Mobile Ecosystems In Flux As HP Exits Phone, Tablet Business

Earlier this week, when Google announced its intention to acquire Motorola Mobility for $12.5 billion, it seemed like a victory for vertical integration. In the tech industry, that jargon refers to companies that control both the hardware and software of the products they sell. Apple does this with its iPhone, iPad and iPod touch. So does Research In Motion with its BlackBerry devices. Proponents of vertical integration say it enables them to make the best possible devices because they can tightly integrate and customize the various parts of their products.
HP, with its webOS operating system from Palm, was another member of this group — up until Thursday afternoon. That’s when HP made the surprise revelation that it would stop producing webOS devices, such as the Pre series of smartphones and the recently launched TouchPad tablet.

There are a lot of ways to view HP’s news, but one is that vertical integration isn’t an automatically successful strategy. It has worked incredibly well for Apple, which now has multiple product lines that deliver a unique yet consistent experience for users and are leaders in their respective markets. RIM, though, is struggling despite following a vertical model since its origins. And HP clearly grew frustrated with its lack of traction in the mobile device market despite its ownership of the oft-praised webOS.

There were warning signs. HP had slashed the price of its TouchPad just weeks after its launch and its Pre3 phone looked likely to miss its planned summer 2011 introduction. The entire company is somewhat in flux, as well. Its webOS announcement was made in conjunction with news that it may acquire a software company called Autonomy and that it is considering spinning off its PC business.
HP’s revelation doesn’t mean the death of webOS. In an August 18 press release, the company said it will “explore options” for the operating system. The wording suggests that licensing webOS to other hardware makers – something HP has publicly discussed in past months – remains a possibility.