One thing the article seems to be missing is that this is a bet, not a certainty. The biggest way to lose in the market is to never gamble. If it doesn't work, HP loses 1.2 Billion. Big deal. It's nothing. And they won't even lose that much, as the patents alone could sell for some money.
There's a huge potential upside, way more than 1.2 Billion. HP is a huge company, with enormous resources, and when you give them some good technology and a very strong patent portfolio, you have some big opportunities.
Keeping them part of the computer division makes sense, since phones are computers, and every generation gain more features and functionality of the PC. No doubt HP sees that integration of technologies could have some benefit.
Also, phones don't carry huge brand loyalty. Does anyone doubt HP can make a phone that will appeal at least to 10% of the market? Or even 5%? I don't. It's a huge market, and you don't need a huge market share to make money. HP has such enormous resources they can build a viable structure for the phone quickly, albeit with minor problems, and produce a competitive product.
I think HP did the right thing. Taking risks so you can grow is part of vitality and life. Being too afraid to belongs under the category of pathology.
their only problem is the lack of vision.
my 2 cents: get microsoft on the wagon and kick apple's butt. then, and only then can you tackle google's android and start gaining market share.
I could also be so wrong, so don't take my word.
actually this acquisition might turn out not bad if they handle it correctly
i would reason that HP inserted palm into the PC division because they want to leverage their hardware for the palm device, as the author mentioned having a kick@ss OS is not good enough, remember HP acquired the ipaq PDA device from Compaq, they just need to convert one of these things into a phone device, palm can concentrate on refining the webOS augment this with HP corporate muscle in the guise of HPux (auguably one of the most robust corporate implementation of unix) and they may well be onto a winner, it's not going to overthrow either iPhone or android overnight but it may produce a competitive device, in fact if i were to hazard a guess, HP could well be lining RIM up in it's sights....
I disagree, if Palm has so many patents and HP had a lot of resources, think of the combo... unlike others like Apple trying to sue over things they think they invented, Palm has real patents to a lot of the smart phone tech, and HP has lots of money... so if they wish to pursue they can go on a sueing spree and win as they really do have the patents to back them up... OR demand royalties... Palm was in the red and could not do such things on its own (not effectively that is) but now they can.
I would say watch out MS, and Apple and even Google...
besides HP might have a better edge over RIM in the market IMO, that would push them into third or near third place
Personally, I think the purchase is a brilliant move. HP already have some smart phones based upon their iPAQ devices...and frankly, they suck. Another aspect is that they are beholden to Microsoft because they use "Windows for Phones" (Whatever MS is calling their embedded OS this week). With Palms new phones, they have a device that is based upon Linux, something that HP really loves because they have full source, and they don't have to pay a dime to Microsoft for it! Also, HP has a great deal of internal experience with Linux. With the Palm's version of Linux, they now have one operating system that will work on everything from their Superdome Supercomputers all the way down to hand-held devices. And *that* is where the real story is!
I don't think that the Palm acquisition is about smart phones at all. It's about competing with the Apple iPad. HP axed the Slate because Apple raised the bar to a level where HP realized that a Windows-based tablet was a non-starter. That's why they put Palm under their computer devision.
However, my belief is that WebOS is no match for iPhoneOS or Android.
HP had always been an engineers company. For a long time their products were geared pretty specifically toward engineers. Their products were sparse and functional. This is sort of the problem I see with their acquisition of Voodoo, that deep down, the companies had vastly different "feels" that don't equate in the scheme of one another's ethoses. I think in a similar way, they'll probably have trouble even making a handset people like. What appeals to people when they buy a handset/smartphone is different than going out and buying a scientific calculator because it uses RPN. And in all honesty, I don't think given their pedigree, that they're going to be able to make a smartphone that will have placement. But There is a strategic value to their acquisition...The ipad has shown that there is an even more weird marketplace for portable devices than people probably expected.
Let's be honest here, the ipad is a really weird fish. And people carry the things around like they were a phone/netbook/laptop, they have a big exposed screen, a danger to itself in that way, they're an awkward size for a portable device, small but not small enough for a pocket. The point is, that it's weird, of marginal use, and people buy the things. Yes it's apple, and yes they can sell any of their wares to any of their devotees, but It also shows that people like little gadgets. (We already knew this I hope). Clunkier and weirder the better probably.
Even though any sane person has gotten fed up the the gadgetry at this point, There is a need for some of the stuff, and people are quirky. Palm's acquisition does have some potential value, if they're smart enough not to enter the smartphone market, and go instead to something more in the direction of smaller-than-a-laptop mobile devices. A small sleek OS for devices like that could be a goldmine. Provided they don't put themselves directly in conflict with apple.
I can't but help wonder if this acquisition is why HP decided to kill off its Slate tablet, or at least the combination of a tablet and Windows 7 with a touch based layer added to it.
Using Palm's WebOS for this device would make much more sense, result in far greater battery life and be faster than the Atom they were going to use while at the same time let them use a 'slower' processor.
Personally I think HP makes things by committee, everything gets jammed in and let others work out the details. Looking at HP computers or printers in the stores there is alot to be said for fit and feel of the product, there just isn't the pride/love that needs to be...a kind of a good enough, lets get on to the next project mentality. It is how I see their products.
How this would work with Palm? It would go with not giving enough resources, lots of goals and tight deadline that would be pushed back with underwhelming overall design because that was what they had to settle for with the resources given.
How they could win? Give resources for a tight simple (but flexible) design for people to get their hooks in. Up the complication and improve for the same price. Keep the team compact and solid and adding employees as it grows. Give tight deadlines and improve it as intel and others do to leapfrog with design hardware, every year update hardware, every year update software, every 6 months either hardware or software will be upgraded with known stuff that will be in it and worked on in a known schedule. Keep it tight and simple yet flexible.
Probably what will happen will be to throw random engineers at it under a responsible manager, this will probably fail.
Just roll out some classic PDA's...Palm OS 6 (with full back compat for OS 3/4/5 apps), wifi support, multitasking, and all that simplicity we loved of the good 'ole days. Then integrate a phone somewhere down the line.
Apparently, the author and many of its readers have not spent a good amount of time using the Palm WebOS. The hardware is the easy part for HP, and they'll probably keep the WebOS, which is an amazing portable platform.