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HP Buys Palm for $1.2 Billion

Gordon Kelly

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HP Buys Palm for $1.2 Billion

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

SRS

April 29, 2010, 10:56 am

Oh dear. I truly hope that Palm's wonderful IP survives, but today's HP is all about corporate, safe, low quality - the house of middle management, creaking plastic and woeful software. I don't think HP will have a clue what to do with Palm, and WebOS will wither and die.

Epic

April 29, 2010, 11:10 am

Tablets might stand a chance but neither company knows how to market phones. Still, wish I had palm shares yesterday.

Hamish Campbell

April 29, 2010, 12:26 pm

So the management team is 'strong and experienced' at leading a company to bankruptcy?

Drazisaurus

April 29, 2010, 12:55 pm

Great. Hopefully we'll see some decent hardware to go with the excellent Web OS. Something that isn't flimsy with a crap keyboard.

Malderon

April 29, 2010, 2:07 pm

I disagree, I think this is actually a great fit. HP doesnt have a strong mobile devision, so Palm basically becomes their brand for that sector. Perhaps with some hp wonga behind them they can push webOS to be a serious player.

HarryGlass

April 29, 2010, 2:23 pm

I did wonder what the TR take on this would be. I think it's the perfect match, a marriage of two Hollywood stars. Now the question is will it be one of those marriages where they push each other to shine and dazzle the world in even greater fashion than they did alone or will they just settle into a boring routine lifestyle and bring out perfectly fine but utterly boring films (I mean devices). It could be amazing, but who knows what it'll deliver in time.





It's good that Rubinstein is staying on, it makes you think his vision can be continued and not stifled by the suits at HP (if HP really is as dull and corporate as people make out).





@Epic: Depends when you bought them. Palm shares have nosedived over the last 2 years, they might be up today, but long term it's lost their investors millions. Poor Bono.





Finally I think webOS on a tablet could be better than Android (and Windows 7) so things could get interesting in that space. I wonder what MS make of this.

ffrankmccaffery

April 29, 2010, 6:19 pm

At least Palm wasn't sold to a company interested purely in it's intellectual property. As at it's heart Palm has a first rate research and development team only let down by a shockingly incompetent management.

GoldenGuy

April 29, 2010, 6:25 pm

Hang on HK. It's not TR's take. It's Gordon's take. Like UKIP, Trusted Reviews is a very broad church. (That analogy works, doesn't it?)

sizzler

April 29, 2010, 7:22 pm

I think it might work out for them. HTC would have been better. Nokia would have been better. More fool them for not coughing up for Web OS. Both could have left apple standing with it.

Martin Daler

April 29, 2010, 10:27 pm

I don't get it. If Palm's WebOS is so fantastic, how come we heard so little about it up until now? Yup, I know we've heard the odd snippet, but nothing like the noise surrounding Android and Mac. Are we, and the media we read, all really so easily swayed by the "mindshare" warping antics of the marketing machines, have we no regard for true brilliance when we see it, did we all buy Android and Mac because they had more column inches, and left WebOS on the shelf because, because what?

Castalan

April 29, 2010, 11:31 pm

In another 12 months they'll write it off as a loss ... if I held HP shares i'd be pretty p'ed off right now

rav

April 30, 2010, 5:07 am

@Martin Daler


WebOS was always great. It's the Pre hardware that let it down. As to the everyone being swayed by the marketing I think that's pretty evident.

xenos

May 1, 2010, 8:01 pm

"HTC would have been a better fit." .. In your opinion.





HP has just become a company with the ability to make phones rivaling the iPhone, any Android handset and Windows Mobile 6/7.





Who knows how the deal worked, HP was clearly good for the money, most of the competition probably weren't. It was Palm selling to the highest bidder not the company best placed to make something from their IP. Although HP probably is probably just about the best positioned. I couldn't see Palm being bought by anybody outside of the US / EU, too many differences with ethos and design teams working in different languages on different sides of the planet.





If I was Dell I'd be worried as all they can offer on tablets / phones is Windows.. possibly Android and Chrome OS but then everybody else can too and the Android thing is being done rather well by HTC.

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