Round Table: HP buying Palm, and what that means 48
Going to the chapel, and we're gonna get pur-ur-ur-chased...
Welcome to Round Table, which is in fact not a table at all. Round Table is a continuing series on PreCentral where we pose a question to the staff and they provide their thoughts and insights. The question could be something simple like “what’s your favorite webOS app?” or something a bit more complicated, like “why did Palm choose the creepy lady?” Or maybe we’ll just end up chatting about our favorite episode of Alf, you never know. Today, however, we’re going to take a crack at the big news of the week: HP is buying Palm, and what does that mean?
Craig: This is really a great outcome for HP and for Palm. Only a major technology player like HP can take on Apple at this point. HP needs a unique phone operating system but there is nothing unique about yet another Windows or Android phone. Plus we caught our first glimpse of the new webOS tablet product and saw a list of new features for webOS coming this fall.
The best result will be that HP will not have Palm's self-esteem issues. Sometimes we forget that Palm's phones are nothing like our phones. Almost a year later Palm has only allowed 5 of the 300 patches to be included in webOS. Image HP letting a Palm Pre be as powerful as one of our Pre's! If you had fears about Palm having sufficient marketing or design power, fear no more. This is an exciting time!
Derek: While we’re all pretty excited by the potential energy that HP stands to inject into Palm, I can’t help but temper my enthusiasm with some fear, uncertainty, and doubt. HP is a big company; in fact they’re so huge they’re the largest technology company on the Fortune 500 list (clocking in as the tenth largest company in the US of A). While HP brings a lot of money to the table and the ability to greatly grow Palm’s resources and muscle, they also bring their own corporate culture. Palm is going to be operating as a “business unit” within HP, but by no means are they going to be an independent faction. There’s an HP way of doing things, and Palm is going to have to eventually conform.
Of course, I don’t know exactly what HP’s corporate culture is like. You don’t get to be the world’s largest technology company by having a bad one, and it’s clear that whatever was going on in Sunnyvale just wasn’t working for Palm, so to say that a shake-up was necessary would be to understate the matter. What does worry me is the affect of such a big corporate culture on somebody as geared towards openness as Palm. The drive towards embracing the webOS homebrew community was partly out of necessity, homebrew developers only helped to enhance webOS in ways that the engineers at Palm hadn’t thought of, and helped to enhance and placate the vital enthusiast users. But with the backing of big time money from HP, Palm isn’t going to have to turn to the community to get things done. I still hope that they do, but there is nothing amounting to a guarantee.
Still, I’m cautiously optimistic. While I may have predicted that HP would be a good fit - their phone division is floundering worse than Palm - and believe that HP will do better things with Palm than HTC, Lenovo, or any of the other rumored suitors, I still have my worries.
Dieter: This is one of those purchases that in retrospect makes a lot of sense. It's very clear to me that HP understood two things: the most important sector in technology moving forward is going to be mobile devices and HP wasn't well positioned in that space. It's also a affirmation that Palm (and Apple) had it right: it's best to have a single company working on both hardware and software in concert. There are a lot of unanswered questions: will the Palm brand remain? Will HP's corporate culture mesh well with Palm's? Will HP have the stomach to allow webOS to remain radically open? We do have two answers that we didn't have before, though: First, webOS is going to survive and thrive as HP is deadly serious about making a splash in this space and has the money to back up that intent. Second, HP desperately wants to get webOS on a tablet/slate device. While I have reservations about the unanswered questions, those two answers make me really excited.
Jason: I am so pumped to see Palm finally out of financial danger. Palm has been incredibly supportive and accommodating with developers, but that meant little when Palm was in danger of going belly up. Now there's no excuse for developers not to port application for the webOS; Palm won't be disappearing anytime soon. Chances are Palm has at least one new device in the pipeline given a standard twelve-month release cycle. I'd be willing to bet HP got to see what was in-development. Given their acquisition of Palm, that could indicate they liked what that saw. It's obvious that Palm is aware of the competition and the announced next-gen systems/devices: Windows Phone 7, iPhone OS 4, HTC Evo, BlackBerry 6, etc.
Palm has got to go all-out with their next high-end device, and given the new funding HP can provide, Palm will be able to. No longer will Palm be dependent on carriers, bending to their demands. Best yet, marketing has huge potential to improve. And let's not forget about potential non-smartphone devices that could now be equipped with webOS. A tablet is an obvious choice, but I personally would kill to see a netvertible (similar to the ASUS Eee PC T101MT) equipped with webOS. A hardware keyboard that wouldn't be needed all the time would follow the webOS philosophy the Pre and Pre Plus instilled. Honestly, I'm excited with all the possibilities the acquisition by HP will provide.
Jonathan: First, second and third thought: I’m thrilled. HP is a well-regarded US technology leader, with strong presence in both consumer and the all-important business market, strong existing manufacturing relationships, and no preexisting partner commitments that are likely to significantly conflict with webOS (Windows Mobile is not a major part of HP’s business, unlike Google Android for HTC). The fact that HP has already designed a tablet (the Slate) and worked through those hardware design issues is a huge potential plus.
As with any acquisition, though, the medium- and long-term fate of Palm’s culture and people is unclear. For now, at least, HP seems interested in maintaining Palm’s brand identity and separate status as a business unit, but some redundant jobs (e.g. HR, perhaps marketing, finance, others) will almost certainly be at risk. We also don’t yet know if HP will be as willing from a corporate perspective to preserve webOS’ openness and (beneficial) hacker-friendliness. Still, the fact that Palm no longer has to depend on the vagaries of the market and carrier whims for its survival is a huge plus. I wish everyone involved in the transaction an easy time of it, and hope for great things in the future.
Keith: HP scoops up Palm and is going to attempt to nurse the baby calf back to health. “Sweet!” is my first reaction and should be for the majority of webOS users (heck, even potential webOS users have gotten excited, and rightly so). Palm will have the fat wallets of a successful company behind them and the excitement of that company to boot. Yes, HP is just as happy to snap up Palm as Palm is to be bought out. It's honeymoon time for both... that annoying trait that seems cute at the moment might be a problem down the line, but who cares for now.
I am going to assume that the corporate subculture at HP is more stringent that the freethinking engineer-come-corporate-types over at Palm. Does this mean the cute attractive openness and creativity that formed webOS (fun fact: webOS was a grassroots project over at Palm and actually took over what Nova was supposed to be) will be something that HP stifles down the line because it's not so cute anymore? The problem was, without HP, Palm was flat out doomed. Elevation Partners making ANY money is actually impressive, so with the dollars being a non-issue... can Palm rise from the ashes and improve their product (hardware line) worthy of webOS? *shakes Magic 8 Ball app* "Outlook is good". Damn straight it is...
Robert: This deal is big. HP's acquisition of Palm vaults the company into an elite club of which there's really one other member: A technology company that has deep pockets, huge amounts of IP, and tons of scale with a vertically integrated approach to computing - that is, having complete control over the development and deployment of the hardware, software and services. Sure, you could say that Research in Motion employs a similar model, but they only make phones (and services) - and the smartphone is going to be just one of the many form factors to reach ubiquity in the mobile revolution.
This buyout, by this company in particular, is probably the best outcome for Palm. In its current state, there's no way Palm would have been able to really compete. Eek out a tiny (and perhaps sustainable) percentage of market share, sure, but the company would never have been able to attain the scale necessary to impact the market in a meaningful way; the continued onslaught of Android and the upcoming Windows Phone 7 device would have continued to stifle the company's growth, and one of the best mobile operating systems ever created would be relegated to a small niche, never seeing the limelight it (and the mobile computing space in general) deserved.
Overall, this has the potential of being hugely beneficial to us consumers, but it is all hinged on the ability of HP to keep the culture of innovation at Palm that was the driving force behind webOS and the related products we see today. If they can harness Palm's engineering prowess and creative vision and apply that to all of the company's mobile product efforts, we're going to start seeing products that will truly rival those of the other member in that elite club, in all form factors.
Phil Nickinson, Editor, WMExperts and Android Central: Somebody had to buy Palm. It was just a matter who. Will HP turn out to be the right fit? We'll have to see. Turning a foundering ship -- and that's exactly what Palm is -- around is never easy, as we've seen in the past year and a half. HP brings a very strong consumer brand, though one that I'm willing to bet a good number of current smartphone users don't even know got into the PDA game a long, long time ago. There are a lot of questions still to be answered, the largest of which is "Will Palm still keep its identity throughout becoming a business entity of HP?" And how will HP treat Palm? How will Palm's employees react? Is a mass exodus on the way?
CEO Jon Rubenstein made it sound as if he's had plans he hadn't been able to execute given Palm's financial situation. We'll have to see if HP gives Palm the financial and creative freedom to do so.
Rene Ritchie, Editor, TiPb: Unlike Derek, I wouldn't have put my money on HP being smart enough to snap up Palm. They have the resources and the reach to accomplish great things but until yesterday they were content to license commodity operating systems and slap them onto middling hardware. Buying Palm is bold, gutsy and radically alters the mobile landscape. Arguably Palm all by themselves out-engineered everyone else in the industry last year with the release of webOS but a series of hardware issues, carrier missteps, and marketing blunders hamstrung them. HP has the massive bank account to fix the marketing, but they'll need to nail carriers and hardware as well. Middling just won't do. Also, HP should have announced they were dumping Windows Phone to go all in on webOS. They need Palm's vision and singular focus going forward. Hedging is for the timid. That said, I can't wait to see the amazing phones and -- yes, tablets -- they bring to market over the next year. Palm and webOS have found a good home and the competition is only going to get faster and better. Congrats to everyone at Palm and HP. Make something great.