HP Has To Offer A Smartphone And Get It Right This Time, Says CEO

By Alexandra Burlacu | Sep 16, 2012 10:58 AM EDT

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As smartphones are becoming a key computing device worldwide, HP needs to get on board and be present in that market, said CEO and president Meg Whitman. "We are working on this," Whitman told Fox Business News in an interview.

"My view is we ultimately have to offer a smartphone because in many countries of the world, that is your first computing device," said the CEO. "There will be countries around the world where people may never own a tablet or a PC or a desktop, they will do everything on a smartphone, we are a computing company we have to take advantage of that form-factor."

Whitman did not mention when an HP-branded smartphone would actually hit the market, or whether HP would develop a smartphone in-house or get it done through an acquisition. She did stress, however, that it is important to make sure HP gets it done right this time.

"In the end, I would love to be able to provide all the way from the most fabulous workstations to desktops, to laptops, to our tablets and convertibles, all the way to the smartphone," said Whitman. "But we did take a detour into smartphones, and we've got to get it right this time... So we're working to make sure that, when we do this, it will be the right thing for HP and we will be successful."

HP offered a number of mobile devices running Microsoft's Windows mobile operating system several years ago. Also, in 2010 HP bought mobile device maker Palm for $1.2 billion, under Mark Hurd's leadership. While Palm had smartphones as well, its key asset was the webOS operating system. Over the following months, at first under Hurd and later under Leo Apotheker, HP worked to make up a broad portfolio of webOS-based devices, from PCs to tablets and smartphones.

HP launched the webOS-based TouchPad tablet in 2011, under Apotheker's watch, but the device faced poor sales in the U.S., prompting HP to ditch the TouchPad and start planning webOS smartphones. In an ironic twist, HP's move to apply drastic price cuts to the remaining TouchPads to clear inventory drove consumer interest, briefly turning the TouchPad into one of the fastest-selling tablets on the market.

Late last year Whitman took over as Apotheker's successor at the helm of the company, and at one point considered selling webOS. Instead, she ultimately decided to turn the operating system into an open-source project. Whitman suggested at the time that HP may release another webOS-based tablet, but said the company would likely not get involved in the smartphone business again.

PC sales worldwide have slumped, however, and the shift toward smartphones and tablets has significantly affected PC makers, notably HP and Dell. Both companies are now looking to reinvent themselves, and for HP that includes building a presence in the mobile space.

Back in July, Gartner analysts forecast that consumers will spend as much as $2.1 trillion in 2012 on tech products and services, including smartphones and tablets, and that number will surge to $2.7 trillion by the end of 2016.