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HP details wasted webOS money: $1.66 billion in expenses after the acquisition

Posted: , by Victor H.

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HP details wasted webOS money: $1.66 billion in expenses after the acquisition
HP acquired Palm over a year ago for $1.2 billion but its expenses didn’t end on that - the company has released financial results which show that it has spent even more, a whopping $1.66 billion on winding down the webOS division. 

The costly process includes $885 million from the “impairment of goodwill and purchased intangible assets,” and an additional $775 million from one-time charges around the wind-down. Those two add up to make the staggering $1.66 billion number, not a very heartwarming figure for HP investors.

“First, we took a total charge to operating income of $788 million. This was associated with the wind down of our webOS device business. This charge included a net revenue reduction of $142 million related to the sales incentive program, $548 million in costs of sales due to supplier-related obligations and inventory reserves, and $98 million in operating expenses and restructuring charges. Second, as a result of our decision to wind down webOS devices, we have taken an impairment expense of $885 million against the carrying value of goodwill and purchase intangible assets related to the acquisition of Palm,” HP gave all the details.

It’s saddening to see the huge pile of cash that has been invested in what’s now abandonware, or on the way to become abandonware. WebOS is a glaring example but it’s not the only one - MeeGo was officially proclaimed dead after billions of expenses and Symbian while supported until 2016 is headed that way too. Windows Mobile could also be put in that category.

Now, if only HP knew what it’d do with webOS, but something tells it’d be hard to convince those investors that pouring more money into the platform is a good idea...

source: HP via AllThingsD

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posted on 22 Nov 2011, 05:22 1

1. snowgator (Posts: 3604; Member since: 19 Jan 2011)

More than any other OS, I am smitten with WeBOS. Yes, my Palm Pre Plus is a glowing exmple of how not to build hardware: unresponsive screen, lag, freezes, out right poor camera, and a slider that wobbles AND is hard to move. I do not even know HOW you could engineer a slider that does both.

But WeBOS is just plan fun to use. It is a simple concept that was executed with style. It was designed for multitasking. It's sensor driven responses was also an ingenius idea. Everyone I showed it too thought it was a great OS. When HP, a known top notch hardware builder, bought out Palm I thought it was a true win/win. A natural. A company that was in it for the long haul.

I will just say what I always say when I vent about the death of WeBOS. What a complete waste.

posted on 22 Nov 2011, 05:57 1

3. ayephoner (Posts: 850; Member since: 09 Jun 2009)

have you rooted it?

i had a ppp about a year ago, rooted it and overclocked it and it was absolutely amazing. it had a pretty good build too, i thought. i sold it to a freind and since it has developed issues. upon buying that phone, i really thought my next device would be webOS, no question. so sad thats not true.

you know ICS is borrowing a bunch of ideas from webOS? im really excited to see it in action.

posted on 22 Nov 2011, 05:41

2. GYNGA (Posts: 19; Member since: 08 Dec 2010)

As I know Sony is planning to buy webOS, don't they?

posted on 22 Nov 2011, 06:15

4. putes (Posts: 38; Member since: 03 Nov 2011)

I've say it before, kill webOS before it hurls earth into a black hole and destroys us all.

posted on 22 Nov 2011, 06:55 1

5. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

And you wonder why most companies don't want to compete in the tablet space. The initial write down of HP TouchPad was $100 million. But considering the $690 ($142 + $548) million charge and pro-rata that charge over the actual devices produced, the touchpad debacle is easily $400 to $500 millions. HP had to produce a second run of tablet to smooth relations with its suppliers -- it was the right thing to do, but damn it was costly.

I don't think companies like HTC, Samsung or Motorola (before the Google merger) could survive such a hit. $788 million in total charges divided by $500 equals to 1,576,000 iPad2 16 GB Wifi. Said differently, HP could have bought and then donated 1,5760,000 iPad2 at MSRP rather than take that huge hit.

posted on 22 Nov 2011, 16:55 2

6. ZEUS.the.thunder.god (unregistered)

"if only HP knew what it’d do with webOS", stupid HP.

posted on 22 Nov 2011, 21:17

7. gtrxman (Posts: 129; Member since: 10 Sep 2011)

Phone Arena, please leave the financial commentary to business publications. The write down of goodwill is not an additional expense but a write off of part of the purchase price. That amount is NOT in addition to the purchase price.

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