4/29/2010 12:23:00 PM
Palm's knight in shining armour
HP sent Palm a knight in shining armour when it saved it from an untimely death today (29 April).
It was a signal of HP's ambitions in the mobile phone space - and HP is deadly serious.
Its revenues outstrip both Nokia and Apple, the latter by four times as much. It has the money, the brand, marketing skills and distribution that Palm lacks despite the manufacturer's championed webOS platform.
But Palm is very committed to webOS and Palm has a roadmap. HP will push that to market, while the products will have a lot of marketing behind them and may even come sooner.
Apple, Google and HTC might just be quaking in their boots.
It's the perfect fit. All of the big phone manufacturers will have looked at Palm and if Nokia had wanted Palm it would have bought it. But meanwhile, HP is all too aware that to be competitive it needed to find a route into the overflowing mobile market.
CCS Insight Analyst Ben Wood says: 'This is good news for Palm. Companies like HP all know that as comms and computing come together they can not ignore the mobile market. They [IT companies] all know they have to make mobile phones. Dell and Acer have already made Android devices and HP has been making phones for quite some time on Windows.'
If HP's brand and distribution get it right, it could be daunting for Nokia and Apple. The acquisition of Palm's platform also gives HP the end to end offering - like Apple it owns the lot.
Although HP doesn't necessarily have mindshare in mobile, it has the resources to make a noise in the market.
Wood reckons that HP will crack the US market first. 'There is more opportunity to do something quickly,' he says. 'Then we will see growth in the UK, but we will have to give them a couple of years.'
Some see HP as a threat to Asian manufacturers such as Acer and Huawei. Wood dismisses this, saying: 'They have been disruptive with prices but HP is looking for premium entry, so the others will continue to be agile.'
HP's long-standing relationship with Windows Mobile is also under scrutiny, but the manufacturer remains tight-lipped.
And what will happen to Palm's current structure? Rumours are already rife that it will cut its UK operation and it has been suggested that poor sales have halted O2 from buying anymore of its Pre smartphones, perhaps to concentrate on the newer version, the Pre Plus.
Until 31 July when the deal goes through, those questions may remain unanswered.
But what can be sure is that HTC and Apple will look at this with interest and for people that have bought into the Pre, it's good news.
It seems Palm's future is secure.