Hewlett-Packard Buys Palm and Focuses on webOS
Hewlett-Packard emerged as the surprise buyer for Palm, paying $1.2bn - the low end of expectations - for the Pre maker. The PC giant gains a relatively cheap shot in the arm for its smartphone strategy, some useful presence in its core enterprise market, and some technologies that could help it stake a claim in the emerging devices that sit between phones and notebooks - a vital territory in which any PC vendor must shine in order to sustain growth.
- The best that can be said for Palm is that it has found a buyer, something that was looking dubious as various interested parties, nearly all from Asia, dropped out. Some of its innovations will survive in the HP line-up, even if its venerable brand disappears in time. The future of its main technology asset, the advanced though underused webOS, is uncertain though. HP says it will keep the platform and build on it, but it is only likely to invest in it, at the expense of its current favorites, Android and Windows Mobile, if it can drum up the significant developer support that Palm failed to attract.
- HP timed its purchase well, staying under the radar while takeover talk boosted Palm's price, then swooping in once HTC, Huawei and others dropped out, forcing the share price down on fears that Palm would be left stranded. It is not clear whether Lenovo, which was understood to be in serious talks, dropped out too, but it obviously was not prepared to engage in a price war, even though the Chinese PC maker is an arch-rival of HP's. Like HP, it has recently beefed up its smartphone strategy, and looked to expand this beyond the enterprise and into consumer handsets and new device formats like tablets and smartbooks.