Thoughts on HP buying Palm

I was so shocked buy Hewlett-Packard buying Palm this week that I had to take a few to days to gather my reactions. Here's what we know:

• Purchase Price - Hewlett-Packard will be purchasing Palm for $5.70 a share or 1.2 billion dollars.
• HP Loves Palm WebOS - HP has said that they intend to invest heavily in to the OS
• Palm should stay relatively unchanged - HP has said that it will create it's own business unit for Palm, so the structure may go relatively unchanged.

In my view, this was possibly the best thing that could have happened to Palm. HP's 121.87 billion market capitalization is certainly less than Google's 167 billion, Microsoft's 267 billion, and Apple's 237 billion (as of now), but it's at the same scale where one can see HP playing with the big boys. It's also a good deal ahead of RIM's (Blackberry) 39 billion.

Let's look at the competitors again in comparison to Palm:

Apple vs. HP-Palm

Apple is certainly the leader with it's iPhone, iPod, and iPad group of mobile devices.

• iPhone vs. WebOS - I covered many reason why Palm Pixi is better than iPhone previously. It was a bit of stretch and overall there's little doubt that the Apple iPhone is the better phone. However, that gap could narrow quickly. A Palm Pre 2 on Sprint's upcoming 4G network would certainly do a lot to the change the game. Other new hardware would really push the envelope their.
• iPad vs. WebOS Tablet - It's hard to see how this may play out until we see what the WebOS tablet is going to be. HP has hinted very strongly that it plans to use WebOS for its upcoming tablets. Because WebOS won't have the same entrenched application store, I would expect it to come with all the bells and whistles that Apple leaves off like a camera for video conferencing. We do know that when the WebOS Tablet comes to market it will have great multitasking and very likely Flash support.
• iPod vs. WebOS PDA - Let's face it, the iPod Touch is essentially a PDA, not an MP3 player at this point. It's a great PDA with an app store and music store behind it. A WebOS version of the iPod doesn't look to be in the works. I don't think this is going to hurt WebOS much in the long run... I imagine that most people will move away from PDAs towards smartphones.

Android vs. HP-Palm

I think that Android, long-term, is probably the strongest of the smartphone platforms. It's hard for other smartphone OSes to compete with the price of free. It's even harder when Google can leverage all its applications (Gmail, Maps, Voice, Docs, etc.) for it's advantage. However, there are a couple of chinks in Android's armor. First, HTC is paying Microsoft royalties. Second, Android has to deal with the problem of supporting a lot of different hardware.

Microsoft vs. HP-Palm

Microsoft is coming to the game more than a year late. I realize that they have a lot of money and a lot of influence - but they have no app store (Palm's biggest problem). In general there are far too many questions to ask - until we have answers I think that Microsoft doesn't have the advantage.

Blackberry vs. HP-Palm

RIM's Blackberry has recently "entered to the game" with their OS being where Palm's was 3 years ago. I heard that the new OS is very good, but we'll see how that works. In the meantime they need to show what they can do.

Final Thoughts

In the end, I think we can expect that HP-Palm's WebOS will grow greatly. It now has the finances of HP and the flexibility to run on CDMA as well as GSM networks (GSM should be coming via AT&T in a week). The tight interlinking of hardware and software will allow a complete end-to-end experience for the consumer.

This post involves:

Apple, hp, palm, tablet

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News

Posted by brian on May 2, 2010 in News. You can skip to the end and leave a response. Pinging is currently not allowed.