36 Comments

Summary:

After trying to reinvent itself with webOS, Palm is reportedly up for sale and could announce a deal later this week. Among those reportedly interested is HTC, which could go from a behind-the-scenes player to a true smartphone contender with such a purchase.

Palm is reportedly seeking a buyer, and among the top potential suitors being named are HTC and Lenovo. Taiwan’s HTC would be the logical choice, as Palm’s innovative and intuitive webOS platform would make the handset maker a key player in the worldwide smartphone market, lifting it from its current role as supporting cast member.

HTC may not be a household name outside of Asia, yet it manufacturers 6 percent of all smartphones sold around the world. A longtime Microsoft partner for Windows Mobile devices — it built the first smartphones for Redmond’s platform — HTC also designed and builds Google’s Nexus One handset, which is arguably the best Android device available in terms of specifications. Other HTC handsets running Android include the original G1, MyTouch 3G, Droid Eris and Hero. With so much reliance upon HTC — Flurry says 61 percent of all Android phones sold are made by HTC — a sale of Palm could mean Google would have to find a new hardware partner as HTC would likely leverage Palm’s operating system for its own brand of handsets.

But hardware isn’t HTC’s only area of expertise. The visually appealing HTC Sense user interface, which was rolled out a few years ago, is a popular software shell atop Windows Mobile whose widgets and menus make the phones easier to use. Unfortunately for HTC, there isn’t room for such software in Microsoft’s future. With its Windows Phone 7 platform due out before year-end, Microsoft is placing more hardware and software controls in place, which could leave custom interface designers like HTC out in the cold. By purchasing Palm, HTC would immediately vault itself to a Microsoft competitor.

Indeed, buying Palm would mean HTC would stand alone for the first time ever as a viable smartphone company, one with hardware expertise, prior relationships with nearly every carrier worldwide and a new software platform to call its very own. It makes perfect “sense” for HTC to make a play for Palm.

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  1. I keep hearing HTC mentioned as a possible buyer for Palm.

    My take is that if HTC buys Palm it is ‘betting the company’ with a new go it alone strategy.

    Buying Palm makes sense if 1) HTC just wants IP (patents, software, etc.) and talent or 2) HTC wants to make and sell HTC phones with their own OS (like RIM & Apple) and stop being a contract manufacturer – I don’t think HTC can really do both since competing with your clients usually doesn’t work out so well.

    If HTC goes all-in and decides to go head-to-head with Apple, RIM, Nokia, Android, etc., it is by no means a sure thing that they will do well. Does HTC have the chops to negotiate with carries, do great marketing, strategic planning, etc.?

    It sure would be interesting.

    1. All good points as HTC has only proven itself as a solid partner, not truly as an full service vendor.

    2. Does HTC have the chops to negotiate with carries, do great marketing, strategic planning

      HTC has a great relationship with a lot of carriers haveing oem’ed so many smart phones for them. Their ads which only debuted last year or so had a decent response and as for strategic planning… does that mean anything in the mobile space of today ?

    3. Actually HTC would be considered a customer of microsoft and android is open source and samsung is developing it’s own OS too

  2. This would be a dream come true for WebOS lovers like me.
    I have 160 employees and I would not think twice about getting a HTC like the EVO running WEBOS for all my 160 employees.

    It is a match made in heaven!!

    Rod

  3. Dean Collins Monday, April 12, 2010

    lenovo buying pal, sure.

    htc buyign palm? thats crazy talk, not going to happen in a million years.

    your reasoning is whack.

    1. Perhaps, but what’s your reasoning? ;)

      1. I would agree. The problem is that Palm is complete, stand-alone mobile products company. That makes them really only fit to “plug-in” to a company that hasn’t already invested/entered into this market.

        As far as I can tell, Lenovo lacks a fully developed and mature mobile division (notwithstanding the few random Chinese phones). An acquisition by Lenovo would mean that Palm gets to remain relatively intact, and can benefit from Lenovo designers/engineering without disrupting things too much at either Lenovo or Palm.

        HTC though — they’ve been at this game for years. Prior to Palm’s recent poor quarter results and recent announcement that it is seeking a buyer, it had to have had proper 2, 5, 10 year plans that mapped out its corporate strategy–plans that did not include Palm or WebOS. Plans that ostensibly included development paths for Android and Windows Mobile.

        It seems it would be jarring to integrate the two companies, putting hardware and software developers that have previously spend the past several years perfecting Android development and giving them something brand new to work with. Either way, it seems like the time spent trying to integrate and deal with the acquisition of WebOS means that it will suffer in development and fall by the wayside. The alternative strategy seems unlikely too — maintaining Palm as an independent company in direct competition with its now parent.

  4. Granted HTC makes some decent hardware and have been an ODM for Palm in the past, the last thing I want to see on top of the beautiful webOS is SenseUI. SenseUI made sense for android and WinMo due to the lack of polish, but webOS is elegant and a joy to use.

    1. Kevin C. Tofel Lewie Monday, April 12, 2010

      Lewie, I love what webOS offers as well, so I hear you. But there’s room for improvement in every product. Perhaps HTC simply tweaks the UI or addresses some remaining gaps instead simply throwing Sense on the device.

    2. You can turn off Sense on both WinMo and Android phones. You’d be left with HTC’s hardware, which would still be worth it.

  5. Michael Wolf Monday, April 12, 2010

    @Kevin – I’m not sure an Palm acquisition makes HTC a partner-non-grata with Google/Android. I think since HTC clearly is a good hardware partner and has already been laying it’s own software UI on top of devices it ships, it could easily push out devices w/its own OS. And, perhaps more importantly, if HTC owns all the Palm patents that Google would likely want to rely on in an Apple patent fight, Google may need an HTC/Palm partner.

    1. Very true, Mike. I was thinking along the lines of Google’s perspective. If you were them, would you want your primary handset maker offering it’s own handset with a competing platform? I wouldn’t, but that’s just me. Google may be flexible enough — and want some allies in the patent areas that you point out — to be OK with it. Long term though, I don’t see it.

  6. Art Imitates Life » Found Elsewhere » GigaOm: Buying Palm Would Thrust HTC Into the Smartphone Spotlight Monday, April 12, 2010

    [...] iffy, they are reportedly looking for a buyer. Kevin posits this thought: What if HTC bought Palm? He makes some good points about why this would be a good move for all involved, although I’m not sure if Android and [...]

  7. Sanjay Maharaj Monday, April 12, 2010

    I am not sure if this will be the right move for HTC. Palm has been struggling for a long time and for HTC to go into the smartphone market and compete with the leaders, they will need to pour more dollars in what is already a money loosing venture. I can see HTC buying Palm for it’s patents and related technology but to compete in the now crowded smartphone market, is an uphill battle.

  8. kevin,
    HTC making an offer for PALM makes sense. They need OS , and patents. OTOH what do you think of Sony ? Folks are forgetting Sony. The 50K plus iPhone gaming apps can be ported to WebOS with relative ease. Sony can use Palm for new phones/tablets.

  9. Does Palm have intellectual propery that can be used against Apple?

    1. Well, it’s been a common theory for why Palm hasn’t yet been sued by Apple despite having multitouch and other similar UI features as the iPhone since day one of WebOS. ;)

  10. Rather than HTC-Palm deal, a Motorola-Palm deal would be a better match. For HTC to jump on this type of business model seems like they will have to break from their existing relationships which is risky in the smartphone business. Just my 2 cents

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