"Mark"ed Men: Departures of HP's Hurd, Apple's Papermaster Reverberate through Mobile World

By  Michael D. Cole — August 10, 2010

Posted August 10, 2010

Two major executive resignations over the weekend reverberated through the mobile IT world.

On August 6, 2010, it was disclosed that Hewlett Packard CEO Mark Hurd resigned from all of his positions at the company, following discovery of inappropriate conduct in an investigation into a claim of sexual harassment.

That same weekend, it was revealed that another Mark, Mark Papermaster, Apple's senior vice president of Devices Hardware Engineering (its mobile hardware engineering chief), had left that company. His exit comes in the wake of so-called "Antennagate" and also amid rumors of disagreements with CEO Steve Jobs.

Though each exec resigned, it is widely believed they were both ousted and did not leave on their own accords. Both resignations also carried with them surprising undertones.

Hurd's resignation followed the discovery of allegedly inappropriate conduct in a probe into a claim of sexual harassment made by a former reality TV actress, Jodie Fisher.

Ultimately, the investigation, upon further digging, concluded that the company's sexual harassment policies were not violated. However, what was concluded was that its standards of business were breached. According to news reports the well-compensated HP CEO, who is paid millions upon millions, was found culpable of modest expense report fudging reported to be anywhere between $1,000-$20,000, including questionable payments made to Fisher, a contract employee. (Hurd, CEO at HP since 2006, reportedly offered to pay the expenses out of his own pocket in lieu of resigning).

What also took the business world by surprise was that Hurd's outster capped what was considered to be a highly successful stewardship.
Under the leadership of Hurd, considered to be a "TopGun" CEO by one advisory agency as recently as last year, HP had been the leader in sales of desktop computers since 2007 and laptop computers since 2006.

The resignation of Papermaster, who joined Apple from IBM just 15 months ago, came despite the marketing triumph of the iPhone 4 this year (With good reason, Jobs called it Apple's most successful product launch ever).

Even during Antennagate, Jobs and Apple had continued to maintain (at least publicly) there was no significant problem with the device's antenna, and proclaimed that the reception issues that iPhone 4 experienced were common to many other smartphones.

The Wall Street Journal reported, that several people within Apple familiar with Papermaster's exit said that it was driven by an " incompatibility" with the company's unique culture.

Opining on Papermaster's departure, Brian Marshall, an analyst with Gleacher & Co, said "This guy came from IBM and he was in charge of iPhone 4 hardware, but IBM doesn't have antenna technology." Added Gene Munster, an analyst with Piper Jaffray & Co., "It's too coincidental not to be related to the antenna issues."

"Hurd Mentality?"

Hurd left a strong legacy at HP in spite of the resignation according to some; arriving at the company in the wake of Carly Fiorina's tumultuous tenure, he was credited with reviving HP, both through severe yet effective cost-cutting measures and by streamlining HP's operation and its vision. (The company's stock shares first dipped before rebounding on August 9 in the aftermath of Hurd's resignation.)

If forecasts prove to be true, though, the transition at HP may actually turn out to be a boon for its mobile business.

According to Jayson Noland, an analyst at Robert W. Baird & Co., it is Todd Bradley, the executive vice president of HP's personal systems group which encompasses its mobile and PC business units, that has the inside tract on the job.

Bradley was Palm CEO from 2003 to 2005 -- "arguably the mobile company's golden years" as Daily Finance puts it. Bradley is also credited with engineering HP's $1.2 billion acquisition of Palm. Furthermore, it is believed he would offer continuity from Hurd's reign.

Dinesh Moorjani, an analyst at Gleacher & Company concurred that Bradley is particularly well-positioned because of his experience in the mobile business, an area that HP is aggressively moving into.

"HP is a little late to the game but what they're trying to do is very ambitious," Moorjani told Daily Finance. "They bought Palm for $1.3 billion, but they're going to spend a lot more than that on mobile. It's a high-risk move, but if they're successful they will see high reward."

As for Apple, the company has already announced that Bob Mansfield, Apple's senior vice president of computer engineering is set to take over Papermaster's responsibilities until a replacement can be found.

Mansfield was considered to be responsible for innovative parts of the iPhone including the retina display inherent in iPhone 4 and the phone's touchscreens.

While Papermaster wasn't responsible for the antenna design flaw with iPhone 4, it is believed he was ultimately responsible for letting it pass. He was conspicuously absent from the stage occupied by Jobs and Mansfield during Apple's recent high-profile press conference to quell Antennagate.

The Papermaster departure comes as evidence indicates Apple is getting set to ramp up production of iPhone 4: it sold 8.4 million devices in the second quarter of this year and reports suggest that it has placed orders of 10 million more for this quarter.

Still, as the entire mobile industry is well aware, the iPhone 4 has faced stiff competition, particularly in recent weeks, as evidenced by the better-than-expected success of Motorola Droid X. The BlackBerry Torch, unveiled last week by RIM, is already being seen as a strong iPhone competitor, particularly within the enterprise.

Other upcoming smartphones considered to be potentially compelling competitors include the Samsung Galaxy S (which will be available from six U.S. carriers) as well as AT&T's Captivate and Vibrant from T-Mobile.

In the aftermath of Antennagate (and Papermaster's departure), the industry is expected to have learned one huge lesson: antenna hardware design requires a very big checkmark next to it before a major release moves forward.

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