With HP Out of the Running, Can Anyone Compete with Android and iPhone?

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HP announced this afternoon that it is going to stop making tablets and smartphones running the webOS. HP must have seen the writing on the wall: the Android OS and iPhone have too strong a grip on the mobile market for HP to get a foothold. This isn’t because they are better operating systems, but because too few people really gave the webOS a chance.

From the Editors DeskI really like the webOS. When I put it up against Google’s Android OS and Apple’s iOS, I actually prefer the webOS. Its “cards” system for switching between apps that have to share a small screen is quick and easy — two words I wouldn’t use to describe the same feature on either the iOS or Android.

This is true for both smartphones and tablets. I’ve used the webOS on both, and was pleased with it on a small screen or a large. But that’s all water under the bridge now, and all because not enough people were willing to root for the underdog.

There Can Be Only Two
HP bowing out of the smartphone business, leaving it to Apple and Google and few other struggling contenders, is an example of a business principle I’ve seen over and over: most consumers are only interested in two competitors in any market… no one else really stands a chance.

There are dozens of examples of this. Coke and Pepsi dominate the soft drink industry, and rivals like Sprite and Dr. Pepper are also-rans. In the PC market there is Windows and Mac, with Linux a distant third. There’s McDonald’s and Burger King, Republicans and Democrats, baseball and football, I could go on and on.

HP Veer 4G for AT&TSo it doesn’t matter that HP has a great product in the webOS, when people go to the store to buy a smartphone the vast majority of them are looking for an iPhone or a Droid. The same is true if they are shopping for a tablet, it’s an iPad, or something running Android. Only a tiny percentage of people were willing to consider a third option.

Why? People want a safe choice, and picking one of the most popular options is safe. If millions of people like something, it’s probably not going to go horribly wrong. But remember, the safest choice isn’t always the best choice.

The Software Factor
Another factor that HP executives almost certainly had in mind when it made this decision was the paucity of webOS apps. Despite HP’s best efforts to woo software developers, there are dozens if not hundreds of Android and iOS apps for every one for the webOS.

And this was really the Achilles Heel of HP’s operating system. Consumers today demand a wide selection of games, utilities, and whatnot for their smartphone or tablet. If there aren’t enough developers supporting a device, shoppers are going elsewhere.

Just keep in mind, though, this is really the “There Can Be Only Two” principle in another guise. Third-party developers are lot like consumers in that a large majority of them are only interested in developing for the two top competitors. They think the odds of making money are smaller if they release an app for one of the others.

Carriers Played a Part, Too
I give the wireless carriers credit, they gave the webOS a chance. The first device running this operating system was picked up by the three largest carriers: Verizon, AT&T, and Sprint.

AnalysisBut where consumers go, the wireless carriers follow. That’s only natural. So when sales of smartphones like the Pre series and the HP TouchPad were anemic at best, most of the attention of the carriers went to Android and iPhone. I imagine HP was finding few takers for the HP Pre 3, or the version of TouchPad with built-in 4G, both of which were supposed to come out soon.

Microsoft and BlackBerry, Take Heed
Today’s announcement has to have both pleased and frightened Microsoft and RIM, two other companies that are trying to compete with Apple and Google. They are probably pleased because they can be fairly sure that the webOS is going to fade away, despite some low-key comments from HP about licensing this operating system to other companies.

But HP pulling out of the smartphone market has to have sent chills down their spines. HP is one of the biggest computer makers in the world, with very deep pockets. If it has decided that it can’t compete in the mobile market, it raises serious questions if RIM’s BlackBerry OS and Microsoft’s Windows Phone can do any better.

These companies can create good operating systems, even great ones, and still fail. HP proves it.

Ed Hardy has been Site Editor for Brighthand since 2002, and has been covering the mobile industry for over ten years, starting out with PDAs and transitioning to smartphones over the years. He lives in Atlanta with his family and an undetermined number of cats.

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