Simply put (and this has been happening for four or five years now) Assus Acer and Lenovo are eating HP's lunch on the low end and Apple is eating their lunch on the high end. All the while they are playing second fiddle to Dell ( and to an increasing extent to Assus) in between.

Additionally HP would need to play serious catch up to Apple, HTC, and in the international market Lenovo (maybe even Motorola although I don't know how that is going to work post acquisition) in mobil. And as Dell has learned, playing catch up in mobil requires throwing a lot of money down the drain without a guarantee for positive returns. (This last part about Dell is just my perception. For all I know Dell's margins on mobil have been stellar, but I don't think that's the case)

I understand the market's reaction to HP's pivote, although I think a lot of it is panic and hedging bets and some bad timing on HP's part, but that is what markets are suppose to do. I don't so much understand the tech industry's reaction to the move.