Is HP Going To Court?

HP and its top executives have been accused of misleading investors before a slump in its stock price.

HP is facing a class action lawsuit filed by Robbins Geller Rudman and Down alleging that CEO Leo Apotheker and CFO Cathie Lesjak misled investors before making announcements that included the possible spin-off of its PC business, dumping WebOS devices and the purchase of British software outfit Autonomy.

Those announcements, all made in one afternoon, led to a 20 per cent drop in HP’s share price the following day. That, according to Reuters, was the largest one day decline in HP’s share price since 1987.

The lawsuit against HP does not specify damages but it serves to highlight the growing concern at the way Apotheker is leading HP. The firm’s announcement that it was considering leaving the PC business was a shock to many, but its decision to dump its WebOS devices was perhaps the biggest shock of the lot.

While HP’s PC business was always seen as a low margin operation, WebOS was viewed as a core part of HP’s future strategy. The firm kept banging on about slipping WebOS into as many devices as possible, however all that talk evaporated, just like HP’s Touchpads when it sold them off at fire sale prices for a massive loss.

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RIM’s Woes Continue

PlayBook shipments dropped in half for Research In Motion during its second quarter, which also saw revenue continue its steep decline.

RIM shipped just 200,000 PlayBooks in the second quarter, down from 500,000 last quarter, when it started offering the tablet device.

Revenue was US$4.2 billion, hitting the low end of the company’s expectation and down 10 percent from the same quarter last year. Analysts polled by Thomson Financial expected $4.47 billion.

RIM’s net income was $329 million, or $0.63 per share. Adjusted net income was $419 million, or $0.80 per share. Analysts were expecting better: Those polled by Thomson predicted $0.87 per share.

RIM shipped 10.6 million smartphones during the second quarter. In June, RIM warned that the second quarter might be weak because of delays in shipping new phones. The delays meant RIM would miss the back-to-school sales period, negatively impacting sales, it said at the time.

Executives who spoke during a conference call to discuss the results put a positive spin on phone sales, however. The company only began launching phones running the new BlackBerry 7 software within the past few weeks, and so far it’s the “largest and most successful launch in our history,” Mike Lazaridis, co-CEO of RIM, said during the call.

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Google Buys Patents From IBM

Google has purchased more than 1,000 patents from IBM, as part of its strategy to strengthen its patent portfolio to counter litigation, according to records of the United States Patent and Trademark Office.

Jim Prosser, a Google spokesman, confirmed the transfer, reported by a blog SEO by the Sea, but did not provide details such as the the purchase price Google paid for the patents.

Google also acquired another over 1,000 patents from IBM in July. It transferred recently some patents to smartphone maker HTC to help it pursue patent litigation against Apple.

Google has been interested in buying patents for some time now, which led to its failed bid in June for the patents of Nortel Networks, and its proposed acquisition of Motorola Mobility for about US$12.5 billion.

The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation, Kent Walker, Google’s senior vice president and general counsel, said in a blog post in April.

“But as things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services,” he added.

The acquisition of Motorola Mobility’s patents was a key consideration for Google to start talking to the company in early July. But Motorola told Google that it could be a problem for Motorola Mobility to continue as a stand-alone entity if it sold a large portion of its patent portfolio, according to a filing by Motorola to the U.S. Securities and Exchange Commission on Tuesday.

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Should HP Reconsider The TouchPad?

Hewlett-Packard Co (HP) should re-think its decision to dump its TouchPad tablet since the device could double the value of the PC division HP plans to spin off, technology research firm Canalys said in a statement to clients.

HP stunned markets in August by saying it may shed its PC business — the world’s largest after the $25 billion acquisition of Compaq in 2002 — while at the same time killing webOS-based phones and the TouchPad tablet which was launched only six weeks earlier.

HP slashed the price of its tablet to $99 the weekend after announcing the TouchPad’s demise, igniting an online frenzy and prompting long lines to form at retailers as bargain-hunters chased down a gadget that had thus far failed to excite consumers.

“The TouchPad was overpriced at launch and did not sell. This led HP to draw a premature conclusion that the product category had failed,” Canalys analysts said in a research note.

Canalys said the price cut had helped make TouchPad the hottest brand in HP’s entire portfolio, gathering more interest than anything from HP in more than 10 years.

“The TouchPad has become the ‘must-have’ technology product of 2011. Perhaps no other technology vendor, apart from Apple, has ever created such hype for a technology product,” the research note said.

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Intel Previews Android Tablet On Atom Chip

For the first time on Tuesday, Intel unveiled working prototypes of tablets computers with Google’s Android OS and the chip maker’s upcoming Atom low-power chip, code-named Medfield.

The tablet was about 8.9 millimeters (0.3 inches) thick and had a 10.1-inch screen, and was on display during a briefing at the Intel Developer Forum being held in San Francisco. The tablets ran on Android 3.0, code-named Honeycomb, and alpha software developed jointly by Google and Intel.

Earlier on Tuesday, Intel and Google announced they would ally on developing future releases of Android for smartphones and tablets. Intel CEO Paul Otellini showed off a Medfield smartphone running on Android 2.3, code-named Gingerbread.

The Medfield tablet is a reference design for device makers who want to launch tablets, said Steve Smith, vice president at Intel. Smith didn’t say when Medfield tablets would be released, but said Intel is currently optimizing the chips for tablets to balance power and performance.

Intel is banking on Medfield tablets to prove it is improving on power consumption with its tablet and smartphone chips.

Intel already offers tablet chips code-named Oak Trail and Moorestown, which haven’t been successful. Only a few companies such as Cisco and Fujitsu have adopted the chips for business tablets.

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Shareholder Group Demands RIM Shake-up

An activist shareholder in Research In Motion said on Tuesday it wants the struggling BlackBerry maker to seriously ponder selling itself or spinning off its patent portfolio, sending RIM’s share price higher.

Jaguar Financial Corp said it wants the Canadian company’s board to take control from co-Chief Executives Mike Lazaridis and Jim Balsillie and for up to five of RIM’s independent board members to explore options to maximize shareholder value.

RIM shares were up 1.3 percent at midday Tuesday at $30.52 on the Nasdaq and gained 2.3 percent to C$30.26 on the Toronto Stock Exchange. Both markets were down sharply
overall. RIM shares have lost almost half their value since the start of the year.

“Our call is for (RIM’s board) to take action; no more study, take action. Take action now, before it’s too late,” Jaguar Chief Executive Vic Alboini said in an interview.

Alboini said Jaguar has talked to a select group of shareholders and received broadly positive feedback for its plan.

“We haven’t found one who wasn’t supportive,” he said. “We haven’t found any opposition.”

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Dell & Baidu To Create Mobile Devices

Dell Inc and China’s top search engine Baidu Inc plan to join forces and develop tablet computers and mobile phones, targeting the Chinese market dominated by Apple Inc and Lenovo.

China is one of the fastest growing markets for tablets and is home to more than 900 million cell phone subscribers, but analysts were skeptical that the partnership would knock Apple from its dominant perch in the market.

“I suspect this is just Dell, who has a lot of problems on the mobile and tablet front, grasping at straws to get any kind of publicity that it can to make its product more attractive,” said Michael Clendenin, managing director of technology consultancy RedTech Advisors.

“Ultimately in China, I still think it is Apple’s game, still for the iPad and iPhone.”

Dell declined to give a timeline for the launch of the devices, but local media reported on Tuesday, quoting sources, that it may be as early as November.

Baidu launched a new mobile application platform last week and offered a glimpse of its upcoming mobile operating system, which it hopes will serve a growing number of users accessing the Internet from smartphones and tablet computers.

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Analysts Expect Flood of Cheap Tablets This Fall

Analysts are predicting that a whole slew of $200 to $300 tablet computers will hit the market this fall, prompting the essential question: Which device will come out on top?

Several analysts are betting on Amazon.com to be at the top of the pile with an expected $299 Android-based tablet introduced sometime in October. The reason it will do
well is only partly because of the low price, which is below the market-leading iPad 2, starting at $499.

But analysts also expect Amazon to offer content for its 9-in. tablet thats comparable to or even exceeds the content that Apple can offer for the iPad. Amazon will make money on the content it sells, which is expected to more than make up for any loss it incurs in selling the tablet at a price below the cost of making it.

“Amazon has an ecosystem like Apple, with its own app store that offers music, movies and videos, and a bookstore,” said Bob O’Donnell, an analyst at IDC. “Not only would you get a cheaper device [than the iPad], you would get the integrated Amazon experience. That’s what makes Amazon’s tablet the most interesting and where other [Android] tablets will be challenged.”

In effect, Amazon’s approach will be to entice buyers with a much lower price, “but have all the services of Apple,” O’Donnell said.

Other Android tablets with which Amazon would likely compete include a $199 Lenovo IdeaPad A1 tablet announced Thursday, the cheapest 7-in. Android tablet from a top device maker. Another contender is the original Samsung Galaxy Tab, which is being sold on Amazon for $279.99, after having first appeared late in 2010 for $600.

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Lofty Wishes: AT&T To Offer $700 HTC 4G Tablet

AT&T on Wednesday announced the new HTC Jetstream, its first LTE-ready tablet, will become available on Sept. 4 for $700 and a two-year contract.

Jetstream’s price may be too steep for many customers, even with a fast LTE plus HSPA+ connection, given expected lower prices for tablets on the horizon. Amazon is expected to unveil a 9-in. tablet soon priced at $299, while Hewlett-Packard has begun a $99 fire sale for its soon-to-be-defunct TouchPad.

The 10.1-in. Jetstream runs Android 3.1 with an expandable storage capacity of 32 GB, but at nearly $700, it would be $100 more than the 32 GB Apple iPad 2 with its 9.7-in. screen.

That premium price for the Jetstream seems to based principally on its fast LTE (Long-Term Evolution) connection and a digital pen input capability that allows for drawings and signatures on the touchscreen.

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Will HP Temporarily Resurrects The TouchPad?

Hewlett Packard Co plans to produce “one last run” of TouchPads, days after declaring it will discontinue a line of tablets that failed to challenge Apple Inc’s domination of the booming market.

A day after the chief of HP’s personal devices division told Reuters the TouchPad might get a second lease on life, HP announced a temporary about-face on the gadget after being “pleasantly surprised” by the outsized demand generated by a weekend fire-sale.

HP slashed the price of its tablet to $99 from $399 and $499 the weekend after announcing the TouchPad’s demise on August 18, part of a raft of decisions intended to move HP away from the consumer and focus on enterprise clientele.

That ignited an online frenzy and long lines at retailers as bargain-hunters chased down a gadget that had been on store shelves just six weeks.

“The speed at which it disappeared from inventory has been stunning,” the company said. “We have decided to produce one last run of TouchPads to meet unfulfilled demand.”

HP may lose money on every TouchPad in its final production run. According to IHS iSuppli’s preliminary estimates, the 32GB version carries a bill of materials of $318.

“We don’t know exactly when these units will be available or how many we’ll get, and we can’t promise we’ll have enough for everyone. We do know that it will be at least a few weeks before you can purchase,” HP said in a blogpost.

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