HP is Going to Bet the Farm on Second Smartphone/Tablet Push

From DailyTech: Jeffries analyst Peter Misek made some surprising claims in a recent research note. He writes, "[W]e believe HP will aggressively attack the smartphone and tablet markets, which we believe are risky investments."

He writes: "After failing with its acquisition of Palm and subsequent goodwill and inventory write-offs totaling $3.3B, recent comments from HP management point to a retargeting of tablets and smartphones. While the move makes sense strategically, we see it as a high risk move. On top of adding costs and working capital burdens to an already stressed balance sheet, there could be additional write-offs. We note that to date almost all PC OEMs have failed to gain significant traction in consumer tablets/smartphones."

Of course Mr. Misek has made some controversial predictions that he's been flat-out wrong about in the past -- such as his claim that phonemaker Research in Motion, Ltd. (TSE:RIM) would post a big fiscal Q2 2013 fiscal miss (instead RIM handsomely beat analyst outlook, post a smaller than expected loss).

There is some supporting evidence, though, for this claim. New Hewlett-Packard Comp. (HPQ) CEO Meg Whitman told Fox Business Network, "We have to ultimately offer a smartphone because in many countries of the world that would be your first computing device. We are a computing company."

The HP chief rejected rumors of a RIM purchase, commenting, "No, that is not a direction that we're going to head."

However, HP's flippant treatment of webOS raised eyebrows, and thus is pertinent to the risk assessment. If there is one thing Mr. Misek is for sure right about it's that an HP smartphone and tablet push is high risk. After all it tried once and quickly pulled the plug.

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