Hewlett-Packard has to Decide Whether to Cut These Losses
Hewlett-Packard Co (NYSE:HPQ) might be in the market to sell Palm’s webOS mobile software platform for millions of dollars, which would be far less than the $1.2 billion they paid to acquire it last year. When HP bought Palm in 2010, the future for the unit was uncertain after they ditched its webOS-based TouchPad Tablet due to poor sales.
Numerous technology companies are interested in purchasing the division. Amazon.com Inc (NASDAQ:AMZN), Research In Motion (NASDAQ:RIMM), IBM (NYSE:IBM), Oracle Corp (NASDAQ:ORCL) and Intel Corp (NASDAQ:INTC) are believed to be the most likely suitors.
HP (NYSE:HPQ) is still trying to work out how to recover from their missteps. An HP spokesperson said, “we are exploring ways to optimize the webOS software” and HP’s new chief executive Meg Whitman said they are still contemplating building a new webOS-based tablet. “The question now before us is what do we do with webOS software and do we come back to market with webOS devices,” Whitman said. “It obviously will not be the same device but it will be version 2.0.”
After the dismissal of CEO Leo Apotheker, HP (NYSE:HPQ) killed its plan to spin off its personal computers unit. Apotheker’s idea would have cost billions in lost business. Apotheker planned to incorporate webOS into most of HP’s (NYSE:HPQ) products — the TouchPad was to be the first. However, due to poor demand for the TouchPad, the tablet was discontinued a month after being released for sale.
Sources say that since the webOS has not received major investment in more than a year, any auction would not obtain a high price. “This won’t be the most robust auction in the world,” the source said.
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