With HP’s decision to stop making WebOS phones and tablets, one thing is painfully clear: Being like Apple is tougher than it looks.
Apple CEO Steve Jobs famously said that his company “creates the whole widget,” from hardware to software to services. By comparison, hardware makers like Dell, Samsung and Lenovo are at the whim of Microsoft and Google, who respectively license their Windows and Android operating systems and don’t build any hardware themselves. In recent years, Apple’s strategy has worked out beautifully. Even though Android has more market share than the iPhone, Apple makes more money from smartphones than any other hardware maker.
So when HP acquired Palm and its WebOS software last year for $1.2 billion, the strategy made a lot of sense. After years of building Windows laptops and desktops, HP wanted its own widget to control. In February, the company announced a pair of new phones and the TouchPad, a WebOS tablet. HP also spoke of bringing WebOS to printers, automobiles and even home appliances like stoves and refrigerators.
But HP’s execution was flawed. According to The Next Web, Palm’s tablet hardware was already in the pipeline when HP acquired the company. And from the looks of it, Palm’s smartphone plans were set in stone as well. Instead of releasing WebOS hardware with fresh new designs, HP launched a teeny smartphone (the Veer), a chunky tablet (the TouchPad) and yet another spec boost for the Pre (the still-unreleased Pre 3), whose predecessors never sold particularly well in the first place. Also, HP didn’t control quite as much widget as Apple, because it was still relying on other companies to build its processors.Since the iPad and iPhone 4, Apple has designed its own chips.
Even worse, HP failed to cultivate a decent ecosystem of apps. It’s hard to find an official count, but I’ve seen recent estimates of between 8,000 and 10,000 WebOS apps, and that’s more than two years after Palm launched the first WebOS phone. Microsoft’s Windows Phones, by comparison, hit 11,700 apps in less than one year. I offer Windows Phones as an example because, like WebOS, they haven’t been a huge hit, but developer interest remains strong.
To top it all off, the TouchPad was buggy and sluggish at launch. Although a software update later alleviated some the TouchPad’s issues, reviewers could only critique what they were given: an unfinished product.
Turns out, controlling the whole widget is a massive undertaking. After acquiring Palm, HP suddenly had to create innovative hardware, squash bugs from its software and encourage developers to build cool apps. In the case of smartphones, they also had to build relationships with wireless carriers, who ultimately subsidize and sell handsets to consumers. All of that is a huge leap from installing Windows on laptops and PCs and shipping them out the door. If no one’s buying the product, why bother with all that effort?
Strictly from a financial standpoint, controlling hardware, software and services is the way to go. Companies who do so get to control their own destiny, as Ben Bajarin put it, while also reaping all of the rewards. But in the smartphone and tablet market, I’ve yet to see evidence that anyone but Apple can pull it off. Palm failed, which is why it had to be sold to HP in the first place. Research in Motion is struggling. Nokia gave up on its MeeGo OS and is now working closely with Microsoft. Google plans to acquire Motorola, but promises to keep Android open while running the hardware company as a separate entity.
I’m not saying that Apple’s the only company that can control the whole widget, but right now, no one else can be bothered to put in the effort.