HP buys Palm – First Take

In what’s already become a pivotal and transformative year, HP announced they were buying Palm for 1.2 billion dollars. At a time when the mobile platform market has become very crowded, this is an important event that now puts HP/Palm as a major player in the mobile market. HP is no stranger to mobility, the iPaq was a defining mobile product a decade ago but over the years HP has been unable to replicate their success in the PDA market with similar efforts as the dynamic shifted to smartphones. Here’s what the HP/Palm deal means.

First, Palm has found a good home. In addition to Todd Bradley, there are lots of Palm alumni in the PSG group at HP. This means that there should be a relatively smooth transition and overall good cultural fit. HP is now a force to be reckoned with in the mobile space.

Second, WebOS should now be viewed as a serious contender in the mobile platform wars. While critically acclaimed, Palm simply did not have the resources needed to effectively compete with players such as Apple, Google and Microsoft with deep pockets and the resources to sustain themselves in the market. The combination of Palm technology and brand combined with HP resources and channel partners will be a strong combination for HP to drive their mobile efforts forward.

Third, the nature of this deal underscores the velocity of mobile and how that speed is affecting long term winners and losers. Many had written off Palm’s relevance in the market and depending on where Palm ended up, that could have been correct. Expect the rate and pace of innovation, product launches, alliances and lawsuits to pick up even more speed as platform providers attempt to gain ground on their competitors and survive longer term consolidation and shake outs.

HP challenge short term is to survive the market velocity. There will be precious little time to integrate Palm into HP offerings, create an effective marketing message and focus on customer and developer evangelism. Creating close ties to other HP services for both business and consumer will be critical short term to create a story that can resonate across the board to HP customers and partners.

3 responses to “HP buys Palm – First Take

  1. The old Phillip Morris/Altria trick… get the name PALM out of the consumer’s mind, replace it with a new one, or a tried and true one, like HP.

  2. As a webOS user I am thrilled about this announcement. I didn’t have much hope for Palm these last couple of weeks, so it is even more of a surprise that HP snagged them. Honestly, I could not have named a better savior if you had asked me. Great news for a mobile os that is so excellent that it deserves market success.

  3. DHS–HP will be running Palm as an “independent business unit”–so they’ll maintain the Palm name and give Palm some independence rather than totally assimilate it. Maybe similar to how Cisco did with Linksys.

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