webOS Q&A Metrix App Mill Forums About Contact Tip Us
News

HP Spends Over $780 Million to Wind Down webOS Hardware Business

By: , 11/21/2011 6:09 pm | 17 comments

HP stated during their earnings call today that they spent nearly $550 million in supplier-related obligations for webOS devices (which certainly explains the second round of TouchPads and even that whole TouchPad Go components news), as well as spending nearly $100 million just to wind down and restructure their webOS hardware division. Some of this can be explained away with the severance pay for those 500 hardware engineers who were laid off in September, but the number still seems awfully high. Finally, there was a $148 million reduction in their revenue as a result of the fire sale, though in their earnings report it is noted as “sales incentive programs.”

It will be fairly tough for HP to come back from losses like these, so we are discouraged from the news of these large figures.

Source: HP Q4/FY2011 Earnings Report

flattr this!


About Arthur Thornton

Arthur is an 18-year-old webOS fanboy and developer. Arthur's first experience with webOS was in August 2009 when he got a Palm Pre. Since then he's owned many of the webOS phones produced, released several loved apps into the App Catalog, and even held an internship with HP's webOS GBU. Fresh off of that internship, Arthur is back at webOSroundup as a contributor.
View all posts by Arthur Thornton →
  • Oheneaku

    Something does not add up or this is the most useless bunch of management the world has ever know.
    If you had given webOS and even 500million to a startup, the outcome would have been far superior. I hope HP never does a tablet or a phone. Useless bunch

  • http://twitter.com/joe_dorn Joe Dorn

    I agree with Oheneaku. WTF was HP doing over the last 18 months since the bought Palm? Let’s hope someone who gives a hoot will take Palm off HP’s hands and resuscitate WebOS.

  • Gr8tfullyblessed

    Hp has done plenty:

    1. Fire your CEO that made you the most profit as a company because of unfounded allegations

    2. Hire an inept guy from the outside without even interviewing him.

    2. Release a sub standard phone that didn’t help with mass market awareness.

    3. Release a decent tablet with overblown prices only to cut its legs from under it after a month

    4. Announce that you will no longer continue to make webos hardware and also home pc’s ( the most profitable part of the company ) and consider turning your company to a cloud service without any prior knowledge of how to run such company.

    5. Fire the CEO that you hired on to turn the company into a cloud based services company and give him a 10 million or so golden parachute.

    6. Renig the decision to stop hardware production and decide not to split the business.

    Yeah id say that HP has done alot within the last 18 months. Whether they’re actually productive, weeeeeeeell ?!

  • Heyguydaq

    it goes to show what bad management can cost. shutting down alone cost more than half of the purchase price. bad management. those numbers don’t tell the story and headlines around the web are spinning it as a failed experiment. that’s BS. with no time in the market, inflated pricing, lackluster marketing, and so much more, webOS never really had a chance. hp either sells it off to the highest bidder, or really put some muscle behind their product. hp can still recoup their investment if they really commit to a defined long term plan for webOS. webOS will only survive as we know it if hp continues development. hp needs webOS to be differentiated and webOS needs hp to survive as a viable competitor in mobile.

  • Fede

    HP is a very good example of how to destroy a company. I the other hand all these news are some sort of preparedness for killing webOS and people who wrote them is par of this theatre. They’ll say they are just informing but they only show the numbers in a relative way, they don’t show the whole view. HP spend a lot of money but in an idiot way and executives should explain such decisions and we must be calm we are not responsible we must demand the continuity of webOS.

  • NoLongerHangingOn

    It’s over people, let it go, I have. On an original pre- user done with we is for the most part

    • NoLongerHangingOn

      Oops webOS, dang autocorrect

  • PalmOn

    But they’re still gonna release the Adobe Flash update for my legacy Pre, right? They said they would.

  • Brother Al

    Oh Palm On! Come, Come my good Sir, ’tis not over! We can still believe & hope for this to come true. It’s not like Flash mobile doesn’t have a very promising future either. I’m sure they have “Top Men” working on it right now, as I type this.

  • JDM

    I hope it all dies.

  • Michael R.

    Pretty amazing stuff. I have to wonder if it’s all really attributed to webOS or not some creative accounting to cover other internal expenditures/failures. In the past we’ve seen companies spin-off or sell divisions in order to bundle and eject certain debts that they don’t want to deal with. So where did all this money really go? The TP, TP Go, Veer, Pre3 all seem link designs that were done prior to HP’s purchase of Palm and while HP spent some money on updated webOS it doesn’t feel like they spent much in R&D, vendor relations, sales force, or dev relations. Maybe the internal bureaucracy inflates costs?

  • http://weboscenter.com webOSCenter

    It’s almost as if they began shutting down webOS about the same time as they were on stage announcing their product lineup. I think it’s pretty clear that Leo started the ball rolling very early — almost as if he was trying to setup webOS for failure.

  • Beatrice
  • Beatrice

    Wii should be thankful and stay true to what we think is a great brand.. There’s a new sheriff in town.. If anyone can, and will bring back the HP Way…it’s Meg
    – sent from webOSroundup XL

  • Newpadowner

    Shouldn’t the great touchpad sales rekindle the idea of bringing webOS back to life?

  • Brother Al

    Hmm, we will let you know in coming months!

  • Brother Al

    Well, the end of November is upon us & still no real signs from HP as to what the hell they are doing… =(