No HP smartphone next year, says CEO Meg Whitman

But HP will need one within five years to avoid missing out on a big segment of the market, its CEO said

Hewlett-Packard has no plans to launch a smartphone next year but will need to sell one eventually to avoid missing out on "a huge segment of the population," CEO Meg Whitman said Wednesday, clarifying remarks she made last month.

Whitman told the Fox Business Network in September that HP would need to offer a smartphone because phones have become the primary computing device for people in many countries. "We are working on this," she said at the time.

Asked about the smartphone plans at HP's financial analyst day Wednesday, Whitman acknowledged she had made "quite a stir" with her earlier remarks.

"We don't have any plans to introduce a smartphone in 2013, but we've got to start thinking about what is our unique play, how do we capture this element of the personal computing market?" Whitman said.

HP has to offer every kind of device, from workstations through all-in-one PCs, laptops, hybrid PCs, tablets "and, ultimately, smartphones," she said.

"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 of the world," she said.

HP launched some smartphones and tablets last year based on its webOS but, under former CEO Leo Apotheker, stopped developing those devices.

Also on Wednesday, Whitman seemed to cede the market for consumer tablets to Apple but said company CIOs would rather have a device based on Windows.

"The consumer market, I would argue, is quite well-served by the tablet in the marketplace today from Apple," she said.

"But every CIO I talk to wants to have a Windows device, backward compatibility, the ability to control those devices from a security perspective."

Earlier in the day, Todd Bradley, who runs HP's Printing and Personal Systems Group, said HP expects tablet sales to businesses to grow at three times the rate of sales to consumers.

HP used the analyst day to expand on a restructuring plan announced in May to help turn around its finances. As part of the effort it will reduce the number of products it sells, including eliminating a quarter of its PC platforms and 30 percent of its printer models over the next two years.

It also offered a weak financial outlook for its next fiscal year, saying it expects earnings per share of US$3.40 to $3.60. That was well below the consensus estimate of $4.18 from analysts polled by Thomson Reuters.

HP's shares plummeted on the news, falling almost 13 percent to $14.91 at the close of Wednesday trading.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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James Niccolai

IDG News Service
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