Don't let it get away!
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Christmas comes early for cell-phone shoppers this year. According to a Wall Street Journal report out Friday, PC king Hewlett-Packard (NYSE: HPQ ) is about to unveil a new "iPaq" smartphone for your gabbing pleasure. I've got just one question.
The world is, after all, awash in smartphones. In addition to every second firm in Korea, we've got:
- Research In Motion (Nasdaq: RIMM ) and its ubiquitous BlackBerry.
- Apple (Nasdaq: AAPL ) with the cooler-than-thou iPhone.
- Smartphone leader Nokia (NYSE: NOK ) with a whole array of phones that are popular worldwide, which we've heard of, but rarely seen, here in the States.
- Google (Nasdaq: GOOG ) , apparently.
- And a million other shops, mostly unmentioned and largely unnoticed (yeah, I'm talking to you, Motorola).
According to the Journal, HP's aim is to grow its mobile-device business outside the corporate realm, and try to hook more retail consumers. Jumping on the touchscreen bandwagon, the iPaq will boast a touchscreen pad, and run on Microsoft (Nasdaq: MSFT ) Windows Mobile 6.1.
But here's the thing. According to market researcher IDC, HP already sells cells. (Really? How did I not know that?) Apparently, HP has all of a 3.3% global market share in smartphones, and yet I've not heard hide nor hair of their existence. So maybe the announcement is good news -- clearly, HP needs to do something to alert cell-phone users to its existence.
But maybe not
On the other hand -- not to put too fine a point on this, but doesn't HP have its hands full already? I mean, sure, HP has thrashed Dell (Nasdaq: DELL ) in the PC wars. But it's also just taken on a world of trouble by buying out EDS. Now, I've written in the past that I like that acquisition. But it's inarguable that EDS earns inferior profits relative to HP, and the latter has a yeoman's task ahead of it, trying to bring the former's margins up to par.
In short, HP's got plenty of irons in the fire already, and plenty of work ahead of it. Sinking millions -- perhaps tens, hundreds, or thousands of millions -- of dollars into developing and marketing another "me-too" smartphone, that will no sooner launch than enter a bitter price war against every other cell-phone maker in the world, just doesn't make sense.