updated 03:45 pm EDT, Thu August 18, 2011
Confirms possibility of spinning off PC group
The TouchPad tablet and other webOS-based devices will be discontinued, HP has unexpectedly announced. The company has also confirmed earlier rumors, noting that is indeed negotiating to buy software maker Autonomy, and may also spin off the Personal Systems Group. The PSG controls HP's signature PC business.
The TouchPad in particular has been floundering, having possibility sold a few as 25,000 out of 270,000 units delivered to Best Buy. Last week HP dropped its price by $100, even as a new model, the TouchPad Go, appeared at the FCC. The webOS-based Pre 3 smartphone, meanwhile, has yet to launch outside of Europe. HP paid approximately $1.8 billion to buy webOS' creator, Palm, in 2009.
The Personal Systems Group generates about $41 billion for HP annually. The company is believed to be following in IBM's footsteps, however, and wanting to concentrate more on services. Despite high revenue, HP earns comparatively little profit from PCs.