New Turn: Hewlett-Packard’s webOS Surrenders to Apple’s iOS, Plans PC Exit

The world’s largest PC maker, Hewlett-Packard, announced Thursday that the company is considering a sale of its personal computer unit and will kill off its Web tablet, launched only a month ago.

The decision has come just a year after HP spent nearly $1.2 billion in buying Palm and its webOS business to have its own operating system. Hp will now halt production of its webOS devices such as the TouchPad, and will buy British software firm Autonomy Corp for $10.2 billion.

(WebOS) was a great operating system. Everybody was pulling for it, but a lot of people weren't buying it, Avi Greengart, an analyst at Current Analysis, told Reuters. It's hard to compete against not just Apple but the ecosystem Apple has built, which includes apps content and services. There were also a lot of missteps such as launching it (the TouchPad) a month before it was ready and pricing it the same as the iPad 2.

HP, in the meantime, reported its fiscal third-quarter earnings earlier than expected, Reuters reported.

The company seems to be copying IBM, which sold its PC business to Lenovo in 2004 so it could focus on business servers, software and services.

The challenge for HP would be to deliver a knockout blow. $10 billion is 25 times 2012 predicted earnings, which is a good price after recent falls in Autonomy's shares, but it would not be deemed an excessive valuation, Milan Radia, an analyst at Jefferies & Co in London, told Reuters. There's no reason why any of the big four or five names should not be interested.

HP CEO Leo Apotheker had previously made no secret of his plans to eventually license webOS to other manufacturers when he told Bloomberg in a March 9 report that such a move would help create a “massive platform.”

The company also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group and that HP will now consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spinoff or other transaction, Reuters reported.