HP shares down after Apotheker unveils cloud plans

Shares fall more than 2 percent amid general market selloff spurred by Japan crisis

On the first day of full trading following chief executive Leo Apotheker's long-awaited statement of company strategy, shares of Hewlett Packard (NYSE: HPQ) fell more than 2 percent Tuesday. (Also see: Stepping out from Hurd's shadow, HP looks to the cloud) In early morning trading, shares were down as low as 1.15 to 40.34, a drop of 2.8 percent. Should HP shares fail to recover, the stock could close at the lowest price since Apotheker took the reins on Nov. 1. (HP shares finished at 40.97 on Nov. 17.) Perhaps it was the prospect of HP, long a hardware company, announcing it was entering direct competition with Amazon and Google by delivering cloud services to businesses and consumers, as well as continuing to develop its webOS mobile operating system. It's also possible that HP shares are being swept up in the sell-off triggered by investor concerns about the nuclear reactor crisis in Japan triggered by last week's massive and deadly tsunami. Other major tech stocks also were down Tuesday morning, including Apple (NASDAQ: AAPL), which was off by 10.02, or 2.8 percent, to 343.54. In Monday's presentation, Apotheker unveiled an ambitious strategy that would place HP in the middle of emerging enterprise and consumer markets. "We'll provide a single open market that integrates consumer, enterprise and developer services," Apotheker told media and analysts in San Francisco on Monday. From IDG's Robert McMillan (link above): The cloud marketplace will include an application store, as well as developer tools and enterprise services and support, he said. HP isn't saying when it will deliver its new marketplace or the cloud services, but Apotheker billed the services as open and able to support many development languages, and designed to be used by any software maker. "We will only vet the applications for security and interoperability," he said. Apotheker made it clear that HP's infrastructure-as-a-service is no half-measure designed to placate shareholders and gull customers. "If you want to be in the cloud business, it has to be large-scale," he said. "You have to be able to serve customers everywhere." Indeed. And while ambition is great, it means nothing without execution, and in the enterprise cloud market, HP will face two formidable competitors in Google and Amazon. Likewise, the company's planned tablet computer -- the webOS-powered TouchPad -- enters an arena already dominated by Apple's iPad, with a number of other companies, including Motorola, Samsung and Research in Motion, aggressively chasing market share. With TouchPad's debut not expected for at least three months, it will be playing a lot of catch-up, and it's not likely that HP shares will move north until the company can show that it's new focus is paying off.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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