Hewlett-Packard Co. (NYSE: HPQ) has struggled for years now as consumers have shifted preferences from traditional desktop PCs and laptops to tablets and smartphones. And that trend seems to be accelerating. Unfortunately, HP does not have a tablet that sells well.
HP paid $1 billion for Palm in 2010 as part of its foray into tablet computers and smartphones, which ran on Palm’s operating system. That effort did not end well. HP’s tablets now run on Google Inc.’s (NASDAQ: GOOG) Android operating system, and HP has yet to reenter the smartphone market. That may be just as well, as it would seem foolhardy to try to take on well-established market leaders Apple Inc. (NASDAQ: AAPL) and Samsung now.
As part of its effort to put past mistakes behind it, HP sold Palm’s mobile operating system, webOS, to LG Electronics last year. Then on Thursday, the company announced that it had sold 1,400 U.S. Palm patents and about 1,000 more foreign patients to Qualcomm Inc. (NASDAQ: QCOM) for an undisclosed sum.
Palm was not the only major acquisition that haunted HP. In November of 2012, HP took an $8.8 billion write-down on its acquisition of Autonomy, claiming it was the victim of a multibillion-dollar fraud at the hands of the British company. Going back further, there was the troubled acquisition of EDS.
CEO Meg Whitman had taken up the reins at HP when the Automony deal closed, but just. And it is Whitman who is now charged with turning the company around, a task that has not proved easy. The company recently announced that it will lay off 34,000 workers. While Whitman has tried to refocus HP on growth of product and service sales to businesses and government enterprises, revenue at its Enterprise Systems group dropped 8.2% last year. Whitman blamed much of the decline on poor economic conditions. But it may be as much the crush of competitors, such as more successful companies like Oracle Corp. (NYSE: ORCL) and International Business Machines Corp. (NYSE: IBM), as it is the economy.