A simple explanation for why HP abandoned Palm and is getting out of the PC business

“HP acquired Palm at the end of April 2010, for $1.2 billion. HP’s CEO was Mark Hurd,” John Gruber writes for Daring Fireball.

“Three months later, in early August, Mark Hurd was forced to resign over that scandal with forged expenses and lies about his lady friend,” Gruber writes. “HP then named Léo Apotheker president and CEO on 30 September 2010.”

Gruber writes, “The thing is, Apotheker’s relevant experience was serving as CEO of SAP. What’s SAP? SAP is an enterprise software and consulting company. Honestly, we all should have seen this coming. You don’t bring in an enterprise consulting guy to turn around a PC and device maker. You bring in an enterprise consulting guy to turn a PC and device maker into an enterprise consulting company.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Sarah” for the heads up.]


  1. They must mean BACK into an enterprise consulting company. Back in the day (70s & 80s) both Digital and HP were big in the Micro and Mainframe computer world with large consulting groups to assist the customer with their computers. After all, there weren’t too many skilled computer people out there at the time. But with the advent of the PC platform (Apple & IBM’s creations) the larger systems were dropped in favor of the desktop. While both DEC & HP still maintained their consulting organizations (and are now one), they became the red-headed step-children of the company in favor of the desktop & printer organizations. Now it looks like their time may be coming once again. BTW, DEC was purchased for it’s services organization, not it’s hardware system, so even Compaq recognized the value of the services/consulting organizations.

    1. Just curious as to why you thought it was smart at the time?

      I thought it was incredibly insane. WebOS had already failed under Palm. It was too little, too late and had no ecosystem, developers, or user base. HP brought nothing to the table that could help it except for cash, and that would only last as long as their patience for losing money.

      The only thing I thought HP would get from Palm was an OS that could be used for printers. You remember those things we used to use before just keeping documents on our iPads?

      However, for printers, tablets, or phones, it didn’t make sense that *if* HP was going pursue this, that they would do so by buying Palm when they could’ve just gone with Android…and still failed, but saved $1.2 billion.

      1. It made sense in the same way that Apple buying a failed Next in 1996/97 made sense. It gave HP the potential to control its own destiny in the consumer mobile space.
        BUT… it took Apple four years to deliver a working version of OS X in 2001, then six more years to morph into iOS in 2007 even with Steve Jobs firm leadership.
        I always thot it would take HP at least 3 to 5 years to forge something great out of Palm but they didn’t even have the patience to go 18 months. And I still don’t understand why they didn’t get the Pre3 out the door as quickly as possible, even if it had been just a moderate hardware/OS update they might have kept the train moving forwards. In my opinion, starting on the TouchPad before the phone was a huge distraction that might have derailed the whole train.

        And Apotheker clearly had no intention or vision to see the potential in Palm. Once he came on board, I think Gruber is absolutely correct. Palm OS didn’t have a snowball’s chance in hell.

      2. webOS was a fast track into mobile device independence because the OS was (and is) pretty good. Someone with the resources like HP could weather the short-term storm and create an Apple-like experience for developers – one OS, one set of device parameters, no fragmentation.

        But unfortunately for webOS, HP pushed the eject button very quickly. It really should have tried to sell webOS to someone, like one of the Korean device makers, even retaining Palm’s IP.

  2. Wonder of wonders. having worked many years in high tech and observed to way executive staff gathered bonuses for purchases and mergers that made no sense, if I were an HP shareholder or a board member or any other entity that might have an interest, I would investigate one issue – how much did Hurd and his buddies make in bonuses directly tied to a very stupid purchase. Same for Fiorini and any other money hoarding executive that has destroyed a once great company.

  3. I seem to remember one of the stated aims at the time of the Palm buy out was that HP were in a position to build the right hardware Palm needed and that action was most likely taken whilst Hurd was at the helm. That being the case, Hurd set them up for future failure with poor design decisions from the getgo… and poor they were. Having played with a new out of the box Touchpad, I was staggered that anyone would even consider it a legitimate alternative to the iPad. It was truly awful. Same with the Galaxy Tab – just not up to the marketing level they pitched it at. Neither would remotely tempt me to trade in my original iPad.
    iHating certainly seems to blind you to the bleeding obvious.

  4. This is really a sad day for HP. Just like IBM, Motorola (most of Texas Instruments), they have moved away from the core business that made them money. They forgot to Innovate hardware.

    Some sap CEO that knows nothing about HP core business will toss all this skill-set into the trash so the great HP can become an enterprise software consulting company. In other words they gave up, and now are going to ride off into the sun set.

    HP will now make nothing, innovate nothing and walk away from everything. This CEO will give away their core business to some China company, for a few billion, leaving no one to challenge Apple.

    HELLO, Apple needs to be challenged!

    1. I totally agree. This is a sad day for HP going the way of IBM. HP was the only challenger left for Apple. All the other PC makers makes crap compared to HP. They were the only ones that made good quality PCs like Apple. They were a good PC maker. Even their printers are good. At least they will still be making printers according to reports. Now there is no one standing in Apple’s way now to challenge them. The time is right for Apple to strike while the iron is hot.

      1. Having spent the last 15 years in IT, I can tell you, that you are dead wrong. They do not make good computers or printers anymore, cheap commodity junk just like dell. Dell even makes better servers than HP these days. The tried to make Apple like computers, but they used cheap materials and components. Ever seen the “ProBook” crap plastic 17″ Apple wannabee. HP has been in decline for years now. Ten year old HP laser printers still in action, five year old models of the same line are at the recycler. They raced Dell to the bottom and destroyed Compaq. Good Riddance to HP.

    2. Sorry, but HP saw the writing on the wall with being a PC assembler. The margins are simply too think to keep expecting to make a profit.

      HP will keep its printer business going; that makes too much money and fits with its business model going forward.

  5. It’s the Gil Amelio factor-Apple circa 1995-6-7-8-9.

    And the public’s(god bless their stupid little plaque encrusted hearts) just beginning to realize that Windows just wasn’t made for the average consumer.

    I need a Vicodin

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