Commentary
4/29/2010
12:17 AM
Ed Hansberry
Ed Hansberry
Commentary

What's Next For Palm Inside Of HP

Today HP announced it was buying Palm. The big question is, now what? Does HP absorb Palm into HP's operations and keep the brand around for a while or does HP let Palm run free and provide financial and marketing support, or is it somewhere in between?



Today HP announced it was buying Palm. The big question is, now what? Does HP absorb Palm into HP's operations and keep the brand around for a while or does HP let Palm run free and provide financial and marketing support, or is it somewhere in between?PreCentral.net, a site dedicated to all things Pre, was on the conference call today where HP announced that "We intend to operate it as a business unit, which is in line with the way we're structured today." This is good news for Palm employees and WebOS fans. HP has made a number of acquisitions over the years but most are integrated into the company.

This could be different though. While HP does make handhelds, they aren't a major player in the market and mobile devices isn't a significant part of HP operations. This means Palm becomes a major segment of HP's business, or a business unit in HP terms.

This is certainly good new for Palm. While some functions like accounting and human resources may be moved to HP's corporate offices, the core of Palm is likely to remain untouched. So device design, operating system development, carrier negotiations, application store management and other parts of Palm could continue to run as they are.

The really big benefit for Palm is they will no longer be public. The magnifying glass will be off of them and while they still have to do their part to contribute to HP's financial results, they will have more freedom to make decisions that have more long term benefits instead of trying to make the next quarter's numbers.

All this assumes the deal goes through. I don't expect much resistance from the FTC on this. I am sure HP has done their due diligence on the company as well. Something really big would have to be unearthed at this point to sour HP on the deal.

The question now is, can HP help turn Palm around? WebOS is not trending the right way now. Will HP+Palm yield better results for WebOS than Palm alone would? Time will tell.

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