It has been on the cards since the relaunch of Palm at CES 2008 that the likely outcome for the new Palm was to be acquired. Spear-headed by former Apple executives, such as CEO Jon Rubinstein, and capital from Elevation Partners, Palm set out to essentially become a second Apple in the mobile phone industry by launching Webos.
Although I have not thoroughly tested and reviewed Webos phones, such as the Pre or Pixi, Webos brought innovations to the mobile phone industry in terms of contact management, messaging and combining activities.
However, unlike when Apple entered the high end mobile phone market, Palm faced much stronger competition and failed to gain developer traction as well as operator support and commitments. These issues resulted in poor customer uptake. Consequently Palm's share price has tanked and there have been plenty of speculations as to which company would acquire Palm.
Enter HP. For USD1.2 billion will acquire Palm and its assets. This is a good and sound acquisition for HP. As an early OEM partner of Microsoft, HP has suffered from being a 'happy slave'. While being a 'happy slave' is comfortable as long as the master does well and the slave never challenges the master, it also deprives the slave from developing key skills if the industry changes over time. The consumer technology markets have transformed in the past five years, while HP has failed to adopt to the new competitive landscape since it is a 'happy slave'. This leaves HP with two main issues which we have challenged HP on for years;
Firstly, it lacks a coherent direction to consumer software. There is no HP 'DNA' in software. There is no over-arching look and feel to HP products, from a software point of view. When a customer turns on an HP product the customer should automatically know that this is HP, and feel at home. This is not the case today. Although there are various software projects at HP, there lacks a consistent and coherent way of developing and presenting HP software to customers.
Secondly, HP lacks a consumer mobile play. While HP has an Ipaq line up for the corporate market, it has been completely sidelined by Apple, Samsung, Nokia, Motorola and HTC in the consumer mobile phone space. Being a 'happy slave' HP has relied on Windows Mobile, which has fallen wayside in recent years in comparison to competitive offers from Android, Iphone os, Blackberry os, and Palm's Webos.
We will follow with interest how quickly HP will integrate Webos in consumer products. Larger screen touch-based products, such as the HP Slate, is an obvious product category. However, will HP blur the lines between a traditional PC (notebook / desktop) that run Windows, and products running Webos? This will be a difficult choice as Microsoft is a key software provider.
Bottom line, with the Palm acquisition HP is now a lot more credible and interesting in the consumer technology markets.
