Yesterday HP announced that it was going to buy Palm for $1.2 billion (HPalm?). I think it’s a stroke of genius. The more I dig into this plan the better both companies look to benefit from it. There are a lot of hurdles to overcome, but if they can execute on some key opportunities they could be perfectly positioned to give Apple a run for the money. It’s not rocket science to see the potential here or to come up with even a modest plan to give them a good shot. Early indications are that HP will leverage sales and market reach to push Palm devices into the market. I hope that’s not the end of the plan. It might yield a quick buck but there’s so much more they can do.
HP can learn a lot from Palm. The Palm Pilot was as ubiquitous as the iPhone at one time. You kids might not remember this, but there was eventually something that looked like an App Store (see: handango.com), versions of the Palm eventually supported peripherals (see: Handspring) and there was even a phone version (see: Treo 600). Today it seems absurd that you’d have a mobile device that wasn’t a phone (or would you? iPad), but back in the late 90’s and early 00’s it was pretty normal. Today Palm sells only a couple of devices. The differentiating factor is whether or not it has a physical keyboard. It’s a perfect line-up, but without the marketing bucks to compete against the big Apple Palm was struggling. But they’ve got the right products: smartphones, and the right number of them: 2.
There’s a few ways this can play out over the next five years or so. The old corporate plan would be for HP to slurp up everything Palm, dump the brand, keep the devices and squeeze all the life out of it. A more moderate plan would be to keep the Palm brand to sell phones and dump the iPaq line. Neither of these plans cash in on the real potential of Palm. Palm’s brand still invokes the idea of simple, smart devices that I can have in my pocket and if they can produce a tablet they’ll have a good play against Apple’s iPhone and iPad. After they establish a solid rivalry HPalm should consider getting into the music and movie download business. That’s when things will really start to get interesting.
Update (8/18/2011): Looks like they’re shutting down WebOS. Oh the humanity!