HP set to acquire Palm in $1.2 billion deal

Published by Ewan Spence at 22:05 UTC, April 28th 2010

While outside the Symbian world, the news that the returning warhorse of Palm has been bought by HP could be good news for the industry as a whole. The merger values Palm at $5.70 per share, which works out to be around $1.2 billion. There’s been a huge amount of chatter online as to a suitor for Palm, with HTC, Lenovo or even Research in Motion, but the HP name is a bit out of left field. But there does seem to be some sense in this move.

Ewan's comment

The main consideration is HP’s lack of mobile phones in their portfolio. For a company that was one of the strongest supporters of PDA’s with their Windows Mobile based iPaq devices, HP haven’t made any strong moves to the mobile market.

And of course they’re still making hardware that requires them to licence a suitable OS from Microsoft. With webOS from Palm, that’s likely to change. Former Apple employee and current Palm CEO John Rubenstein is expected to carry on in the “Palm division” of HP, so that keeps the mindshare and knowledge of the Palm way of doings things alive and well.

On the Palm side of the equation, for all the history and legacy, the current iteration of Palm is essentially a start-up, backed by Venture Capital money. Elevation Partners ploughed in the majority of Palm’s operating cash, some $460 million, and Business Insider reckons they’ll step away with $485 million. A profitable deal by a small margin, but still more than could have been predicted a few months ago.

Palm should benefit greatly from HP's scale and distribution network; something which has been an uphill struggle for a relatively small company in the last 18 months. HP have the financial resources to realise some of the considerable potential of the WebOS platform. 

WebOS, a largely under-rated mobile software platform, is now likely to gain some major investment in engineering time from HP. The first HP / WebOS devices (beyond rebadging and spec bumps on the existing Palm designs) are could become available by the middle of 2011, perhaps in the HP range of Tablet devices.

This is a gamble on HP’s part. WebOS may have excited the geeks and Palm loyalists, but it never got traction in the marketplace or with developers. While the value in the OS or the staff is significant, it is also worth remembering the 1,500 mobile technology patents that are owned by Palm. 

The full HP statement can be found here, see also PalmInfoCenter for coverage of the investors conference call.


 

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News Discussion

Cjp
http://www.techradar.com/news/phone-...uy-palm-685469

and also was said last week on various other sites , msmobiles,coolsmartphone etc that HTC wasnt interested.
buster
I for one am pleased to see Palm survive. Hopefully they will finally sort out their business strategy, improve the quality and number of their devices and, most importantly of all, improve their customer support, which, until now, has been nothing short of woeful...
Dardano
This is great news for Palm/HP and bad news for Nokia. Nokia will never be able to achieve the sleek UI Palm offers with webOS that's why I thought Nokia should have bought webOS and integrate it with maemo (a very bad UI to use) Nokia is not able to bring out worthy OS that people like, just look at the reactions people have with Symbian/Maemo. It may very well be a great OS, but what good is it if its a pain to use. People wont pay that premium money for nokia phones hence the decline in profit margin the past few quarters. With webOS Nokia could have easily increased their profit margin because it's as exciting of an OS as the iPhone OS is.

Now HP is in a great place, with their scale and deep pockets they can easily grow Palm into 50 Million phones/year company, add Tablets to the table and only the sky is the limit. All they gotta do is attach webOS to some quality hardware and sell it world wide below iPhone/iPad prices, with the HP brand they can do it. People trust the HP brand and its well knows all over the world.

This is good news for the industry as it will generate great innovation and push Nokia into doing something right.
Jimmy1
H-P now owning Palm and WebOS isn't just a big deal for Nokia, it's a shot across the bow at RIM and Apple.

H-P has global manufacturing and logistics resources so they're definitely going to affect everybody else.

I too thought that Nokia made a mistake by not swooping in to not only get WebOS, but Palm's library of patents. Just imagine WebOS running on an E71...would have been super cool.
Rafe
I think this will make it harder for Nokia to get into the US (more competition - had thought Palm might drop out)... but globally I think HP are going to have to work very hard to extend Palm's reach.

And while I think WebOS is one of the most innovative / fresh UIs layers in mobile the underlying platform is far less desirable (e.g. look at time it took for SDK to come out). That might be the Achilles heel.

The idea that Nokia could buy Palm and just slap the UI its devices was always fanciful at best. UI toolkits don't work that way. Plus Nokia is making the investments in Symbian^4.
Unregistered
Quote:
Originally Posted by Rafe View Post
I think this will make it harder for Nokia to get into the US (more competition - had thought Palm might drop out)... but globally I think HP are going to have to work very hard to extend Palm's reach.

And while I think WebOS is one of the most innovative / fresh UIs layers in mobile the underlying platform is far less desirable (e.g. look at time it took for SDK to come out). That might be the Achilles heel.

The idea that Nokia could buy Palm and just slap the UI its devices was always fanciful at best. UI toolkits don't work that way. Plus Nokia is making the investments in Symbian^4.
I guess you forgot about the horrible UI slapped on top of Symbian and thought it would work like magic. Android and Apple get it. Build a UI based on the hardware and integrate the software to create an exciting user experience. To date Nokia has not grasped this concept.
Jimmy1
I read another Wall Street Journal analysis of the industry effect, that pointed out that H-P has its eye past smart phones.

Out of the gate, they may just try leap over everyone and compete with Apple in the tablet arena with a webOS tablet. If webOS becomes credible in that area, that could crowd out Android, Meego, Symbian and even Windows on similar devices.
Unregistered
@Jimmy1,

Until Symbian is re-written to the point where it is designed as a pure touch OS in the same way as Android and iPhone OS (iPod/iPad), it will not be anywhere as competitive. Look at the N97 and how that touch screen UI was simply laughable.
Unregistered
All these half-wits complaining about the Nokia UI last year are clowns. Nokia are changing to Symbian^4 via Symbian^3 and you are yet to see what that is like.

Not only that, but while these Palm pre things were hated in the market (despite the superior UI) the Nokias sold millions and millions and are still selling. Even the appalling N97 has outsold the pre by an order of magnitude.
Unregistered
Quote:
Originally Posted by Unregistered View Post
@Jimmy1,

Until Symbian is re-written to the point where it is designed as a pure touch OS in the same way as Android and iPhone OS (iPod/iPad), it will not be anywhere as competitive. Look at the N97 and how that touch screen UI was simply laughable.
"re-written to the point where it is designed as a pure touch OS"

Well it's a layered architecture so that will be pointless. That's like suggesting that iPhone OS has the BSD kernel re-written, or Android has the linux kernel re-written. Such a stupid suggestion.
Unregistered
Quote:
Originally Posted by Unregistered View Post
"re-written to the point where it is designed as a pure touch OS"

Well it's a layered architecture so that will be pointless. That's like suggesting that iPhone OS has the BSD kernel re-written, or Android has the linux kernel re-written. Such a stupid suggestion.
So are you saying that the iPhone OS is not written specifically for a touch OS? Are you saying that in act of desperation Nokia didn't bolt on a crappy UI to Symbian for their touch UI phones? Is that what you are saying? Talk about stupid.
Micky!
I have to admit here that i'm very surprised Nokia missed the boat on this one. Not only could Nokia have secured, and used WebOS, in doing so would remove the possible future threat in an already competitive marketplace.
Hardeep1singh
Web OS is not a threat, its just a fancy UI slapped on top of a stupid OS.

Buying Palm would've made sense for Nokia back in the day when it was purchased by Access Networks. Nokia could've picked up the old Palm OS and improved upon it back then instead of paying license fees to Symbian Ltd but not today when they've already invested so much in Symbian. Had they bought it today it would've been solely to gain ground in the US and would've resulted in Pre like devices in the US running on Symbian.
svdwal
Quote:
Originally Posted by Unregistered View Post
So are you saying that the iPhone OS is not written specifically for a touch OS? Are you saying that in act of desperation Nokia didn't bolt on a crappy UI to Symbian for their touch UI phones? Is that what you are saying? Talk about stupid.
iPhone OS has exactly one method that is specific to a multi-touch device. That method is called when there is a touch event, and it has the different touched points as a single parameter (it is a set).

Symbian OS could easily be adapted to multi-touch by adding a single method to a couple of classes, only one being used by apps.

Nokia did the smart thing by adding touch to their current S60 UI. If they would have created a new UI, there would have been no apps for touch *now*. The way they have handled it resulted in Nokia still being the biggest smartphone vendor with a stable market share. They made lots of mistakes, but adding touch to S60 is not one of them.

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