Silicon Valley Superstar's Departure Is A Big Blow To HP

One-time Apple engineering superstar Jon Rubinstein's decision to leave Hewlett-Packard couldn't come at a worse time for the world's largest computer company.

HP confirmed Friday that Rubinstein, the father of the Apple iPod and a one time confidante of late Apple CEO Steve Jobs, has left the building.

Rubinstein's exit comes as new HP CEO Meg Whitman is moving quickly to bring a healthy dose of innovation with a capital I to the company that by more than one account has lost the innovative spark that led to countless product breakthroughs over the years.

Given HP's decision to exit the fast growing tablet market last year, a vote of confidence from Rubinstein to lead a new product development charge at HP would have gone a long way. Remember Rubinstein was given what HP called a "product innovation" role within HP's PC business last July.

It is more than symbolic that Rubinstein's au revoir comes just two days after Apple posted an almost unimaginable 74 percent increase in sales in its fiscal first quarter to $46.3 billion after selling a mind-boggling 37 million iPhones and 15.43 million iPad tablets.

The consumerization technology tidal wave that is Apple is reshaping the commercial computing market at a blinding pace, and HP just lost one of the engineering superstars that helped set that consumerization technology table.

Remember, this is the engineer that received what can only be considered a glowing farewell from the hard-to-please Jobs: "Jon has done an excellent job as a member of Apple’s senior management team, as well as building our world-class iPod engineering team and running our hardware engineering team prior to that," said Jobs at the time.

Rubinstein resigned from Apple in 2006 but stayed on as a consultant until joining mobile device upstart Palm the following year. Rubinstein was CEO of Palm when HP acquired the company for $1.2 billion in July 2010. After the acquisition, Rubinstein became a senior executive within HP's PSG business charting strategy and product development with Bradley.

Rubinstein's departure raises once again all the ugly issues that surrounded the HP board’s decision to disclose last August 18 that it was exploring "strategic alternatives for its Personal systems Group" including "a full or partial separation of PSG from HP through a spin-off or other transaction."

NEXT: Apotheker Gives Short Shrift To HP's PC Business

It is no small matter that Todd Bradley, the executive vice president of HP's $40 billion PSG business, served as the CEO of Palm from 2001 to 2005 before he came to HP. Bradley had a vision for the PC business that included tablets and smartphones when he pushed hard for the Palm acquisition. All of that, of course, was given short shrift by former HP CEO Leo Apotheker.

Bradley and Rubinstein, in fact, were blindsided by Apotheker who informed them both that the company was killing the HP TouchPad tablet and getting out of the Palm phone market only days before a press release was issued.

Whitman, who was a member of the board that authorized the decision to kill the HP TouchPad Tablet and the Palm smartphones, is now trying to pick up the pieces from the Apotheker fiasco. Bradley, for his part, faces the daunting task of rearchitecting product strategy for a business whose most precious engineering asset -- the Palm and WebOS hardware and software development teams -- has been left twisting in the wind.

HP solution providers, meanwhile, are filling in the gaps left by HP's tablet flop by turning to Apple and other vendors.

Bob Venero, CEO of Future Tech, a Holbrook, N.Y., solution provider, says Future Tech will sell thousands of Apple iPads this year. "It's a hot product," he says of the tablet. "There is no question about it. I have never seen anything like it. And it is going to go further than that. I see customers moving to just smartphones where they won't even use a tablet."

Venero, who was disappointed by HP's decision to kill the WebOS-based HP tablet, says he doesn't even travel with a notebook anymore, but instead relies on his Apple iPad. "That's becoming mainstream," he says. "We have customers that are shifting their purchases from notebooks and PCs to Tablets."

Rick Chernick, CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based solution provider and HP partner, said he sees Rubinstein's departure as a fait accompli given the demise of the TouchPad. "They dropped the tablet and WebOS, so what do they need him for?" says Chernick. "I'm just glad they still have Todd [Bradley]."

"I can't sit here and beat myself up over what could have been and what should be," says Chernick of the HP Tablet demise. "I am dependent on my manufacturers to bring me my products to go to market with. I can't apologize for not having an HP Tablet. Nobody has it all. But HP has a helluva lot of stuff going for them."

Chernick also carries the Apple iPad. "HP is 20 times bigger for me than Apple," he says. "But that doesn't mean Apple isn't important."

Important indeed. And becoming more important with every day that passes.