IntoMobile breaks down the HP acquisition of Palm


We’ve had a little time to mull over HP’s $1.2 billion acquisition bid for the venerable handset-maker Palm and the IntoMobile team is divided on how big an impact this will have on the smartphone space. Does an “HPalm” represent a major new mobile player or are these just two dinosaurs huddling together for shelter? Read on after the jump for a thorough breakdown of the deal.

Will:

HP has been a non-starter in the consumer smartphone space for as long as smartphones have been around. Palm was the smartphone pioneer that spearheaded the movement towards converged mobile phones that could keep track of your calendar, manage contacts, browse the web, check e-mail, and make phone calls. Recently, though, Palm has been failing to cash in on their pedigree and has been teetering on the brink of irrelevancy. Alone, neither company could have made a big dent in the consumer smartphones wars. Together, they might have a fighting chance.

Palm needs money to take their outstanding webOS and marry it to more compelling and powerful hardware. The current lineup of webOS phones are good, but they just don’t have the “oomph” to keep up with webOS’ potential. HP has the money that Palm doesn’t have, and could give webOS the boost of confidence it needs to compete with the likes of iPhone and Android. It’ll be interesting to see how HP decides to use the Palm brand. I think we’ll see Palm smartphones running webOS. We’ll also see webOS powering tablets, under the HP moniker. I can’t wait to see what HP’s money allows Palm to do with the webOS and future webOS smartphone hardware!

Simon:

I’ve always liked webOS. I was there for the announcement and got pumped along with everybody else, and was summarily disappointed when the Palm Pre and Pixi failed to really catch on in the market at large. There was really no reason in particular webOS should have necessarily failed on its own. The hardware was as original and stylish as the new operating system, despite a few tiny flaws in both, and Palm embraced the developers who gathered around the new platform. All of that only made Palm’s dire financial straits all the more tragic.

The HP acquisition seems like it will be a good second wind for such a promising platform, but even then, it will be an uphill battle against iPhone, BlackBerry, and Android. I’m interested to see how HP leverages its well-entrenched position in the PC and printer markets in its mobile foray. There are a few no-brainers, like native direct-to-printer functions for the webOS photo album app, and seamless syncing with HP desktop computers.

I just hope they don’t change the phone’s name to the “HPre.”

Stefan:

Short answer: “Meh.”

Long answer: I’ll never forget the first time I went online using WiFi. No, it wasn’t on a laptop but it was when my uncle showed me his Compaq iPaq with a PCMCIA sleeve that he shoved a WiFi card into. I thought that was the coolest thing I’ve ever seen at the time. HP bought Compaq and the iPaq line turned to mush. Do I have any hope that HP can fix Palm? If they leave Palm alone, then maybe.

If they start trying to manage Palm, then all is lost. I’m one of those people who has long memories of Palm. I’ve had several Palm OS devices and during high school, while taking advanced placement courses, I even used a Palm connected to a serial keyboard to take notes. I, along with many other folks, want to see them survive, but I don’t think this deal with Palm will do anything. I hope the future will prove me wrong.

Ben:

For me the HP/Palm deal is a bit irrelevant – because unlike most people, I don’t think webOS was that great to start with (see my comments here).

My view was/is that the webOS is great at the presentational layer, but lagged as soon as you wanted to do anything meaningful on the device – and I’d assert that it’s because the UI is a layer on top of the actual OS, so there’s a delay if you call to the OS to do anything (like read/write to the memory).

I don’t see how HP can resolve this issue completely, and anyway, I can’t remember HP ever making a mobile device that I was excited about. So if you think about (1) HP not yet having delivered world-beating industrial design on hardware and (2) the inherent issue I believe exist with ‘doing stuff’ on webOS, then I don’t see how they are going to produce anything revolutionary.

Of course, I could be wrong (it does, very occasionally, happen!)

James:

If HP has designs on becoming a big-time player on the smartphone scene, the move makes perfect sense to me. WebOS has a lot of amazing things going for it and if HP can tie it into a sexy and functional package, I’ll take a look (I know I’m not alone in this!) While webOS generally gets two thumbs up from my point of view, the Pre and Pixi hardware leaves a lot to be desired. If HP can marry their hardware expertise with Palm’s (er, should I say HP’s) webOS operating system … there’s no telling how far they could go.

I’m really looking forward to see what comes next from HP. The next 6 months to a year are going to be critical … and fun, that is, for us on the outside :)

Dusan:

Palm finally has a future … as part of HP. Next thing to look at is what HP plans to do about it. For a start, they could bring the Pre and Pixi to the wider Europe and Asia. But what’s next? I’m hoping to see more devices running webOS, including a tablet. Let the HP iSlate 2 speculations begin! :)

Blake:

While not my number one choice who I wanted to acquire Palm (HTC), I believe that HP will do some great things with webOS. Palm now has some backbone with HP now, and hopefully now we will see what webOS is really made of. WebOS is a great operating system, but it just took it way too long to get it to what it is today – which isn’t much when comparing to other operating systems today.

It’s still beautiful, and intuitive, but it could definitely benefit from some work with HP. With HP on their side, I believe that webOS will start making the strides it needs to really perform in the smartphone market today. I’d also like to see what HP’s plans are for other webOS devices, such as tablets. It may take a while to get going, but this should be the be the beginning a beautiful marriage. How long before they divorce is whole other question.

Yours truly:

I love this deal. As the world’s largest computer maker, HP had to do something dramatic in the smartphone space in order to remain relevant for the future. Convergence is here and the future of computing is going to be smartphones and connected devices. The size and scale of HP means it will be a beast in this space – on the enterprise side, it will be able to throw in a few thousand handsets when it sells a company laptops but the consumer side might be a bit trickier to crack.

We all knew Palm was done as an independent company (despite what its CEO was saying) and having HP’s pockets should let it push webOS at scale. I think the platform is the best 1.0 smartphone OS I’ve ever seen but the competition is moving at a breakneck speed, so HP needs to hit the ground running once this deal is completed. Let’s also hope HP puts on the full-court press for developers because the winner of the smartphone wars is going to be determined by who has the most compelling apps.

There are still plenty of questions: What’s the new hardware going to look like? How’s the branding going to work? Is it a good or bad thing that Jon Rubinstein is sticking around? Can Palm finally release a touch-only device? How long will it take to integrate Palm into the larger company and what are the pain points going to be?

This deal is going to have major ramifications over the next few years and you know IntoMobile will be at the forefront of coverage. Let us know what you think in the comments or follow us on Twitter (@IntoMobile).

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