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HP Buys Palm for $1.2 Billion

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Well I never...

All the talk was of Samsung, HTC, Huawei and Lenovo, but out of the blue Hewlett Packard has announced it has agreed a deal to buy stricken handset maker Palm for $1.2bn. The deal will be closed during HP's third fiscal quarter ending 31 July 2010.

First the obligatory quotes:

HP
"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."

Palm
"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," said Jon Rubinstein, chairman and chief executive officer, Palm. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."

So what does all this mean? Well neither company gave much away during a live conference call that took place at 10pm GMT other than to point out the obvious: HP wants to use its financial muscle to invest in webOS in an attempt to save the still exciting, if underdeveloped, platform.

More interesting as it turned out was a single line from the companies' joint press release: "Palm's unparalleled webOS platform will enhance HP's ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets."

I don't know about you, but Connected mobile device screams 'tablet' to me while there is also the possibility of some form of smartbook (Qualcomm's spin on the netbook form factor which marries a mobile operating system, integrated 3G and an ARM-based processor). Either way, HP certainly has bigger plans than simply smartphones and I can't blame them given webOS still has best in class multitasking and system notifications.

So are we optimistic or cynical about this? Actually a bit of both. On the plus side HP has the financial clout to do for webOS what Palm was never able to achieve and this could shake up the whole industry. On the negative side HP doesn't have a great history when buying major brands. The $25bn acquisition of Compaq in 2002 was a farce, the iPaq horribly neglected and the 2006 purchase of Voodoo has transformed a once radical PC maker into such a generic range that its frustrated owner Ravi Sood quit the PC sector altogether. So what fate awaits Jon Rubinstein and the Palm and webOS brands remains to be seen.

For now we'll slap on our happy faces since Palm has been saved, but only time will tell if this was the day of its resurrection or the day which committed it to a slow and painful slide into irrelevance...

HTC would have been a better fit.

Link:
HP Press Release

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