27 Comments

Summary:

The tech world was taken by surprise by the news that computer giant HP has initiated a purchase of beleaguered Palm for $1.2 billion. The merger is probably the best possible scenario for Palm, and here’s my take on what should happen to make this work.

Palm webOS thumb

The tech world was taken by surprise by the news that computer giant HP had initiated a purchase of beleaguered Palm for $1.2 billion. Palm has been in trouble for a while, and had been actively shopping for a buyer to bail them out. A few companies had been mentioned in the press as interested in Palm, but no one gave HP a thought. The merger of HP and Palm is probably the best possible scenario for Palm, and it will be fun to watch the process. HP has the resources to make the most of Palm’s technology, and experience at taking over innovative companies (remember Compaq?). Here’s what I think will happen with the merger, along with my thoughts on what better happen to make this work.

HP is in a unique position to take advantage of the Palm takeover. It is in the phone business, but not really. HP was big in the PDA segment for years, but never made a successful transition into the smartphone age. There are good people in this area with HP, but they’ve never been allowed to innovate. The absorption of Palm into the HP Personal Systems Group will be an infusion of talent and know-how that HP can leverage immediately.

That is first and foremost what the new HP/Palm team must do — release a new webOS phone that blows Palm’s past phones out of the water. Take HP’s great skill at producing top-notch hardware, and pair it with webOS to make a smartphone that will take the segment by storm. I have no doubt it can be done, and it must be done quickly to create the buzz needed to make people watch HP’s phones going forward. Make a webOS phone with hardware that rivals anything in the Android segment. Prove that webOS, coupled with outstanding hardware, is the best smartphone platform available.

HP must focus on the Palm/webOS effort in its phone business after the merger is complete. Drop Windows Phone 7 and work solely with webOS; no dilution of effort in the phone business. Palm’s OS is as good as anything on the market, so take it and run with it. Continue to innovate and grow the OS with the help of the Palm team. Send a clear message to the smartphone community and market that this is your product.

Throw a lot of resources into the Palm developer community. This is crucial to the success of the platform, and HP has the muscle and money to make it a vital part of the equation. Get developers to embrace the platform, no matter what it takes. Bring back those developers who have dropped webOS due to Palm’s problems. Make this a priority within HP and the phone group. Throw a boatload of money at developers if you must, it is crucial to the future of the platform.

Drop the Palm brand. This is not something I say lightly, I am nostalgic about Palm and the brand. But I believe it is vital that HP send a clear message to the industry that it is behind the webOS platform 100%. A clear way to do that is to bring it into the HP branding scheme, and quickly. Go all in with Palm by bringing it totally into the HP family. On every front it is important to send a clear message — Palm is HP now, and we are going to run with it.

Produce a webOS tablet that rivals the iPad. I firmly believe the webOS platform is a good one for such a product, and HP’s expertise in making mobile computers can be leveraged to full advantage in such a device. This will create a new product line that has amazing potential for HP, and all of the pieces are already in place with the merger to make this happen. HP can still go with the HP Slate, although that is just a netbook without a keyboard. What will be better is a thinner, lighter tablet with a mobile OS. That will truly compete with the iPad.

An HP tablet with webOS opens up the possibility for an ecosystem that can take on the Apple/iTunes/App Store. HP has the clout and expertise to use the webOS phone and slate lines to add apps, music and video to the mix in such a way that eventually HP can take on Cupertino.

The merger of Palm and HP will not be without cost cutting, and that means losing good people. It is inevitable given the high price paid for Palm. HP must do this intelligently, and without hampering the Palm team too severely. Make the combined team work well together after the merger. The priority should be fast release of new products that make a difference.

Related content on GigaOM Pro (subscription required):

Hot Topic: Apple’s iPad

  1. This is really the most exciting news of the year, even over the iPad. Because it now means there will be real competition to Apple. Devs won’t have to simply drop their pants and bend over to try to make a living in the mobile space. webOS is superior to Android in many ways. And it’s not fragmented.

    What I want to see is Adobe commit to webOS. Bring over Digital Editions, so webOS can borrow Adobe DRMed books from public libraries — something the iPad cannot do. That would also allow people to buy books from all of the existing stores out there that use Adobe DRM.

    I’m really happy to see webOS has a future now. This is very, very exciting. And I want a webOS tablet!

    Hey, Kendrick you fiend, since you’ve been using webOS all this time, we need a post from you about how you’d envision webOS on a tablet.

    Share
    1. There is still a huge potential for webOS as a smartphone. They just needed real marketing campaign. Palm didn’t convey how much better webOS is than anything out there with their retarded zen commercials. I don’t think Palm would have been in this predicament if they had a marketing campaign that actually showed how great webOS is. If people new how awesome webOS was there would have been a greater uptake and marketshare growth. Then all we would need is a new faster better model in June.

      Share
  2. Agree on every detail, with an addition: HP needs to continue to support the Homebrew community. These folks are among the most fervent evangelists for the platform, and HP cannot afford to alienate them if they want to bring WebOS back from the brink.

    Share
  3. This was unexpected. I think HP paid way too much cabbage for a failing company. Hopefully they can make some bigger more exciting hardware platforms to run WebOS on. I would expect to see a speed tablet soon, anything would be better than Windows on a tablet (as previous HP tablets failed with the horrific Windows UI). Must also create a monster app store to rival Apple even if they have to initially pay top tier companies to port popular apps.
    HP may be the largest PC company in the world but they still have a lot to learn about mobile gadget industry.

    Another thing HP should do is leverage their powerful Printer divison and create a universal cloud-based mobile printing solution ASAP (before Google takes over worldwide printing market for itself). HP should put firmware updates into all its printers to enable cloud-based printing solution. Now Get Busy HP…no time to waste as the mobile space move much faster than the turtle pace of the PC. :-)

    Share
  4. I think changing the name is definitely the wrong move. Keeping the Palm name says we invented this niche market and we are still here and will reclaim our marketshare that we dominated in the late 90′s. The future tablet should be called the HP PalmPilot. Couldn’t you imagine the slogans have the world in the Palm of your hand with the HP PalmPilot. You’ll never be lost with HP PalmPiliot on the only 4G network. It was U.S. Robotics, 3Com, then there was the great skism of Handspring, then the rejoining of Handspring and Palm. The Palm name needs to stay even if only in model naming.

    Share
    1. Agreed. HP still sells computers under the Compaq moniker, on the one hand. On the other hand is the disastrous experience most end-users had with HP-branded mobile devices towards the end of the line. Palm is a legendary name in the mobile world. HP should keep it, and not emphasize the HP. “Palm, by HP” at worst.

      Share
      1. Speaking of said Compaq acquisition:

        Before, in the Windows CE/Pocket PC/Handheld PC world, you had Compaq iPAQs and HP Jornadas.

        After HP bought Compaq, what do we see? HP iPAQs. Never another Jornada.

        Makes me wonder how this will turn out. (HPalm?)

        Share
    2. My thoughts on losing the Palm name are based on the fact that the name didn’t do enough for Palm, so won’t help HP either.

      Share
  5. Don’t forget that HP is established in the corporate space. This may be a chance to bring iPhone “cool” to a corporate phone.

    Share
  6. I side with Nilay Patel on this one, the ghost of Voodoo whispers to the future of Palms innovation. I think most creativity will be stifled by the relentless bottom line machine. I hope not, as I love WebOS on my Pre.

    Share
  7. I have to admit I was pretty stoked when I heard this, I hope HP puts some money behind the platform and lets it shine. This platform is perfect for small tablets and could deliver real competition to Apple.
    Apple has a marketing machine second to none, look at this win they pulled out of the so-called missing iPhone debacle. Millions of dollars of free publicity for something we’d all here about in a month or two anyway. If it wasn’t planned it should have been.

    Share
  8. Great acquisition. But 1.2 BILLION? Am I the only one that is surprised by that amount of money?

    Share
  9. As stated here webOS is great, also lastest palm´s hardware is cuestionable and yes, may be hp could make a great hardware for webOS to run, but the funny thing is that HP has no idea about go to marktet in the smartphone segment, so they bought Palm, and Palm failed completely in the go to market lately too…

    Share
  10. 1 more thing i would add… since it’s clear the amount of interest over this takeover is extraordinary through the press, blogosphere, gadget sites, etc. at LEAST on your 1st big public outting with new products do it “Apple style” by inviting all the press you can fit. regardless of sales, currently Palm is the only non-apple company with an OS that can generate this kind of attention amongst the press, now backed by the largest tech company in the world makes it even more coverage worthy. Googles division & MS’s no-show so far are keeping them out of them glamor circle.

    Share

Comments have been disabled for this post