By Patrick Avenell

In the same week that Harvey Norman began selling its TouchPad tablet, HP has announced it will be discontinuing production of this device and other hardware running off its WebOS operating system.

This astounding news was revealed in HP’s Third Quarter Results and message to investors overnight, which showed net earnings for the three months 31 July 2011 of US $1.9 billion (AUD $1.83 billion).

“HP will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward,” reads the report.

Just 24 days ago, HP Asia Pacific WebOS vice president Anthony McMahon told that HP was committed to WebOS and was investigating both licensing the OS to other hardware manufacturers and introducing to more products, such as netbooks and notebooks.

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This news is a hammer blow to retail partner Harvey Norman, which began selling the TouchPad on 15 August 2011. In the week before the launch, in an indication that the Australian office was aware of WebOS’ imminent closure, HP slashed $100 off the RRP of both 16GB and 32GB models.

It is great news, however, for rival tablet makers, especially Apple and the various Android suppliers. With one less OS to compete with, Android and iOS can now totally dominate the consumer space, effectively locking out any new entrants.

Although it is unlikely that Research in Motion, which needs its own operating system to provide BlackBerry’s unique sales proposition — security, will ever discontinue using its own OS, HP’s departure will cause concern amongst consumers. A healthy and vibrant OS industry is good for consumers, who value choice and oppose restrictions. There will now be a new caution, in an already cautious consumer space, that RIM will also abandon its nascent PlayBook OS.

Research in Motion would do well to allay these concerns with action, the most telling of which would be to finally release the native email client for the PlayBook.