It's Official: HP Hooks Up With Android

Just weeks after reports that Hewlett-Packard (NYSE: HPQ  ) was preparing to hook up with Google (NASDAQ: GOOGL  ) Android, the PC giant has done just that.

Just before Mobile World Congress officially kicked off in Barcelona, HP announced that it was jumping back into the consumer tablet fray with a new Android device, the Slate 7. As far as strategic positioning goes, the Slate 7 is like a mix of Amazon.com's (NASDAQ: AMZN  ) first-generation Kindle Fire and Google's own Nexus 7.

Can the Slate 7 give HP a bigger foot in the tablet door?

What would happen if a Kindle Fire and Nexus 7 hooked up?
From a hardware standpoint, the Slate 7 bears an uncanny resemblance to the first Kindle Fire, which was launched back in 2011. The display is the same size and resolution as the e-tailer's device, and also carries a similar price point. The processor powering the Slate 7 is an ARM dual-core Cortex-A9 processor, but HP is not specifying exactly who is making this chip.

Slate 7. Source: HP.

The software front is where the Slate 7 resembles the Nexus 7, since HP has decided to ship its tablet with a mostly stock version of Android 4.1 Jelly Bean. I say "mostly" because HP is adding a couple of customizations, but the additions are nowhere near the level of software modifications that other OEMs are obsessed with adding.

HP is embedding Beats Audio in the device for improved audio capabilities, but also integrating an HP ePrint app to gently encourage consumers to keep on printing (and buying expensive printer ink). Incredibly, printing is still 21% of the business, with that segment generating $5.9 billion in revenue last quarter. Other than these two additions, the Slate 7 is mostly a stock Android affair.

Here's how the Slate 7 stacks up against its two adopted parents.

Specification

Slate 7

Nexus 7

Kindle Fire (first-generation)

Display resolution

1,024 x 600

1,280 x 800

1,024 x 600

Storage

8 GB

16 GB / 32 GB

8 GB

Cellular option?

No

Yes, $50 extra

No

Price

$169

$199

$159

Sources: HP, Google, and Amazon.

The device is about as entry-level as it gets, and it commands a commensurate price point. The Slate 7 has no illusions of competing with high-end devices in this market segment like Apple's iPad Mini.

Take two
While HP is primarily tapping Microsoft (NASDAQ: MSFT  ) Windows 8 for its enterprise tablets, the company is choosing Android for its consumer attempts. This comes just months after HP's PC chief Todd Bradley said that the company would indeed be entering the consumer segment in 2013.

The new tablet also comes after HP launched its first Chromebook earlier this month, and the Slate 7 shows that HP is getting cozier with other software platform providers like Google in an attempt to hedge its bets should tensions with Microsoft continue to grow as the software giant becomes a competitor with its Surface tablet.

As an entry-level device, HP opted to save on development costs by shipping a primarily stock Android device. By choosing not to add a layer of software modification for the sake of differentiation, the Slate 7 is also destined to be a relatively commoditized device.

At that price point, HP is looking at incredibly thin margins to begin with on this tablet. The company clearly hopes to skim a little bit more if it can gently nudge people to print more, but HP is also trying to sell two-year extended warranties for up to $49 -- or nearly 30% of the initial purchase price.

HP's mobile chief, Alberto Torres, said that the company plans on offering a range of tablet form factors leveraging an "array" of operating systems, so the Slate 7 is likely just a preview of more to come. After the company's first failed foray into consumer tablet turf, can it find success with a low-end, commoditized offering? Probably not.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2013, at 2:36 AM, marv08 wrote:

    MS finances Dell. What did you expect?

    MS has, with Windows 8, own hardware, the unholy and definitely unsuccessful mingling with Nokia and Dell, destroyed the own kingdom.

    "Humpty Dumpty sat on a wall,

    Humpty Dumpty had a great fall,

    All the King's horses and all the King's men,

    Couldn't put Humpty together again."

    Humpty "Ballmer" Dumpty faces his destiny. Good riddance.

  • Report this Comment On February 26, 2013, at 7:00 AM, RandomMeaning wrote:

    Doesn't it seem like a bunch of companies are trying to change into each other's clothes lately?

    Microsoft wants to get into hardware and retail (like Apple). Dell wants to get out of hardware into software as a service (like IBM). HP tried to get out of hardware and get into software as a service (like IBM) but couldn't make sense out of how to pull it off so instead they're experimenting with Android (which would have never happened even a few years ago out of fear of offending Microsoft).

    It's like some giant race to kill their own profits. Microsoft, not satisfied with raking in high profits from software, decides enter into the far riskier and lower margin hardware business. With the added expense of retail. Even though everything they sell is already readily available all over the world. Granted, this has worked very well for Apple but it's not that easy replicate, particularly after over a decade of training Microsoft fans to expect low cost hardware.

    Dell is currently running away, trying to preserve its founder's legacy by going private before the whole thing implodes.

    Then HP seems to have jumped right down to the bottom of minimal margins with their Android tablet. In a way, I can't blame them. Surface RT is a dead end for a consumer tablet. Microsoft will conveniently forget they ever made it while it languishes with little to no updates while they pour most of their efforts into the Surface Pro. Which is way too expensive and cumbersome to appeal beyond the Office On Every Possible Device Even Though He's Already Running it On a Laptop and a Desktop crowd (I'll come up with something more catchy in the future). So, that leaves HP not much choice but to join the huge ranks of Android manufacturers.

    Which is kind of a problem in and of itself. What is HP brining to the table to make them rise above the noise? Nothing so far beyond a surprisingly low price. It's like selling vanilla ice cream claiming to be as vanilla as possible at a cheaper price.

    If only HP had bought an OS years ago that they could have worked on developing . . .

    Well, WebOS would have taken serious effort to make it a worthy competitor and could have still flopped anyway. Guess we'll never know how that could have worked out.

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