Hewlett-Packard's $1.2 billion acquisition of Palm could result in a winning combination but it will require one key ingredient—time, and lots of it.
SAN JOSE, Calif. Hewlett-Packard's $1.2 billion acquisition of Palm could result in a winning combination but it will require one key ingredient—time, and lots of it.
Ostensibly, HP, which generally has been performing well under chief executive Mark Hurd, has the financial stability Palm needs. The handset maker has the innovative smartphone products HP lacks in its otherwise soup-to-nuts portfolio of home and business systems.
Without a cash influx soon, Palm will certainly fade away or die. But cash alone won't make the company's innovative Pre and Pixi smartphones and their core WebOS successful.
The hard reality is that despite its novel features and forward-thinking design, Palm's WebOS is literally the sixth or seventh priority on any developer's list. Unlike its many competitors, it lacks a unique position in the market.
Symbian commands the largest market share in smartphone environments today, but is undergoing a transition under Nokia's new ownership to an open source code base. Apple's iPhone environment has commanding mindshare among consumer developers with its deep and broad App Store.
Google Android is catching up fast. It has support from a broad array of handset makers and designs spreading far beyond cellphones in the hopes this is the unifying variant of Linux the market has been waiting for.
Research in Motion still has a lock on the business phone market with its "Crackberry" environment built around mobile email and now Web access. And don't count out Windows Mobile which has a lock on integration with the PC and server.
By contrast, WebOS has a context-sensitive interface that lets users find information in what it Palm touts as a more user-friendly way. It's an interesting approach but not strong enough on its own to crack the consumer strength of an Apple or Google or the business clout to unseat RIM.
HP is betting it's still early days for the smartphone. Indeed, even Intel and Nokia were willing recently to agree to hit the reset button on their separate Linux efforts to create a merged offering called Meego.
Both efforts will have to seek an opening with new market or technology discontinuities to avoid getting stuck with a sixth or seventh place platform. But such discontinuities are few and far between.
The reality is the season for starting over in smartphones is nearly done. The autumn of consolidation will soon be at hand, and HP has another quarter ahead just getting the deal completed and the new company integrated.
HP's iPaq handsets are virtually off the radar screen in today's smartphone market. The company can definitely save palm, but it's not clear Palm can put HP in the smartphone spotlight anytime soon.