Friday, April 30, 2010

Palm ... what once was

News of this week's purchase of Palm, Inc. by Hewlett-Packard has drawn a mixture of responses. Of course, H-P sees that the future is mobile. Perhaps they have decided that buying their way into the mobile market is cheaper than trying to develop a product that competes with the Droid or iPhone.

Some industry analysts see this as a bad omen for Motorola, Apple and RIM. For two reasons, I'm not so sure.

First, the most innovative phones of the past 3 years are the iPhone and the Droid. The Pre was a lame attempt to compete with the iPhone. So, even though it beat the Droid to market by more than a year, it has yet garner any significant share of the market. The BlackBerry's position in the corporate market is safe, for now, and the iPhone and Droid have a virtual stranglehold on the consumer and small-business sector.

Secondly, I don't believe this transaction is about phones at all. I believe that this move is to help H-P expand their offering in the newly emerging tablet market.

There has yet to be a Windows tablet that has generated 1/100th of the buzz that the iPad has created. If H-P can translate the strengths of the Palm OS into a touch-screen tablet that can compete with the iPad, then the acquisition could be a game-changer.

Can they compete from a marketing standpoint? They have enough cash to do so.
Can they compete from a product standpoint? Time will tell.

1 comment:

  1. I came across an interview today that supports your argument:

    It will be interesting see if H-P succeeds with this merger.