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HP Dumping Tablet and Phone Products, webOS on Hold

Just over a year after HP purchased Palm for its seemingly-tasty webOS software (for $1.2 billion, no less), the company has suddenly decided to put the operating system on hold altogether. The announcement isn't quite official, but the company clearly stated its intentions in a Thursday press release, that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones.

"In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward," the company said.

The news arrives after reports of HP launching the 64 GB version of its white Wi-Fi TouchPad tablet only in Europe. The device features a 1.5 GHz Qualcomm Snapdragon dual-core processor (APQ8060), HP's webOS 3.0, a 1.3MP camera, Bluetooth 2.1 + EDR, 802.11b/g/n and more. The Pre 3 smartphone also went on sale in Europe just one day prior, and still hasn't reached the North American market as of this writing.

HP originally began its journey with Palm and webOS on April 28, 2010. Since then, HP made webOS out to be the next big operating system after quickly killing off webOS' creator, Palm, in February 2011. By March, HP boasted that its new OS would be on every PC shipping in 2012, and even revealed months later that it was in talks with other companies about licensing out webOS. The company even launched its first webOS smartphone, the Veer, in May.

All seemed well in the land of HP.

But then the TouchPad hit the shelves on July 1, and HP seemingly went quiet. Consumers weren't digging its new tablet offering, and the company decided to first introduce a $50 discount. When that wasn't enough to move tablets off store shelves, HP offered spot discounts of $100 at various retailers until the company caved in and decided to make the reduction a permanent fixture. Then Wednesday brought reports that Best Buy was currently sitting on a mound of TouchPad tablets, selling only 25,000 of the 270,000 units it had on stock. Best Buy reportedly wants HP to take all of the unsold tablets back.

“It’s obvious that they were using the TouchPad as a make or break event for webOS devices,” said Ben Galbraith, former webOS platform evangelist for Palm, in an interview.

But as indicated earlier, HP may be saving its webOS software for PCs. During the announcement Thursday, HP reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). "HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction," the company said.

More is expected to arrive shortly after a conference call covering HP’s third quarter 2011 financial results, so stay tuned.