HP's tablet exit no signal of iPad immunity, say analysts

Experts dismiss idea that HP's dumping of webOS devices means Apple can't be challenged

Hewlett-Packard's departure from the tablet business does not mean that Apple's iPad will remain the undisputed king, analysts said today.

"WebOS was never going to be an iPad killer," said Ezra Gottheil, an analyst with Technology Business Research. "It did have a chance at the enterprise market, but it was never going to challenge the iPad's very strong position in the consumer tablet space."

On Thursday, HP announced that it would stop making tablets and smartphones powered by webOS, the operating system it acquired when it bought Palm last year for $1.2 billion. The move -- just weeks after HP started selling its TouchPad tablet -- caught most analysts by surprise.

But it's not a signal that Apple will retain its current position as the leading tablet seller: HP's webOS was simply too small a player -- and likely to remain so -- to affect Apple.

"They were the fourth horse in a three-horse race," said Gottheil, referring to Google and its Android operating system, Apple with iOS and Microsoft with its next iteration of Windows, Windows 8.

Chris Connery, an analyst with DisplaySearch, sees the tablet race as even tighter, one between Google and Apple with Microsoft's ability to join the fight still unproven. "Tablets are a two-OS space right now," said Connery. "HP came to the conclusion quite quickly that there wasn't room for three."

Both Gottheil and Connery said that HP's euthanasia of webOS tablets is not a signal that precludes others, especially Google, from challenging or even surpassing Apple.

"There are things Apple just won't do," said Gottheil. "It won't create as wide an array of [tablet] form factors as will Android tablet makers. And it won't compete on the very low end, simply because of [compromises] it won't make."

Challenging Apple may be difficult, if not impossible, today, when rival tablets play in the same band of prices, but that won't last forever, said Gottheil.

"At some point, consumers will break into camps, with one saying 'I want to get something good enough that's cheap,' and the other saying 'I want something that's great.' The first, that will go to Android," Gottheil said.

But it's tough to predict when that will happen.

Neither analyst saw Android tablets on the same relatively-short timeline that developed for Android smartphones, and agreed that it will probably take longer to challenge the iPad than it did to catch the iPhone.

"I think the curve might be a little more difficult for Android [on tablets] than on smartphones," said Connery. "Apple keeps moving the bar."

Connery noted that Google's planned acquisition of Motorola Mobility -- a $12.5 billion deal that it announced earlier this week -- has implications in the Android-versus-iOS tablet tussle.

"Google and Motorola are getting together for some reason, and it's not all about patents," said Connery. "They have tablets in mind as well."

Analysts have generally agreed that Google's purchase was driven by a desire to beef up its patent portfolio as it defends Android from legal challenges by both Apple and Microsoft, although some, including German patent activist Florian Mueller, have argued to the contrary.

But even though the iPad's dominance may not be viable forever, it won't be easy to unseat it.

"HP's decision to not only walk away from webOS, but perhaps all its PC business, shows how tough it is to play in consumer electronics," Connery concluded. "We've seen brand and brand again not have a sustainable consumer business. Everyone wants to be in it, but once there, they realize how slim the margins are. Everyone except Apple, that is."

And that, added Gottheil, is exactly what HP's actions do demonstrate.

"In this age of 'consumerization [of IT]' HP is 'de-consumerizing' its business," said Gottheil.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His e-mail address is gkeizer@computerworld.com.

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Gregg Keizer

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