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HP Buys Palm
April 30, 2010 09:53 PM

With smartphones quickly becoming one of the most profitable products, every technology company is trying to come up with the next big mobile device. Palm entered the arena with the Treo at the turn of the 21st century and came back in June 2009 with the heavily marketed Palm Pre. Although it received high praise from websites such as CNET , Engadget, and other popular tech publications, the consumer reception was lackluster at best. Speaking of lackluster receptions, Hewlett Packard, HP, has been struggling for some time now with its own smartphone, the iPAQ.Therefore, HP buying Palm makes a lot of sense. The purchase of Palm for $1.2 billion does not come as surprise to anyone familiar with Palm’s recent struggles. At one time, Palm was at the precipice of technological innovation. The Palm Pilot became synonymous with PDAs and transformed Palm into a technological power house. Palm attempted to strike gold with the Palm Pre, a follow up to their Treo smartphone. However, market shares quickly dropped with the lack of support for the Palm Pre and its webOS. Although the operating system was praised for its multitasking capabilities and notifications system, consumers were not pleased and favored the Android or iPhone operating systems. Palm’s decision to put all of its eggs into the Pre/webOs basket was a gamble, and it was not the success Palm had hoped for.

HP is one of the world’s largest information technology companies in the world. By purchasing Palm, it has poised itself to use its large distribution network to make an HP smartphone truly popular. Even though the iPAQ failed, a company as strong as HP would not simply exit the smartphone arena. Instead, they would reenter with something that could compete. HP’s choice to buyout Palm and assimilate all of Palm’s engineers and designers into their fold allows HP the chance to release something sleek and innovative. Moreover, having Palm team along with HP’s distribution may allow Palm’s critically praised engineers and design team to release a smartphone that will add consumer acclaim along with critical success.

Todd Bradley, executive vice president, Personal Systems Group, HP, stated in a press release that HP hopes to “create a unique HP experience spanning multiple mobile connected devices.” This statement, although common in any press release about a buyout, seems to create many intriguing possibilities. Will HP choose to support webOS, develop it, and make it a part of future HP made smartphones, netbooks, or even the new HP slate? Will HP adopt a different operating system but utilize Palm’s young, creative, market-savvy team to create a product that can cement itself as a valid contender in the smartphone market? With the deal scheduled to close by the end of June, it looks like we might be able to see early concepts of HP’s smartphone design this time next year.

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