HP’s 2013 Smartphone Plans: Start Thinking About One

With its core printer and PC businesses in decline, Hewlett-Packard must once again look to the mobile device market that it fled a little over a year ago when it scuttled its webOS hardware operations. CEO Meg Whitman said as much last month, telling Fox News, “We have to ultimately offer a smartphone, because in many countries of the world that is your first computing device.” But as important as a smartphone might be to HP’s future, the company isn’t rushing one to market. In fact, it has no plans to introduce a handset this year or next.

“We don’t have any plans to introduce a smartphone in 2013,” Whitman said during HP’s analyst day on Wednesday. “But we’ve got to begin thinking about our play here. How do we capture this segment of the personal computing market? … I believe that, five years from now, if we don’t have a smartphone — or whatever the next generation of that device is — we’ll be locked out of a huge segment of the population in many countries.”

Tough to disagree with that assessment, given the soaring smartphone market and the dawning of the “post-PC” era.

But it’s also hard not to wince at the idea of HP taking another run at the smartphone and tablet market after a failed first attempt that ended in embarrassment and more than $3.3 billion in goodwill- and inventory write-offs. As Jefferies analyst Peter Misek said, following Whitman’s first smartphone comments, “While [it] makes sense strategically, we see it as a high risk move. On top of adding costs and working capital burdens to an already stressed balance sheet, there could be additional write-offs. We note that to date almost all PC OEMs have failed to gain significant traction in consumer tablets/smartphones.”