Today's bombshell announcement that HP will cease making webOS hardware came like a bolt from the blue, but in truth HP has been failing to execute on webOS since the company acquired Palm.

How did HP fail so badly with webOS hardware? What will the future hold? We know the answer to the first, the second we have only informed speculation. Read on for both.

A bad year

The present situation for webOS is a far cry from the excitement that HP managed to drum up at its Think Beyond event last February. Seven months after the event, two of the three products unveiled that day have launched to sales that only a cheery optimist could call tepid. Yes, HP has never claimed (except for the occasional executive misstatement) that it would be overtaking the iPhone, iPad, or even Android -- but right now it doesn't look like the Veer or the TouchPad are much more than blips on the marketshare radar.

The list of things that HP has failed to execute on with webOS since the acquisition is a mile long. The company has failed to use HP's vaunted "scale" to grow the webOS Global Business Unit (GBU) enough so the division could create products to match HP's ambition. It failed to release compelling hardware, instead using Palm's old and tired designs for the Veer and Pre 3. HP released the Veer but failed to convince consumers that small phones could be cool again. It allowed webOS to become fragmented (there are eight versions on the market today) by failing to offer consistent updates to legacy devices (and watch out for the Pre 2 to be next on the "will not update" list). HP has almost completely failed to bring big-name developers and apps into the webOS ecosystem. Worse, the company has failed to articulate a clear development roadmap to what few, dedicated developers it does have. HP has failed to garner real carrier support for its offerings. While marketing has improved since the early "creepy lady" days, HP hasn't generated a strong demand for the platform or even articulated a clear target demographic. It failed to appropriately price the Veer or TouchPad at launch. It launched the TouchPad before it was ready. Heck, just this week HP botched the PR for the launch of the Pre 3 and the 64GB white TouchPad.

Believe me when I say that I could go into excruciating detail on each and every one of the above failures, but let's focus on just one failure as a touchstone (excuse the pun) example of how HP kneecapped a webOS product before it even got into the fight: the TouchPad launch.

A bad launch

I think that HP was caught in a fundamental tension between wanting to get the TouchPad out into the marketplace before it became too locked in to an iOS vs Android dynamic and making it as good as it could be before launch. As a result, HP released the TouchPad before its 3.0.2 update, leading to a bevy of poor reviews and bad feedback from customers.

There's no way to know whether the TouchPad could have had a more successful launch had the software been more fully baked, but it should have been easy to know that it wasn't working as it originally shipped. Faced with the choice between finishing a product before shipping it and trying to just get a quick win, HP blinked.

Next, HP dropped the price of the TouchPad by $100 for a weekend, then made it permanent. Just as the company didn't think the OS strategy through for launch, it appeared to be flailing when it came to the pricing strategy. HP is no stranger to changing the MSRP on the fly for its products, but it's obvious that the company missed the mark with the original price.

Two days ago, AllThingsD reported that Best Buy had sold only 25,000 of its original purchase of 270,000 units and is rumored to be understandably unhappy about the situation. HP essentially confirmed the terrible sales numbers today, saying that the TouchPad and Veer have "not met internal milestones and financial targets."

Finally, HP was already adding an Osborne effect to TouchPad sales. A WiFi-only model with that faster processor and 64GB of storage was "announced" in a short, 4-line update to a PreCentral post pointing out the thing was on sale already in France (just as they did with the Pre 3 the day before!). The TouchPad 4G, also with a faster processor speed, has been announced. There's also the rumored TouchPad Go, a 7-inch model spotted on the FCC, which is likely to be arriving soon. HP must want to accelerate its product cycle -- something I'm all for -- but from here it looks like HP tried to run before it could walk. Of course, it's all completely moot now, but these upcoming models would have further hurt sales of the original TouchPad, already rumored to be sitting unsold in retailer warehouses.

It's possible there was a method to the madness in these launch decisions, but I doubt it. It might be nice to imagine that HP's plan all along was to get an initial sales-punch from the hardcore fans and then quickly turn this soon-to-be low-end TouchPad into a promotional add-on for HP laptops. What's more likely is that we saw what we saw: an utterly botched launch of a tablet that deserved better based on the merits of its operating system.

Now, I'm not saying that had HP executed this launch perfectly that the TouchPad would be a smashing success in the marketplace. The conventional wisdom that the current tablet market is essentially an iPad market isn't too far from the truth. What I am saying is that these failures of execution meant that the TouchPad was destined for a lackluster launch no matter what the market dynamics were.

A bad story with a great hero

Before the HP acquisition, going back even before the rise of the iPhone, Palm was always the perpetual underdog. Until now, it was easier to excuse those failures because it was a (relatively) scrappy little company with meager resources fighting the giants of the industry. webOS only helped in that regard -- it seemed so forward-looking with its web-centric philosophies.

HP's "scale" was supposed to change that. Instead of being the underdog, webOS would be able to roll out on more and better devices more quickly and with more marketing muscle. That never happened. Under HP, the webOS platform labored under the same failures of execution that it did under Palm.

The story of Palm and webOS is The Little Engine That Could, but some jerk ripped out the last three pages and we're forced to read it over and over again. It's frankly exhausting seeing this same narrative play out year after year, never seeing the top of the hill. webOS is perennially the little engine that could have.

Yet we keep opening that book at night, re-reading it. Mainly because there's one key thing missing from that the litany of failures above: webOS itself. While the transition to webOS 3 and its Enyo underpinnings has been a little rocky, it still represents an intelligent, extensible, accessible, hackable, and above-all elegant framework. Yes, the original version that shipped on the TouchPad was critically flawed, but in general there's more that's right about webOS than what's wrong. Now that HP has given up on making hardware, webOS may never get its chance.

Given the stiff competition webOS faced in the marketplace, it's tempting to just say that webOS has failed. The truth is that we don't really know if webOS could have succeeded given HP's utter inability to execute on the basics of making smartphones and tablets.

I think it's better to say this: HP failed webOS.

What's next?

In light of the fact that webOS VP Stephen DeWitt adamantly told employees that "we are not walking away from webOS," the most likely scenario is that HP will try to license webOS. Samsung and HTC would feature prominently on the list of licensees who ought to be interested. This scenario makes the most sense, but brings significant challenges along with it -- namely, that HP will have to compete directly against Google and Microsoft in the red-hot mobile platform market. That would be hard enough, but HP has repeatedly said that Microsoft is its most important partner, and going up against Redmond doesn't exactly sound tempting, especially with the future of HP's PC business equally uncertain. Competing against Google might be easier if the Motorola deal upsets the Android ecosystem, but Android is also free -- it won't necessarily be easy for HP to find paying customers for webOS, and if the company keeps losing money on Palm's platform, it might just pull the plug entirely.

What happens if HP can't find a licensee? webOS falls within the Personal System Group, which HP is looking sell off. Most of HP's quarterly losses were due to webOS, so if HP can't find a partner they'll likely keep it on a short leash. In that scenario it's probable that HP will divvy the PSG up into the webOS and the PC businesses and sell them all off piecemeal. But it's unclear whether there's a likely buyer for webOS. It could be a very tantalizing purchase for Android licensees feeling burnt by Google's proposed Motorola Mobility acquisition (which has it's own industry-shaking possibilities ). Chances are that the selling price would be a good bit lower than the $1.2 billion HP paid for Palm. However even at bargain-basement prices, I'm not sure that HTC, Samsung, or any other Android licensee has the cash and the chutzpah to try to revive webOS while going up against Google and Microsoft. In short, the same problems HP itself faced with webOS.

webOS' future is completely up in the air. Internally, we heard that HP hopes to know what the plan is within two weeks. That's an aggressive timeline, but it's about time HP got aggressive with webOS. As always, stay tuned.