HP gets back into smartpone biz with a vengeance. Buys Palm for $1.2 billion

It finally happened! Palm has finally threw in a towel in  it’s desperate struggle, and gave itself up to HP for a cool $1.2 billion.

Last year Palm bet the company on it’s new WebOS smartphone platform. And lost.

So, despite management’s assurances to the contrary,  it became clear recently that Palm has no chance of surviving as independent company. The only question was who will buy it.

Some people were daydreaming that it might be Apple, Nokia or RIM, but there was no chance of that ever happening. What would any of these companies do with WebOS?

The only logical candidates for Palm’s biz were smartphone industry outsiders, eager to get into the game. So the names like Lenovo, Dell and Huawei were banded about, and sounded quite believable. It seems that HTC was also sniffing around, but that deal never made much sense to me.

And somehow, everyone (including me) totally forgot about HP. The biggest PC maker of them all. With demonstrated ambitions to get into mobile world, who was surprisingly quiet about it for the past couple years.

In 2008/2009, as the smartphone market started to take off, every PC maker decided they have to be a player in this game too. After all, mobile phone was truly becoming a computer, and who knows more about how to make and sell computers, then them? After a short and failed love affair with Windows Mobile, most of PC vendors decided, that Android will be the platform of choice to conquer the smartphone world. And so the handsets like Acer Liquid, Dell Aero, Garmin-Asus A50, and Lenovo LePhone started showing up. But with very limited success so far.

Meanwhile, after a short and failed try to revive it’s iPaq line as a Windows Mobile business smartphone, HP seemed to completely ignore the exploding smartphone industry. There were no new phones, no announcements, no leaks, not even a rumor, that HP is looking at smartphones again.

Well, today HP is back in a smartphone biz. With a vengeance. I just hope they do not bungle it again.

The main problem why  Palm failed, was the lack of resources. They knew they’ve had a chance for one more bet, they bet everything on Web OS, and they almost succeeded.  They created a great smartphone platform, generated huge excitement and interest, and then stumbled near the finish line.  And, what would have been just a minor setback for a stronger company, proved fatal to Palm.

Now, as part of HP, instead of survival, Palm can again start focusing on realizing the potential of WebOS. They got one of the coolest mobile  mobile platforms around, (I hope) they’ve still got the software and design teams that made WebOS happen. And now they’ve got the money to invest, market and sell the new handsets, and (again, I hope) they’ve learned a lot on Pre mistakes.

As for HP, they just went from a nobody, to a serious player in the smartphone race. Among the major PC makers, they are now best positioned to mount credible  challenge to incumbent mobile vendors like Nokia, Samsung, RIM, HTC and Apple.

I really hope, that HP doesn’t bungle this major opportunity. If they channel their resources to Palm, but let it stay at least semi-autonomous unit, we might soon see some interesting things happening in smartphone market.

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • James W

    Go HP, with the explosion of Dell announcements last week for Android and WPS7, It's only firtting that HP and Palm combine, HP have the best looking hardware alongside Dell as evident with thier laptop and desktops, top that with an awesome webos user interface and you have a winner.

    I say, it is getting very exciting now.

    All the major non-cellphone makers are now the biz:

    Microsoft/Apple/Google/Dell/HP/MeeGo/Garmin/Asus/Acer/MeeGo (Intel) and next, maybe NVIDIA will implement some of thier genius into some hardware.

    I just wish sony would make a PS3/4 smartphone, the awesome power of the PS3/4 into mobile form is stil 6 years away from being realised but there is so much potential for Sony to go it alone without Ericsson for just one handset, that being the Playstaion PSP phone.

  • http://www.staska.net Staska

    Exciting? Yes. Promising? Yes.

    And I'd leave Meego out of it, they have Nokia making Meego their own.

    Palm/HP is promising. But nothing more, so far.

    Both are complete failures in mobile biz. Will they be able to make
    something out of it? Maybe. I hope so.

    But mobile biz is no PC biz. There are some overlaps. But the differences
    are much more important. And, so far, only one outsider was able to make
    something of it – Apple.

    Google, they have a chance, but it's still an open thing. Behind all that
    hyped growth, from uber low base, they have only Motorola and HTC firmly
    behind (from those that matter). Maybe that's enough, but only maybe so
    far.