57 Comments

Summary:

HP has agreed to purchase Palm for $5.70/share, or roughly $1.2 billion. The deal, which adds Palm’s patent portfolio and the webOS operating system to HP’s coffers, could subsequently give webOS a new lease on life for current and future smartphones, if not other mobile devices.

Updated: After weeks of speculation that Palm could fold or be acquired, a buyer has come forth — HP has announced that it’s agreed to purchase Palm for $5.70 per share, or roughly $1.2 billion. The deal, which adds Palm’s patent portfolio and the webOS operating system to HP’s coffers, could subsequently give webOS a new lease on life for current and future smartphones, if not other mobile devices.

Palm wowed many with webOS when it first introduced the platform at the 2009 Consumer Electronics Show, but the excitement has since turned to disappointment. Sales of Palm phones running atop it were hampered by a 6-month exclusive launch with Sprint which was bleeding customers, and by the time Palm could take its Pre and Pixi handsets to Verizon, that carrier had committed $100 million in advertising — to the Motorola Droid. Add to that the fact that webOS hasn’t attracted the widespread attention of developers and you can see why consumers have turned their backs on Palm. Om has chronicled Palm’s journey in detail.

So HP could save Palm’s smartphone platform, but perhaps a more interesting scenario would be for HP to combine Palm’s webOS with HP’s hardware design and experience. The company is already preparing its Slate device with Microsoft Windows 7, but as I’ve said repeatedly, cramming a desktop operating system into a mobile device isn’t optimal. Now that HP is about to own the webOS operating system, perhaps we should be looking for a different slate tablet from HP — one that runs webOS and multitasks like a champ.

Update: After listening in on the conference call featuring Tom Bradley, EVP of HP’s Personal Systems Group and a former CEO of Palm’s software group, HP has essentially spent $1.2 billion to buy Palm’s webOS and patents.

Bradley emphasized that HP plans to release smartphones, tablets and
maybe even netbooks using webOS and that it will back the platform
with a significant sales effort as well as a heftier R&D budget than
Palm was spending.

Words and phrases used repeatedly in the call such as “accelerate” (HP’s entry into mobile computing) “cloud-based services” and “integrated customer experience” made it apparent that HP is planning to develop a mobile computing platform that it can link with its other products.

Bradley noted that it plans to do this in both the consumer and the enterprise realm. When asked if HP will pursue a content strategy akin to Apple’s Bradley said, “We’re not content creators but we are access providers,” and then declined to go into specifics.

He also declined to elaborate on what the acquisition might mean for HP’s relationship with Microsoft, which is a strategic partner of HP’s. As for why HP didn’t decide to focus its efforts on Android, Bradley said that he believes the mobile market is still in its early stages and stressed that with HP’s backing and investment in webOS, he believes it will be a more compelling platform.

You’re subscribed! If you like, you can update your settings

By Kevin C. Tofel and Stacey Higginbotham

You're subscribed! If you like, you can update your settings

Related stories

  1. Resurrected? That implies it was actually dead. Other than on various blogs that were writing obituaries, I didn’t see that it was dead yet (and no, I am not a Palm fanboy, don’t have a WebOS device). And do you really think HP would pay 1.2 billion if they weren’t planning on continuing the development? They have a pretty well-known brand of their own, so really no need to just buy the company for the name.

    1. It doesn’t have to mean Palm or webOS was already dead according to the dictionary: “to bring to view, attention, or use again” ;)

      I fully expect HP to continue development. In fact, I hope they do – as a former Palm Pre owner, there are still minor nagging issues that should have been addressed by now. With HP’s backing, webOS could become even better… and it was pretty good to begin with.

  2. Just does not seem like it is going to be successful to me. I think Palm will just die a slower death now than they would have on their own. I just don’t see people rushing out to buy webOS devices even with HP’s name on them. Maybe HP just needs a big write off for next year??

    1. You need to try a WebOS device sometime.

    2. I think that the Web OS is the only platform that could in a short time compete with the iPad. Your opinion may be different, but everything is in place. Palm has some nifty tools that with resources could attract developers. I looked at the platform, and believe that such a partnership was the only thing lacking.

    3. Totally agree, WebOS is the best mobile OS. It needs more money and better hardware. HP can provide them. All they have to do is create hardware for the slate. The OS, apps and the entire “Eco” system are ready, thanks to Palm.

      This could mean Google and Microsoft are the real losers. In the long run, Dell will suffer from this deal too. Android is facing patent issues with Apple and Microsoft. I can see Android falling to ground in couple of years.

      1. I think Dell will probably do OK in the short run; HP, if they’re smart, will let the Win7 version of the Slate fall by the wayside to focus on WebOS tablets, which leaves an opening for a major manufacturer in the Windows tablet realm. Dell could then be in a position to provide high-quality tablets for both Win7 and Android. Ultimately, though, I don’t think Windows tablets are going to succeed, and Android’s prospects are significantly more questionable with HP backing WebOS.

  3. Esteban Díaz Asúa Wednesday, April 28, 2010

    Have you heard about the Smartbook being launched in Spain by Telefónica and HP: http://www.todanoticia.com/11771/telefonica-hp-inauguran-espana-era/?lang=en

    Will Android support be so short-lived?

  4. The big question to me is, will HP be able to get developers on board. If not then they will need to find a way to tie into the Android market (maybe a dalvik VM like Obuntu). No doubt they will have the hardware and designs but can Web OS come back against the open sourced Android?

    It certainly could be a great OS for all types of mobile devices but as we all know, the best OS doesn’t necessarily win.

    1. Charles, that’s an excellent, key question because Palm doesn’t have the developer traction that other platforms have right now — even with a solid operating system.

    2. I’m no developer, but I believe the Android and WebOS platforms are more similar than people know. Both are Linux based, both use WebKit browsers, and although WebOS isn’t free, it is most certainly open to developers.
      After all the negative press about how Apple treats their developers, I really think HP will be easily able to attract some great talent.

    3. If only some HP/webOS device will sell well there will be loads of people making apps for it – tools are there already and for webOS you program using webtechnologies like JS/CSS/HTML, so it’s easy for devs to get into it. But in the first place the success in the market is needed, developers want to be sure they are not investing their time/talents into the platform that will be dead in two years from now.

  5. Sanjay Maharaj Wednesday, April 28, 2010

    This is a smart move by HP. With everything moving to mobile they needed a WebOS of their own and by acquiring Palm this gives them their own OS. This is not good news for Google as was HP will now not go with Google’s Android . Remember HP is a $125 billion company and a small acquisition like this has very low risk but huge rewards if it can pull if off.

  6. Kevin, This will be huge deal. Its a great thing for both. Palm needs money, HP has money. Palm needs good hardware, HP can give them.I am waiting for the day HP releases a WebOS tablet. The HP-PALM (ex Apple) combo will created products that will be viable alternative to Apple’s products. I am not sure the tech pundits are paying attention to the PALM’s “APP Eco” system. It is the second best out there in terms of creating apps ,distributing apps, maintaining customer profiles after Apple’s. All HP needs to do is to create a slate then port WebOS, tie it to the PALM App store. Bingo. You now have a better product than iPad which can do flash (in couple of months).

    1. Yes… now that it has WebOS HP will be able to create a tablet that will crush the iPad… just like the Pre has crushed the iPhone… oh wait… never mind.

      1. Marketing the Pre failed , no money.I guess you are not aware of Palm’s history, they were starving for cash and were ready to die their own death before Elevation partners rescued them.
        WebOS tablet will be superior to iPad with the exception of available APPs. You can install freeware apps outside the app store, you can view flash videos(which will be supported by WebOS in about two months). And the joy of true multi tasking.. OBTW you can use extended battery too.

  7. It is too early to know if this will be a good deal for HP. However, it is clear the big loser here is Android and to a lesser extent Microsoft.

  8. I’m getting really excited about this deal. If HP plays their cards right with WebOS, they might be able to blow the tablet market wide open. My reasoning here is that since Android is open source, everyone and their brother who wants to produce an Android tablet can do so, which means that there’s little to distinguish one from another apart from price. We saw how well that worked with netbooks: even if you sell a bunch, you can’t make a decent profit, because your margins have been slashed to the bone to keep the price competitive. Meanwhile, here comes HP/Palm, potentially offering what only Apple has been in a position to sell so far: a premium mobile operating system optimized for tablet use. With sufficient build quality and a few key application partners (Amazon and Netflix, in addition to Palm’s existing ties to EA), a WebOS tablet could be a much more direct threat to the iPad than race-to-the-bottom Android tablets. That’s good for everyone, as both Apple and HP will have to keep bringing innovation to the table in order to outdo each other, and Android tablet development could get a shot in the arm from the desire to play with the big boys instead of being a second-tier tablet platform.

    1. Agree, a premium mobile operating system combined with app store is the key here. HP has to act fast. They should release a tablet before the year end. Apple is not only smart but works fast too. HP has to become nimble to catchup with Apple. They could have released the Windows slate , but they didn’t. Which is a shame because half the job is done by Microsoft and HP is still waiting for a date.

      Hopefully the Ex Apple mercenaries will force HP to become a nimble company.

    2. Absolutely! Anything that provides competition to Apple is great for us consumers (even the Apple fanboys like me should be able to agree on that).

  9. This is the beginning of a beautiful marriage. Why the need to create content a la iTunes when the web is free? Hello Adobe! Neverless, Gameloft and Glu are releasing apps for this platform and others a trickling in. I see an HP slate running WebOS by Xmas.

    1. I hope so. There are about 400 games of which a good 30 are from big names (Gameloft,EA ..). Tablet can use all of these. Besides every game out on iPhone can be ported over to WebOS with minimal work, which IMO, is the killer deal that will bother Apple.

  10. Seems like a very good match to me.

Comments have been disabled for this post