Does HP Buying Palm Promise To Solve Any Problems?

from the hey-at-least-it-was-cheap dept

It’s been rumored for several weeks now that Palm was up for sale, with a number of different companies supposedly taking a look at it, but news has come through now that HP has picked it up for $1.2 billion. Palm’s business has been running downhill for a few years now; its worldwide market share has fallen from 3.5 percent in 2005 to 1.5 percent in 2009 — despite the relatively warm welcome its Pre device received. The Pre was the first Palm phone to run its latest operating system, WebOS, which was supposed to help the company compete in a revitalized and highly competitive marketplace against the likes of Android devices and the iPhone. But that hasn’t yet happened. The Pre (and the following device, the Pixi) hasn’t grabbed significant market share, which compounds Palm’s other problem: lack of a strong developer community for WebOS. That is actually sort of ironic, given that an older incarnation of Palm was probably better than anybody in the mobile space at cultivating a huge and loyal developer community, back in the days of Palm OS. So if scale and a lack of developers are the two biggest problems holding Palm back, does the HP deal actually do anything to help solve them? Maybe that’s looking at the situation the wrong way: perhaps the point of this isn’t for HP to fix Palm, but for Palm to bring something more to the table for HP. Like 1,500 patents.

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Companies: hp, palm

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Comments on “Does HP Buying Palm Promise To Solve Any Problems?”

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15 Comments
Big_Mike (profile) says:

Well I have not lost any interest in buying a palm. HP support is riddled with buy this and buy that with less interest in fixing your problem. Not to mention the fact that the problems I have had with their product were always bad hardware. I really wanted the Palm Pre back when it was new but my carrier didn’t offer it. I’m glad they didn’t and I’m glad I went to Blackberry instead.

Not an HP fan… Now not a Palm fan…

Christopher Gizzi (profile) says:

That's what I thought

Patents aside, I can’t see why HP would pay 1.2b for Palm. As of yesterday’s close, its market cap was in the mid 700m range. That’s a huge premium for a dying brand, an unpopular mobile OS, and no direction. The fact that existing management is staying to run the company seems, well, crazy.

I understand the synergies are there but HP better give Palm a lot more than cash to fund new projects. It needs to focus on something – anything, really – if they want to compete with an aggressively saturated market with two dominating providers.

hegemon13 says:

Re: That's what I thought

“…an unpopular OS…”

It depends on what you mean by “unpopular.” If what you mean is “not a lot of users,” you are correct, but a juggernaut like HP could do a lot to change that with proper marketing and HP brand recognition. The lack of users is due to WebOS being available only on two mediocre pieces of hardware, not due to a failure in the software itself.

On the other hand, within it’s user base, WebOS is EXTREMELY popular, to the point of obsessive fanaticism. Just take a trip to precentral to see what I mean. WebOS users (myself included) tend to be very pleased with the OS. There just aren’t that many of us yet.

Dean Landolt (profile) says:

off the mark...

Mike:

You keep talking up some “lack of developers” for WebOS (like they’ve missed the lock-in boat somehow) but I think you’re way off the mark. The beauty of WebOS is that every web developer is a WebOS dev — it really *is* just html, css and js.

Yes, I think it’s a shame it’s not on more devices but that’s not for lack of developer support — I can assure you there are a lot of folks in the web dev community thrilled to hear that HP is “doubling down” on it.

Personally, as a developer I could care less about the mobile space but between Apple’s ridiculous terms of service and Google’s love for all things java it would be a huge mistake for HP to cut bait on WebOS — it *will* be a successful platform if they put decent hardware underneath it.

hegemon13 says:

A solution if handled correctly

As a very happy Pre user, I would have a hard time migrating to another mobile OS. There’s a lot about WebOS to love: easy to develop for; thumb-friendly, gesture-based navigation; snappy performance (for the hardware it’s on); and true multitasking. That last one is the most important, and while some say multitasking does not matter on a phone, I would guess they say that because they have not used it. Once you get used to it, Android is a maddeningly clunky experience.

May critics and reviewers also agree that WebOS is an extremely good operating system and a valuable asset. HP themselves seem to agree in their statements, as they claim that WebOS is one of the major reasons they purchased Palm. I think the expansion of WebOS in the marketplace will be determined by how HP handles it from here on:

-Can they create decent marketing materials that show customers why they might want WebOS? (No more creepy lady in a field talking about reincarnation, please!)
-Can they create hardware that uses WebOS in a compelling way? Certainly multi-tasking on a tablet is even more important than on a mobile phone, so WebOS could become even more compelling in that context.
-Can HP leverage their market influence and business relationships to attract a large influx of developers who were skittish when Palm was on the verge of bankruptcy?
-Can HP move quickly to launch new hardware, or support and accelerate hardware Palm may have in the pipeline? Timing is going to be everything, and HP will need to move FAST.

Time will tell. One thing is certain: Palm just got a BIG third chance, and they are far better off than they were. Here’s hoping that WebOS becomes a major mobile OS contender. Or at least big enough that I can buy a more-powerful, next-gen WebOS device.

koz1 (profile) says:

Re: A solution if handled correctly

I agree. Web OS is very good. It needs to have compelling hardware and great apps to make any headway in the market place. It needs to be on a slate type platform to highlight it’s abilities. If this product were marketed properly and HP could get it in before the public, it might catch on. Developers need to be convinced that Web OS is a viable platform and the hardware is capable of delivering on the OS’s power.

Derek Kerton (profile) says:

Re: it's the distribution

I’ve heard this a few times, and disagree vehemently. Although I have been wrong on Palm lately (predicting success and seeing none), my wrongness was the result of TERRIBLE distribution success at Palm.

They currently have way too much stock in the distribution channel, and have historically had terrible logistics, so you probably don’t mean they are good at this.

But if you mean Palm is good at carrier deals, can you back that up with an argument? Tell me how that has been anything less than a disaster for the WebOS phones?

Derek Kerton (profile) says:

Ugh. I called this one wrong last year.

I thought the Pre was great (still do), and thought Palm could make something of it. I have been very disappointed with their terrible lack of carrier deals since announcing the phone in Feb 2009. Seriously…a year goes by and they still only had one carrier?!

I hope HP is buying Palm for their OS development team, not their biz dev team. Because for a handset brand with almost 10 years of history selling phones to carriers, they pulled off 1 deal in 2009, and a couple so far in 2010.

As for HP, there is still room in the market. HP can wedge themselves in through vertical markets and their strong existing enterprise sales relationships.

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