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HP chief bows to Jobsian cult

The tablet Apple effect

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Why is HP killing its webOS tablet and hoping to spin-off its PC business?

Apple.

During HP's quarterly earnings call with reporters and analysts on Thursday afternoon, company CEO Leo Apotheker explained the company's unexpected about-face with an admission that may seem paradoxical on the surface, but ultimately makes perfect sense. "The tablet effect is real and sales of the TouchPad are not meeting our expectations," he said.

And then he said it again: "The tablet effect is real and our TouchPads has not been gaining enough traction in the marketplace."

Apotheker's message is quite clear. And it looks something like this: "I'm getting spanked by a skinny man in a black turtleneck."

Yes, there are other forces at work. Apotheker points to the economy. "There’s a clear secular movement in the consumer PC space. The impact of the economy has impacted consumer sales," he said. "For our PC business to remain the world’s largest personal computing business, it needs the flexibility and agility to make decisions best for its user direction."

But ultimately, he's admitting defeat at the hands of the Jobsian cult. "The tablet effect is real" means that people are buying tablets instead of PCs. But they're not buying HP tablets. "Our webOS devices has not gained enough traction in the marketplace with consumers and we see too long of ramp-up in the market share," he said.

"Due to market dynamics, significant competition, and a rapidly changing environment – and this week’s news only reiterates the speed and nature of this change – continuing to execute our current device approach in this marketplace is no longer in the best interest of HP and HP shareholders."

It's not. All those shareholders are wishing they'd bought Apple. The tablet effect is quite real, and it's affecting desktops and notebook sales at Apple too. It's driving them up.

Calling it the tablet effect doesn't quite do it justice. ®

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