A Simple Explanation for Why HP Abandoned Palm and Is Getting Out of the PC Business

HP acquired Palm at the end of April 2010, for $1.2 billion. HP’s CEO was Mark Hurd.

Three months later, in early August, Mark Hurd was forced to resign over that scandal with forged expenses and lies about his lady friend.

HP then named Léo Apotheker president and CEO on 30 September 2010.

The thing is, Apotheker’s relevant experience was serving as CEO of SAP. What’s SAP? SAP is an enterprise software and consulting company. Honestly, we all should have seen this coming. You don’t bring in an enterprise consulting guy to turn around a PC and device maker. You bring in an enterprise consulting guy to turn a PC and device maker into an enterprise consulting company.

Palm wasn’t Apotheker’s acquisition. It was Hurd’s. And the PC business wasn’t why Apotheker took the job. Apotheker’s acquisition was announced this week, coincident with the news that HP wants out of the PC and device business: Autonomy — a company I’d never heard of before but which more or less sounds like a rival to SAP.

I suppose Apotheker gave the Palm/WebOS guys a chance, and let them get the TouchPad on the market. But apparently their chance was a one-strike-and-you’re-out opportunity to gain traction in the market immediately. But the TouchPad didn’t get any traction immediately, so, boom, that’s it, Apotheker is done with them. Apotheker simply never had any interest in the consumer market or product development. My guess is that he planned on getting HP out of the hardware business all along, and Palm, at best, was an afterthought. If he’d been named HP’s CEO six months earlier, they never would have acquired Palm in the first place.