HP Grabs Palm, WebOS for $1.2 Billion, What's Next?

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News Posted: Wed, Apr 28 2010 7:45 PM
As recent as a week ago, Palm chairman and CEO Jon Rubinstein held firm that things weren't as bad as they seem, that Palm wasn't in dire need of a lifeline, and he and his company had a plan to return the struggling smartphone maker to profitability. It looks like we'll never know if that was true or not, as HP today announced it has entered into a definitive agreement to purchase Palm for about $1.2 billion. You snooze, you lose, Lenovo, HTC, and everyone else rumored to have been interested in Palm.

The big draw for HP is Palm's webOS platform, which the OEM hopes will help it participate more aggressively in the fast-growing and highly profitable smartphone and connected mobile device markets. According to HP, Palm's webOS will allow it to take advantage of key features, like multitasking and sharing up-to-date information across different applications.

"Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said Todd Bradley, executive vice president, Personal Systems Group, HP. "And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

It will be interesting to see where HP goes from here. Obviously the OEM has some kind of plan for Palm's webOS, as well as the financial backing that Palm never had, which raises all kinds of questions and potential scenarios. Will we see a webOS enabled tablet from HP? Perhaps. How will HP attack the smartphone market, and can it compete with Google, Microsoft, RIM, and Apple? Maybe.

Whatever HP's plans are for the webOS platform, the OEM would be wise to focus on app development. According to Todd Bradley, EVP of HP's Personal Systems Group, Palm has about "2,000 applications and growing," a pittance compared to Android (50,000+) and iPhone (180,000+).

And what of Jon Rubinstein, the man who didn't necessarily think Palm needed to be sold in the first place? He's expected to stick around with the company, so perhaps we'll get to see what his plans were after all.
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Inspector replied on Wed, Apr 28 2010 10:03 PM

Well webos isn't so popular or out for too long so the app count is of course going to be low :D, I would love to see what HP does with their new toy :D.

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Super Dave replied on Thu, Apr 29 2010 12:24 AM

HP? Wow. $1.2 B? WOW!

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I really wouldn't be surprised if they took advantage of the WebOS in the HP tablet.  It would be pretty cool but then I feel like it could make it somewhat limited like the iPod/iPad OS.  There's a crap ton of talk about it being a possibility.  I also hope HP makes sure that Palm's OS syncs with Exchange correctly from now on :P (oh my gripe with that)

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I wonder how the PALM stock is going to do tomorrow morning!


Super Dave:

HP? Wow. $1.2 B? WOW!


I know, right?  They overpaid by...$1.2 billion.

This is worse than the Phillies Ryan Howard $125m-5 year deal.

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To bad they couldn't take some of that money and sink it into letting the Slate have a built in phone:P

I never really understood the need for that many apps to begin with. HP sure does like to put a lot of stuff on their PCs so I am sure this will only add to that. Never knew the need for things like Minesweeper :P

As long as they keep their prices reasonable then I guess they could do whatever they want with the money they get from me. I just wish they kept more of the production here or at least Canada.

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Devhux replied on Thu, Apr 29 2010 5:03 AM

For a slate device, a slimmed down OS is deal. Ready to use in seconds, very few slowdowns, and long battery life. Tossing Windows 7 or Mac OS on such a device would be overkill and ruin the experience (IMO). After all, have Tablet PCs ever taken off? Not really. Not to bash Tablet PCs (as I own an HP tablet and really like it), but I don't think anyone will argue the demand just hasn't been there.

As with the iPad, give it time for app developers to see what they can do with a slate form factor - I think you'll be pleasantly surprised with the results.

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rapid1 replied on Thu, Apr 29 2010 11:56 AM

I think this was a good move for both. I remember when I worked at Medical manager (now known as WebMD who they joined with "or took over" years ago) I was a hardware implementation specialist and we were working on a project with the Compaq handheld units. This was when Palm and them were major competitors, and right after or before HP bought out Compaq as well.

So they have experience as well as a decent amount of IP in a very related market. The hand held at that time was wireless A/B only at that time, and it was a new thing as well. If HP plays it's card's right with the large amount of resources they now have, we may see some real competition from them on smart phones, tablets, and the mobile device market top to bottom I bet.

The Compaq handheld unit was also the major competition in many ways that took Palm out in that market as it was a very functional device, more so than Palm at the time. I think we could really see something on there Slate device, as I for one after looking at what they were saying about it was kind of disappointed by what I saw.

Hopefully this brings that back around a bit. I will also say HP has been trying to do there own OS etc longer that Google has even existed. So I think the joining of HP and Palm brings some very particular strengths at a very good time for HP. This may also be a kind of bad thing for the G monster as well, we will see in the somewhat near future I would imagine.

This may also make them more efficient with double the R&D in one specific area. Apple may very well see some competition if they play there cards right as may Android (another piece of Google), this in many ways looks exactly like something from Google as well as many other big market players as of late.

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digitaldd replied on Thu, Apr 29 2010 12:23 PM

Hmm some good, Palm will live on, their management will continue to manage the company. Bad HP has killed quite a few innovative products after taking control of them. I'm a bitter OpenMail fan, anyone remember that?  A WebOS tablet could be interesting if done right.  I guess the iPAQ is finally dead now YaY!

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