that term means.
It no longer means a product that will be fully supported. You can no longer expect any sort of updates (you may get some still, but that’s an unknown at this point). Will developers flock to the platform and supply you with a ton of new apps? Well, more on that later, but the answer is more or less no. But, on the other hand, it’s not like the TouchPad as it exists today, the apps that exist today, aren’t useful. For whatever flaws it has (quite a few in my opinion) it’s still a perfectly useable tablet for many purposes. For $49 it’s a no-brainer, even $99 it’s still within “toy” range. Even $149 for the 32Gb version isn’t bad (not sure *I* would drop $149 on it, but it’s not crazy if you do). It’s certainly a better tablet than many of the cheapo Android tablets you can get in that price range, no question about it.
But, on the other hand, it is what it is, today, nothing more, ever.
Now, I’ve been proclaiming webOS is dead based on HP’s actions this week. And if you asked me to bet a years’ salary I’d bet on that being the case without hesitation. Yes, you hear HP blowing smoke up our asses again about licensing it to good hardware manufacturers. webOS is dead, long live webOS! I don’t see how THIS smoke is different than the smoke they blew up our asses when they said they were in this game for the long-haul, but whatever, maybe there’s something to it.
Even if Samsung and HTC, as some rumors suggest, sign on, what will it matter? Will developers suddenly flock to webOS and create all sorts of great new apps? Will people feel they can trust HP going forward? Will their words mean anything? I bet no.
There’s a few interesting possibilities that could make me wrong. First, the licensing thing could work out. They could get webOS on some great hardware, get rid of the flaws in the platform and suddenly have a fantastic story to tell. I frankly doubt this because (a) I’m not at all sure the flaws can be fixed, certainly they’ve been unable to do it thus far, and (b) I’m not sure any company would take a chance on webOS now. Even given that Google pissed off and scared a lot of Android makers with the Motorola deal, so you might think they’d want a backup, is webOS really it? On this front the only thing anyone can say is we’ll see.
But, there’s another possibility… one that’s just so bizarre it might actually be true… and so crazy it just might work…
…MAYBE EVERYTHING IS GOING EXACTLY ACCORDING TO PLAN!
Follow the bouncing ball with me…
- HP releases the TouchPad. It sells like plague-infested blankets.
- HP “decides” to “cut their losses” and announces they’re “out of the webOS device business”. They say they’ll try to license webOS, mostly just to satisfy stockholders for a few days (gotta give ’em hope!)
- HP starts an incredible fire sale. All of a sudden, the 200k units Staples had on hand but couldn’t move (a figure I got from a manager at my local Staples store) and the 200k units (roughly) that Best Buy had on hand but couldn’t sell (as reported last week) start moving like hotcakes. You can’t find the damned things anywhere, there are stories of people lined up waiting for stores to open. This is the case at other outlets like Walmart, Office Max, Amazon, etc. as well.
- So, in the span of maybe 48 hours HP moves, what, a million units maybe? More? The market share shoots up all of a sudden. Yes, HP takes tremendous losses on each device sold, but so what? The customer base they couldn’t develop at the prices they were originally selling for begins to emerge.
It’s not the first time a company has taken tremendous losses on hardware to gain market share in short order.
Woah, is that it? Was that the plan? Well, if so, here’s what I’d expect… a press release, maybe a week or two from now, maybe less, saying something like “Wow, HP is amazed at the outpouring of attention to webOS. Obviously, we were mistaken and there is a HUGE market for our devices. Therefore, we are reversing our decision and will continue to provide webOS devices.”
And that, as they say, gets the balling rolling in a big way. All of a sudden you’ve got a TON of new users on your platform. So, a bunch of new developers decide to build apps for it… especially now that HP isn’t “abandoning” anything. All of a sudden, HP and webOS go from being also-rans behind iOS and even Android to a more than viable competitor in the tablet space.
And it was all based on a bluff. An expensive, risky, crazy-assed bluff. But you know, history is full of such bluffs working out fantastically well.
Now, there’s of course a downside to this. First, nobody will trust what HP says ever again. At least, nobody that is savvy enough to realize what just happened. The credibility of the company as a whole would take a hit. But, if you really believe in webOS as a platform, maybe that’s a risk worth taking. People will certainly forget a few years later, especially if all of a sudden you’re #1.
And if you think about it, what company other than HP could pull such a bluff off? You need a boatload of money to find the losses acceptable. Check (well, more or less). You need a platform that, generally, is regarded as viable. Check. You need a crazy CEO to come up with it and have the testicular fortitude to execute the plan. Check… maybe.
Do I think this is the case? No, not really. I wouldn’t bet my kids’ lives on it, but I wouldn’t be shocked to find it was the plan all along either. Like I said, it’s just crazy enough to be true!
No, what I really suspect will be the case is HP *might* be able to convince one manufacturer to take a chance on webOS. They’ll build a device or two, probably wind up being decent enough, but webOS will just wither and die over the course of maybe a year, two at the most, because no developer wants to take a chance on it. The sudden influx of new users we have this weekend will convince a few, and there will be a few new apps, and you might even hear a success story or two from a developer here and there (developers with existing apps will see a decent bump in profits, if only for a brief moment in time)… but this will be a short-lived uptick for webOS, it won’t last.
But, if the wild-ass conspiracy theory turns out to be true… well, I won’t exactly die of shock either! I could see it, I really could.
One last point I want to make here is this… if nothing else, HP has done one thing that ALL tablet manufacturers should be looking at today… for those that say “What the hell good is a tablet? That’s not a viable market!”, well, HP just proved you very wrong. They proved, beyond the shadow of a doubt, that there IS a tablet market, an even larger one that Apple or Android has tapped thus far, waiting to be opened. The key is pricing boys and girls. The first company that gets a high-quality tablet on the market for under $200, I’d bet my left kidney, will make a SERIOUS dent in the iPad’s dominance. People WANT tablets, and I mean mom and pop, not just us geeks and not just executives trying to impress their underlings… people just don’t want to pay what they see a ridiculous prices for them. Now, $49 or even $99 probably isn’t right either… but $199? Are you telling me that’s not doable? I bet it is, by the right company. Amazingly, HP was and still is probably in the best position to be that company. Apple won’t drop their prices enough to get there, the Android makers might not have the scale and presence to do it. But HP could I suspect. Might we see a TouchPad 2 for $199 in six months? Quite possibly. Then you’ve got a million+ practically “built-in” customers overnight, and a lot more who will be more than willing to drop that kind of coin, recession be damned! Especially when they want to keep up with the Joneses down the street who all have TouchPads (by then they’ll forget they got them for $49, or won’t care, they’ll just HAVE to have them then!)
If HP realizes all this, all they actually need to do is execute a crazy-ass plan right now to increase market share… hey, wait a minute… 😉
Addendum added 8/30…
Just as a quick follow-up, although its a bit tangential I think it plays into all of this… there’s one company here that I think has perhaps the best shot to unseat Apple in the tablet market… it’s not HP, it’s (most likely) not Google… It’s Amazon. We all know at this point that they have a tablet coming out this fall. We don’t know much about it but we assume its Android-based (and really, what else COULD it be anyway?). I’d bet a large wager that the price point they come out with is $199 OR LESS. And, I think it’ll be a very good tablet, comparable to an iPad or anything else. I suspect they’ll take a loss on each one sold and that’ll be their strategy. They’ll be playing the Sony game as they’ve always done with the Playstation: sell the hardware at a loss and make it up with content.
Amazon is ideally suited to making this strategy work in the tablet market. They have hardware experience now from building Kindles. They have content to sell in the form of eBooks, movies and music. They could make the loss-leader strategy work in this market, and there’s probably nobody else aside from Apple that is capable of pulling that off.
Now, Amazon has its own problems… it pissed of developers with their handling of the Amazon App Store for Android. They have some work to do to rebuild their reputation there. They have to come up with a loss number that’s not TOO high, and that’s gonna be tough based on current teardown costs of various tablets… could they really do THAT much better in terms of cost than anyone else and yet STILL produce a really solid piece of hardware? That’s a tall order for anyone, perhaps most of all a company that isn’t a hardware company to begin with.
Still, I have a strong sense that in a years’ time we’ll be looking at a two-horse race in the tablet market, the perennial Apple, and Amazon. Will Windows 8 on a tablet be able to break through? That’s at least a possibility, but I wouldn’t bet on it, at least not in the short-term (like < 3 years). And even if HP revives the TouchPad, as the today’s rumors suggest they may (which, FYI, is perfectly in line with my theorized “secret master plan”!) I still don’t think they’re going to be anything better than third this time next year, and probably a fairly distant third at that (although they’ll be able to say the strategy worked, if my theory is correct, since they’ll at least be in the race, nominally anyway).