Palm And HP Now One Company - InformationWeek
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7/1/2010
11:35 AM
Eric Zeman
Eric Zeman
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Palm And HP Now One Company

Today HP officially closed its acquisition of Palm, for which it paid $1.2 billion. The new company promises "an amazing roadmap of new tools."

Palm is calling today Day 1. It's the first day Palm has become an official part of HP. HP announced its intent to purchase Palm back in late April. Despite some shareholder unrest, the acquisition was eventually given the green light by the shareholders and appropriate governmental bodies. What does this really mean for Palm, webOS, and its smartphones?

Well, they will all survive for a while longer, at the very least. Things were looking dire for Palm in February and March, when it became clear that Palm's webOS-based smartphones weren't selling in significant enough numbers. The company announced that it was for sale and HP eventually won Palm's hand (pun intended). If Palm had been left to fend for itself, it is possible the company could have gone under by the end of the year. I am glad that won't happen.

Both HP and Palm are clearly excited about the future. In a blog post, Palm said, "It's our first day together, but it's already abundantly clear to everyone who’s been involved in bringing the two companies together that great things are in store. The combination of Palm's trailblazing webOS and HP's strength as the leading provider of everything from PCs, laptops, and printers to home electronics and enterprise systems promises an amazing roadmap of new tools for your mobile and web-connected future. We've got a few ideas about what that future will look like, and we'll share details as soon as we can."

HP has made Windows Mobile smartphones for nearly a decade. Before that, it was making Microsoft's Pocket PC PDAs. HP has experience with handheld products, though none were ever stellar sellers. Palm's webOS is truly a great operating system. Palm's problem has been weak sales of the Pre, Pre Plus, Pixi and Pixi Plus smartpones. Why aren't they selling?

The hardware just isn't up to snuff, for one. Other manufacturers are making more capable and better designed hardware. The other problem has been a lack of developer support for webOS (despite the platform's strengths). I trust that HP can solve the hardware issue in short order. I am not so convinced that the combined companies can spur developer interest (vital for applications). Perhaps the new life HP is breathing into Palm will be enough, but we won't know that for a while.

Palm's former CEO Jon Rubinstein said of the acquisition, "With HP's full backing and global strengths, I'm confident that webOS will be able to reach its full potential. This agreement will accelerate the development of this incredible platform with new resources, scale and support from a world-respected brand."

I hope he's right. I really do.

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