HP Buys Palm for $1.2 Billion. Yes, Seriously.

[Jason Dunn]

<div class='os_post_top_link'><a href='http://www.engadget.com/2010/04/28/hp-buys-palm/' target='_blank'>http://www.engadget.com/2010/04/28/hp-buys-palm/</a><br /><br /></div><p><em>"HP and Palm, Inc. today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors."</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/wpt/auto/1272488890.usr1.jpg" style="border: 0;" /></p><p>Of all the companies I was thinking about buying Palm, HP wasn't very high on the list - but now that I think about it, it makes quite a bit of sense. Palm has a lot of expertise in mobile devices, and by all accounts, their new generation of WebOS devices are pretty good. HP on the other hand has deep pockets and really struggled in the mobile space since PDAs became phones; they're never managed to have a very successful mobile device. They need people will skills and vision in the mobile phone space, something they've lacked for many years now. I wonder what this means for Windows phone 7? HP was a launch partner, and I was expecting them to release a Windows phone 7 device...I kind of doubt that will happen now. So, what are your thoughts on this? <a href="http://www.engadget.com/2010/04/28/hp-buys-palm-the-liveblog/" target="_blank">Engadget has a liveblog</a> of the conference call as well.</p>

[Janak Parekh]

I hate to be a skeptic, but I personally think HP will drive this into the ground even faster, as they did to their Jornada and Compaq's iPaq (née iPAQ) lines.

--janak

[Inventor]

>Jason Dunn
>Executive Editor

>Absolutely - it's not too late for HP to become relevant. The question though, is do they want to be?

I did some checking around the internet. Palm has a long list of carrier relationships and that’s a large part of the reason for the sale. HP is getting serious about mobile phones.

[Don Tolson]

I suspect Jason's right, that HP wanted to 'buy' knowledge and experience in the phone space, plus maybe some carrier contacts.

I think the WebOS is dead in the water. It's been superceded by the iPhone and even HTC's Sense overlay. HP will use the contacts and knowledge to rebuild their existing iPaq line into something smarter, more 'hep' and probably with the WP7 O/S on it.

[ptyork]

First, I'm giddy happy about this because webOS is truly awesome and I'm REALLY glad it isn't going to die. It just needs some marketing and some better hardware. Now...

...here's my take on the actual deal. First, I think that HP sees everyone except RIM completely abandoning the enterprise market. WP7, iPhone, Android...all consumer-focused. HP is in just about every enterprise in the world. HP says, hmm, there might be some synergy there if we beef up the platform's enterprise features a bit and take over the #2 enterprise OS behind BB (from WM, of course).

Second, they want to play in the tablet space, but again be able to focus on enterprises and healthcare. Having full control over an OS (to say, add digitizer support and handwriting recognition) to something that isn't NEARLY as heavy as Windows 7 is very appealing.

I think it is a really smart play for HP. Yeah, maybe they'll lose interest as they did with the iPaq, but I really don't think so. I see this as them finally deciding to be a player in the fully-integrated mobile market. I really think this is a major deal, and a really good thing for the market.

[ptyork]

I think the WebOS is dead in the water. It's been superceded by the iPhone and even HTC's Sense overlay. HP will use the contacts and knowledge to rebuild their existing iPaq line into something smarter, more 'hep' and probably with the WP7 O/S on it.

I don't normally attack here and I'd love to say "maybe you're right" even, but you are just wrong. Sorry. Wow. That's just plain nonsense.

[Skoobouy]

Hi! I haven't posted to these forums in close to seven years.

But... wow. Remember Palm vs. Pocket PC?

In 2000, iPaq + PPC vs Palm + PalmOS.

In 2005, Palm Treos started running WinMo.

In 2010, HP devices will start running Palm's WebOS.

We have now come full circle.

[whydidnt]

I hate to be a skeptic, but I personally think HP will drive this into the ground even faster, as they did to their Jornada and Compaq's iPaq (née iPAQ) lines.

--janak
I was going to post something very similar, but you beat me to it!

HP took over the iPaq line and from Compaq and completely ignored it. Since then, we've seen only half-hearted attempts to get into the smart phone space. Having said this, Todd Bradley, who heads up the HP mobile group or whatever they call it, is the same Todd Bradley that used to run Palm. He may have some desire to try and rebuild the empire, and HP has the deep pockets to do so.

However if recent history is any indicator, those of you owning a Pre or Pixi can kiss hope of any future upgrades goodbye! HP has shown no inclination to upgrade any of it's recent mobile devices beyond the shipping OS and a few small bug fixes.

[Craig Horlacher]

I think this is great! I'm glad a company with some resources bought them. I think WebOS is excellent and could have done great with better marketing and a little more strength behind it. I think the competition will be a good thing.

I think it would be funny if in the end the iPhone and WinMobile/phone would die off because of their closed and restricted natures and WebOS and Android would be the only ones left standing.

Sure, it will take a while for the iPhone to go away. Microsoft on the other hand is going to have a really hard time finding more people, besides those who are already in love with their iPhones, willing to buy such a restricted and limited device. Many current WinMo users are so because it was not very limited or restricted and therefor are not even candidates for WinPhone.

I'm really glad WebOS will probably not die off now and I look forward to seeing more devices that use it and even newer versions of it!

Maybe WebOS Thoughts should be on your list along with Android Thoughts:)

[felixdd]

The problem with HP, IMHO, isn't the software part. It's the hardware. The Ipaq was only good when they were still contracting from HTC. After that relationship dissolved, their devices were rote and uninspired.

Palm's strength is not hardware either, although on that front they are decent. But only just.

I don't see how buying Palm will be a good fit to help with HP's weakness, as I see it anyways.

[doogald]

This surely cannot hurt Palm. At least HP has the resources to push the platform, come out with more than two handsets per year. HP now has an OS of their own, and can put out phones without licensing fees to Microsoft. They also get a patent portfolio that cannot hurt.

The big questions is, having decided to spend the billion plus, are they willing to spend more? Will they come out with better hardware? Will they adequately fund a non-creepy marketing campaign? Will they be able to strong-arm a company like Verizon Wireless to actually try to sell these devices rather than push them into the virtual corner of the store?

[Fritzly]

I think they will use the WebOS for the Slate PC they announced at CES.

[Perry Reed]

I'm writing this as a former long-time HP employee, an even longer time HP customer, and a Palm Pre owner. In fact, I'm writing this on my HP tx2 tablet PC, tethered to my Palm Pre for Internet access...

I think this is a fantastic deal for Palm, which was running out of options, and a good deal for HP. I expect that HP will remain a Microsoft partner and will indeed release a Windows 7 Phone device, or more than one, as planned. But they will also release devices on webOS, including phones and larger devices. I'm certain that webOS will be an option on the upcoming HP Slate, for example.

Much like Windows 7 Phone, webOS would make for a very good experience on larger screens, like slates and tablets, and I expect that HP has recognized that. They are large enough to also remain a vendor of Microsoft-based devices, but I think they know that they've been eclipsed by HTC and others on the Windows Mobile side and they clearly see how well Apple has done and what Google is doing.

HP obviously wants to have their own integrated solution, with hardware and software closely tied together, to compete with the others.

I was a Windows Mobile customer and fan for many, many years, and I like my Palm Pre now very well. I had been planning on moving to the Windows Phone 7 platform around the end of the year, fully expecting Palm to either cease to exist, or to have a small enough market share not to really matter any more. With this deal, I may have to rethink my plans and may very well have a tough choice to make between WP7 and webOS.

[Janak Parekh]

I'm certain that webOS will be an option on the upcoming HP Slate, for example. When is the Slate supposed to be released? Adapting a very mobile screen-oriented OS, like webOS, to slates is certainly possible but nowhere near trivial. It looks like a significant amount of work. webOS is even more geared for small screens than iPhone OS is, given its "hidden screen area", the card metaphor, etc. I'd guess it'll take a year, much like the iPad running iPhone OS 3 took about a year. That said, I agree that webOS could be a great full-screen touch experience.

HP obviously wants to have their own integrated solution, with hardware and software closely tied together, to compete with the others. Now this I don't understand. Where is the integration here? webOS is a web-driven platform. None of HP's desktop platforms are; they're all Windows-driven.

--janak

[Janak Parekh]

When is the Slate supposed to be released? Um, looks like we have an answer: the HP Slate project has been canned (http://techcrunch.com/2010/04/29/hewlett-packard-to-kill-windows-7-tablet-project/).

In favor of a future webOS project? Who knows. But, interestingly, it looks like Microsoft's slate efforts have taken a huge beating in the past few days. Ballmer highly touted this device only a few months ago at CES.

--janak

[Perry Reed]

Now this I don't understand. Where is the integration here? webOS is a web-driven platform. None of HP's desktop platforms are; they're all Windows-driven.
--janak

Depends on what you mean by web-driven. Yes, the primary method for development uses web technologies, but the SDK has been opened up to allow deeper integration with the device.

The integration I'm talking about is having the OS and the hardware being built by the same vendor. Like Apple does and, well, Palm, but not Microsoft. HP wants to own the hardware and the software running on it. WP7 won't give them that, but owning webOS will.

Here's one possible catch: webOS is FAR from being enterprise capable. It's not even close. HP of course is easily as much an enterprise vendor as they are a consumer one. Clearly, webOS as it currently exists is not going to help them at all in the enterprise, and would require a great deal of work to get it into a position where it would. That's one reason, I expect that HP will continue working with Microsoft and others and retain their existing platforms.

[ptyork]

When is the Slate supposed to be released? Adapting a very mobile screen-oriented OS, like webOS, to slates is certainly possible but nowhere near trivial. It looks like a significant amount of work. webOS is even more geared for small screens than iPhone OS is, given its "hidden screen area", the card metaphor, etc. I'd guess it'll take a year, much like the iPad running iPhone OS 3 took about a year. That said, I agree that webOS could be a great full-screen touch experience.

Actually, webOS is the only mobile OS that is designed from the ground up to work at multiple resolutions without much developer intervention. After all, the pixi and pre have different screen resolutions and developers need do nothing to have their apps work on either (at least until you move to the PDK for 3D games and such which do require direct, pixel-level addressing--though this is often abstracted by the development toolkit).

That said, I think it will take a little effort (both from Palm/HP and developers) to scale to a slate size, lest you run into the problem the iPad has with scaled iPhone apps (i.e., they look crazy stupid). BUT, it will be mostly trivial since it uses HTML to lay out the pages, which is obviously designed for multiple resolutions.

As an aside, WP7's silverlight (basically WPF) also is designed to support this, but MS is being even less flexible in allowing multiple resolutions, so I'm afraid most developers will get lazy and design for a single resolution. Thus, scaling will be a much more intensive effort.

Now this I don't understand. Where is the integration here? webOS is a web-driven platform. None of HP's desktop platforms are; they're all Windows-driven.

There's a common misconception that webOS is web-driven. It uses HTML/Javascript (C++ for the PDK) for a programming model, but it is most certainly not just web-driven (ala first gen iPhone OS "apps"). Underlying the "web" front end is a very robust OS. Go play with the Ares development environment (itself a remarkable bit of technology) and see for yourself. It is NOT web-driven, at least in the way most folks think.

The point is that HP will control all aspects of the OS so that they can build in the integration points as it sees fit. Want to add a wireless HP printer driver? No problem. Want to build in a backup conduit to the mediasmart server? Again, no problem. Feel the need to expand media sync capabilities or add DLNA as a core component so your new line of media center pc's can stream the photos and videos straight from the phone/tablet? Well, you get the point. They have full access to all aspects of the OS, not just what the OS provider offers. And since the trend seems to be to offer less and less low-level access to third party developers (think WP7 with no skinning and really no access to the device except through sandboxed silverlight apps), this is critical.

[ptyork]

Here's one possible catch: webOS is FAR from being enterprise capable. It's not even close. HP of course is easily as much an enterprise vendor as they are a consumer one. Clearly, webOS as it currently exists is not going to help them at all in the enterprise, and would require a great deal of work to get it into a position where it would. That's one reason, I expect that HP will continue working with Microsoft and others and retain their existing platforms.

I agree, in the short term at least. But WP7 is NOT an enterprise solution. It is further away even than webOS. I think that this will be one of the first thing HP addresses. What is really required? Encryption of the file system (easy since there's very little in the way of a true file system). Remote provisioning and wipe (an effort, but not major). Lockdown/removal of camera--easily accomplished. EAS support (it's in there). Control over app installation and custom app distribution (again, pretty much in there). I'm sure there are some things I'm missing. And of course there's all kinds of testing and certification needed if they want to get into the government.

But I don't think we're talking years. Maybe 6-12 months for a good enterprise solution and maybe an additional year to get into the government.

Personally, I think this is one of the main reasons that HP bought webOS--so that they could adapt webOS for distribution to their corporate / government customers.

MY worry actually is that they'll focus too much on these features and neglect some of the more consumer-focused R&D.

[Janak Parekh]

Actually, webOS is the only mobile OS that is designed from the ground up to work at multiple resolutions without much developer intervention. After all, the pixi and pre have different screen resolutions and developers need do nothing to have their apps work on either (at least until you move to the PDK for 3D games and such which do require direct, pixel-level addressing--though this is often abstracted by the development toolkit). Right, but resolution independence is only part of the equation. Just because a set of UI controls works well at one physical screen size doesn't mean they'll work well with others. That's the redesign I'm thinking of. Would flicking cards scaled linearly up be a good experience? Or a much much bigger hidden area, where the back swipe would be three times the size?

There's a common misconception that webOS is web-driven. Actually, I was not referring to the programming model; I'm fully aware of that. :) What I was referring to was the fact it syncs against the web, not with desktops, not with flash devices. Palm designed the webOS platform to work in the cloud. Now while it is possible HP can link it to their printers and cameras and Bluetooth solutions, it seems kind of peripheral to me. I accept the argument of "integrated strategy" as mobile hardware coupled with mobile software, and I think HP can do a good job with that. DLNA and whatnot to tie content in, yes, I suppose I could see that. But tying into their desktop/enterprise solutions... not so much in the current iteration. That said, it's certainly not impossible, but they've got quite the work cut out for them. ;)

--janak

[ptyork]

Right, but resolution independence is only part of the equation. Just because a set of UI controls works well at one physical screen size doesn't mean they'll work well with others. That's the redesign I'm thinking of. Would flicking cards scaled linearly up be a good experience? Or a much much bigger hidden area, where the back swipe would be three times the size?

Well, that's true. There's a little to be worked out there. A gesture area would probably not really work well on a tablet (kind of like the single stupid little button on the bottom/left of a freaking iPad). But I certainly don't see that as being all that challenging. Off the top of my head, two finger left swipe anywhere for back...two finger up or down swipe for card view...second two finger up or down swipe for card toss. Just takes a little HCI study to see what works naturally. But I do think that most of the GUI metaphors work just fine scaled up. Great in fact.

Palm designed the webOS platform to work in the cloud. Now while it is possible HP can link it to their printers and cameras and Bluetooth solutions, it seems kind of peripheral to me. I accept the argument of "integrated strategy" as mobile hardware coupled with mobile software, and I think HP can do a good job with that. DLNA and whatnot to tie content in, yes, I suppose I could see that. But tying into their desktop/enterprise solutions... not so much in the current iteration. That said, it's certainly not impossible, but they've got quite the work cut out for them. ;)

I guess I think Palm's "any cloud" strategy is a major benefit here. Certainly over Apple's "Mobile Me or the highway" strategy. They don't tie the OS into any one provider. Creating enterprise / government / HP providers should be very doable. And again, easy to integrate into even the core apps without a major rewrite.

They know they've got some work to do. Thus the whole "doubling down" sound bite that everyone's throwing about. But I don't think it is as challenging as you think. The hard part is getting a good mobile OS core created and that's done. Adding butter to your bread (yeah, I'm just throwing in a wholly disconnected Metaphor)--especially if they don't have to craft a knife (i.e., the existing bevy of Palm developers--oy with the metaphor)--isn't nearly as difficult.

[Perry Reed]

Actually, I was not referring to the programming model; I'm fully aware of that. :) What I was referring to was the fact it syncs against the web, not with desktops, not with flash devices. Palm designed the webOS platform to work in the cloud. Now while it is possible HP can link it to their printers and cameras and Bluetooth solutions, it seems kind of peripheral to me. I accept the argument of "integrated strategy" as mobile hardware coupled with mobile software, and I think HP can do a good job with that. DLNA and whatnot to tie content in, yes, I suppose I could see that. But tying into their desktop/enterprise solutions... not so much in the current iteration. That said, it's certainly not impossible, but they've got quite the work cut out for them. ;)

--janak

Personally, I think desktop syncing has gone (and deserves to go) the way of the dinosaurs! If I never ever plug my phone into my PC to sync it again, I'll be very happy. That the Palm syncs to the cloud is a very good thing, in my view. My PC also syncs to the cloud (ALL of my PCs do that), so my data is sync'd quite nicely!

In fact, many of HPs enterprise tools are also web-based (I use many of the former Mercury tools daily), so HP seems well poised to make a play there, too.

[Janak Parekh]

I guess I think Palm's "any cloud" strategy is a major benefit here. Certainly over Apple's "Mobile Me or the highway" strategy. ... except iPhone has good, and steadily improving, EAS support as well as other enterprise requirements (with OS 4 adding yet more).

They know they've got some work to do. Thus the whole "doubling down" sound bite that everyone's throwing about. But I don't think it is as challenging as you think. The hard part is getting a good mobile OS core created and that's done. Adding butter to your bread (yeah, I'm just throwing in a wholly disconnected Metaphor)--especially if they don't have to craft a knife (i.e., the existing bevy of Palm developers--oy with the metaphor)--isn't nearly as difficult. As long as HP's past mobile culture doesn't permeate, yes, you're right. Consider me skeptical, having seen them drive two mobile lines into the ground. Yes, I know it was Microsoft's OS, but I for one don't see this happening in the right way. I hope I'm wrong.

--janak

[Perry Reed]

I agree, in the short term at least. But WP7 is NOT an enterprise solution. It is further away even than webOS. I think that this will be one of the first thing HP addresses. What is really required? Encryption of the file system (easy since there's very little in the way of a true file system). Remote provisioning and wipe (an effort, but not major). Lockdown/removal of camera--easily accomplished. EAS support (it's in there). Control over app installation and custom app distribution (again, pretty much in there). I'm sure there are some things I'm missing. And of course there's all kinds of testing and certification needed if they want to get into the government.

But I don't think we're talking years. Maybe 6-12 months for a good enterprise solution and maybe an additional year to get into the government.

Personally, I think this is one of the main reasons that HP bought webOS--so that they could adapt webOS for distribution to their corporate / government customers.

MY worry actually is that they'll focus too much on these features and neglect some of the more consumer-focused R&D.

I hope you're right about the 6-12 months and I think you've covered most of what they'd need to do to make webOS entrprise-ready. There are a few other minor things, like improvements to the calendar and task handling, but those could be easily done.

I do agree that we're likely to see webOS in many more markets and configurations and on more devices than we've seen, thanks to this deal.

[Don Tolson]

I agree, in the short term at least. But WP7 is NOT an enterprise solution. It is further away even than webOS.

I think you may be short-changing WP7 a bit here. A lot of what you mention as EAS support to be developed in WebOS is already in WP7. There have been a lot more demonstrations of WP7's capabilities and discussions with MS people over the last couple of weeks making it look a lot more ready than it did before. I think MS is also aware that the next devices MUST address corporate employees as being people, too and providing a device which meets both their corporate and personal needs and can keep the two separate.

To quote Gizmodo..."http://gizmodo.com/5526620/why-hp-buying-palm-is-good-for-you?skyline=true&s=i"Why, though, not just stick with Windows Phone 7, or Android? Palm's webOS might be a robust platform, but it's lacking a robust developer community—its 2,000 apps pale in comparison to what the Apple App Store and Android Market offer (http://gizmodo.com/5494875/android-marketplace-hits-30000-apps-still-has-serious-catching-up-to-do). The answer is that HP's hedging: they'll continue to work with other platforms, while hoping that their scale will help ramp-up dev interest in broadening the webOS ecosystem.
Worst Case Scenario

The real challenge might come in reconciling the brand personalities. Palm's products, regardless of how well they've sold, have always been innovative—the Pre was a breath of fresh air (http://gizmodo.com/5277499/palm-pre-review) when it was released. HP, on the other hand, has tended to paint in broad beige strokes. And their products that do stand out, like the Envy laptop (http://gizmodo.com/5370592/hp-envy-13-review-the-macbook-imitated-not-duplicated), have come across as derivative. There's also the unfortunate case of iPaq—another HP acquisition that was left to rot."

[ptyork]

Actually, they're far closer with the Enterprise-ready part than I'd thought initially.

http://www.palm.com/us/assets/pdfs/business/Palm_WhitePaper_Security.pdf

Janak, yes, the iPhone offers EAS as a potential second "cloud" for some stuff. But it is nowhere near as well integrated into the core apps as it could be (maybe 4.0 is better). Plus, it sucks. I had to basically turn it off and switch back to IMAP for email because it was so unreliable. Admittedly, this could be Gmail's EAS and not Apple's fault...

You do know that webOS offers first class EAS support, too, right? From day 1 (or at least day 2). Mail, Contacts, Calendar AND Tasks as well as GAL support. How Apple decided not to include tasks on the iPhone, I will never understand. I assume Steve just decided he didn't use task management tools so nobody else should either. And the lack of a week view...the most widely used calendar view?!? But I digress. :)

[Kevin Daly]

What will happen now needs to be looked at in the light of what *would* and *wouldn't* have happened if this acquisition hadn't taken place.

Does anyone see any likelihood of HP with their Enterprise fixation having produced a compelling Windows Phone 7 device and marketing it effectively?
I don't think HP were ever going to be an effective player in the WP7 space, so their loss as a partner shouldn't spook anyone.

The new unGodly HP-Palm hybrid may or may not produce some interesting hardware, but for the next year or so at least the competition is going to be iPhone and Android.

PS. I say this as the proud owner of a Jornada 545.
So much potential, so few clues.

[epdm2be]

I hate to be a skeptic, but I personally think HP will drive this into the ground even faster, as they did to their Jornada and Compaq's iPaq (née iPAQ) lines.

--janak

funny how some of us think alike ;-)