HP to Re-Enter Smartphone Market With “Phablets” in India
Hewlett-Packard will today announce plans to re-enter the market for smartphones and tablets that it exited in 2011, with a pair of voice-enabled tablets that will debut in India later this year.
HP’s plans call for releasing two devices, a six-inch and seven-inch voice-enabled tablet under the brand names Slate 6 (which is the one in the picture above) and Slate 7 VoiceTab. Ron Coughlin, Senior VP for the consumer PC business, confirmed the plans in an interview with Re/code Tuesday. The devices will run Google’s Android operating system and will be available in February. The company hasn’t yet disclosed a price.
The move essentially closes the circle on a statement that CEO Meg Whitman made in an interview in September when she said that “HP has to do a smartphone.” Rumors concerning an Android device in India have been swirling for a few weeks.
Coughlin said that HP chose India and not a market in North America or Europe to debut the devices because of market preferences and because the market for phones and smart devices in India is growing.
“We see a need in India that we can meet,” Coughlin said. “Consumers are looking for a way to consolidate devices. We think there’s an opportunity to enter a growing market where there’s an unmet need.”
The devices fit into a market segment often called “phablets,” combining the functions of a smartphone with the form factor of a smaller-sized tablet. It’s the fastest-growing segment of smart devices in India. The market research firm IDC said that phones with screen sizes ranging from five to seven inches grew 17 times in the second quarter of 2013 from the same period in 2012. And in the third quarter, IDC said phablets accounted for nearly a quarter — 23 percent — of the overall market for phones.
Phablets are turning out to be so popular around the world that over the summer, IDC lowered its 2013 worldwide sales forecast for traditional tablets by six million units in part because phablet sales are eating into them.
In India, HP will run into several companies who are well established in the smartphone market. South Korea’s Samsung claimed slightly more than 15 percent of all Indian smartphone sales in the third quarter, IDC said. Nokia, the Finnish smartphone company that’s in the process of being acquired by Microsoft, had a share amounting to slightly less than 15 percent. Two local brands, Micromax and Karbonn, had 10 percent and nine percent respectively. China’s Lenovo and Huawei also offer phablet devices there.
While Coughlin wouldn’t say anything about HP’s plans to launch the devices in another country after India, this appears to be more than a test case for HP. In fact, the country has been carefully selected for HP’s return to the smartphone business.
First, HP is by far the top brand among PCs in India, commanding a little more than 32 percent of that country’s market in the third quarter, according to IDC, well ahead of Lenovo, which had about 14 percent and Dell with about 12 percent.
Second, HP will have a chance because wireless carriers aren’t seen as gatekeepers to phone vendors the way they are in the U.S. In India, “the predominant way that people buy their voice-enabled devices is without a service contract,” Coughlin said. “We also have a great brand presence and a great go-to-market system there.”
Third, the devices tested well with Indian consumers. “When we were testing this concept, consumers in India had the highest purchase intent,” Coughlin said. He said the tests were conducted around three to four months ago, about the time that the first rumors of an HP device in India began to circulate. He declined to say how many tests were conducted, but said the results in India were “statistically significant.”
Coughlin wouldn’t discuss plans to release the Slate 6 and Slate 7 in other countries, but did say that the devices “generated a very positive response” when shown to representatives from retailers behind closed doors at the International CES in Las Vegas last week.
“I won’t say where or when, but you can expect us to do more in the coming months,” he said. “We’ll be talking about this in a more expansive way. But right now we’re focused on a successful launch in India.”
So here are the specifications from the press release:
The devices will run Android 4.2, a.k.a. Jelly Bean. They have a quad-core processor, though Coughlin wouldn’t identify whose: The candidates are Qualcomm, Nvidia and MediaTek, with Intel being a possible dark horse. They’ll come with 16 gigabytes of internal storage and will support MicroSD cards of up to 32GB for additional storage.
The display is 1,280 pixels by 720 pixels on the Slate 6 and 1,280 by 800 on the Slate 7. Both have an IPS display. They have front-facing stereo speakers. They’ll have a two-megapixel front-facing camera and five-megapixel rear camera with flash.
Another feature HP is counting on: They’re thin. The Slate 6 is slightly less than nine millimeters thick while the Slate 7 is 9.5 millimeters.
HP, you’ll remember, has had a complicated history with phones. In 2011, former CEO Léo Apotheker shut down the webOS division, which had been built out of the smartphone company Palm. HP had acquired Palm for about $1 billion in 2010 under Apotheker’s predecessor, Mark Hurd. The deal was said at the time to have been engineered by Todd Bradley, who before joining HP had been Palm’s CEO.
Before owning Palm, HP had sold phones under the iPaq brand, over which it assumed control in 2002 after completing the $25 billion merger with Compaq Computer engineered by Hurd’s predecessor, Carly Fiorina. The iPaq ran earlier versions of Windows Mobile. HP’s last iPaq model, the Glisten, was released in late 2009. The Palm deal pretty much put an end to that brand.
And just in case you wanted to see another picture of the Slate 6, here it is.
A small correction: Ron Coughlin is a senior VP. I had initially identified him as VP.