How Bad And Why HP Wanted Palm

It was assumed that when Palm went on the market, it would be a good start in the smartphone business for the company that acquired it. There were a number of interested parties and we now know that HP won the bidding war. Is the smartphone business even on their radar though?HP, Lenovo and three unnamed companies were in a bidding war for Palm, one that HP was triumphant in for $1.2 billion dollars according to VentureBeat. What is interesting is the smartphone business wasn't necessarily the driver for the bidders. Two companies wanted to license patents rather than buy the company outright.

HP's CEO though yesterday disclosed that they weren't really interested in spending money to get into the smartphone business. CEO Mark Hurd said the company won't "spend billions of dollars trying to go into the smartphone business; that doesn't in any way make any sense. We didn't buy Palm to be in the smartphone business. And I tell people that, but it doesn't seem to resonate well. We bought it for the IP."

Palm's IP allows HP to have a "common look and feel" to the myriad of web connected devices they sell.

Of course, Hurd's revelation upset WebOS fans, which largely took yesterday's statement as an end-of-life announcement on Palm smartphones. That prompted the HP public relations engine to get into high gear so as not to upset current customers or disrupt the current revenue flow, as meager as it may be. "We believe webOS can become the backbone for many of HP's small form factor devices, and we expect to expand webOS's footprint beyond just the smartphone market, all while leveraging our financial strength, scale, and global reach to grow in smartphones."

I think the group HP most needs to placate right now are the developers. Without a commitment from HP to spend big bucks on WebOS as a phone platform, developers won't make serious commitments to write great apps. The iPhone has trained consumers to expect dozens, if not hundreds, of new apps daily, and consumers want a platform that has a living breathing application store bubbling over with new programs. You can be sure Apple, Google and Microsoft are going to be spending tons of money on this to keep their platforms alive. If HP is just going to let it idle and keep spending down, they might as well turn out the lights now. The smartphone market isn't something a company can be in half-heartedly. You are either at 100%, or you should get out.