HP buys Palm. A vote of no-confidence in Windows Phone?

The first PDA I owned was an Apple Newton. The next, it was a Palm III.
Written by Simon Bisson, Contributor and  Mary Branscombe, Contributor

The first PDA I owned was an Apple Newton. The next, it was a Palm III. That was followed by a mix of devices, swapping between Windows CE and Palm. Most of those Windows CE devices were Compaq Ipaqs and HP Journadas. But I always had a soft spot for Palm.

Fast forward to today’s news, and HP has bought Palm for just around $1.2 billion dollars. That’s a big investment for what a lot of pundits have said is a failing brand. It would be easy to catalogue Palm’s missteps since its much heralded launch of the Pre at CES in 2009. Choosing Sprint as a launch partner was one such misstep, as was waiting so long to roll out GSM 3G devices. Then there were the various fiascos over the developer programme, which left the WebOS app store looking very thin indeed. But Palm is a scrapper, and it’s been fighting back, with improved devices, new releases of its really quite clever WebOS platform, and a new set of web-based developer tools for its widget platform.

I’ve been playing with a Palm Pre recently, and it’s a nice little phone, responsive, and (once you’ve mastered its slightly obscure gesture dialect and remember that its touch screen goes on to the phone case) it’s relatively easy to use. The mix of social and enterprise information is well thought out, and there’s an elegance to the information architecture that showcases all those years of PDA and smartphone development.

But with very few people writing apps, and not that many buying Pres, the company has been living on borrowed time. . Plucky as Palm is, the markets had scented failure, blood was in the water and the sharks were circling. Now Mark Hurd has ridden in, a surprising white knight, swooping in to buy the struggling smartphone company.

At first I wondered, “Why?” HP has a reasonable enterprise smartphone business with its long-running Ipaq line. It’s built relationships with most of the Windows Mobile ODMs, and through those partnerships has come up with some remarkably innovative devices. Unless you’re an enterprise messaging admin you won’t have seen them, as they sold straight into large business accounts. Now it’s looking like it’s abandoning that heritage, and taking a new route out into the wilds with WebOS.

But there’s a pair of words in that last paragraph that say it all: “Windows Mobile”. Windows Phone 7 has come along and wiped away the heritage of Windows Mobile with a beautiful, powerful, and above all, consumer OS. That’s not what HP needs for its enterprise customers, and it also doesn’t need a legacy Windows Mobile Classic platform that’s condemned to a slow decline, and an indirect relationship with the folk in Redmond.

So why not cut those ties, once and for all? Bringing WebOS in house gives HP its own mobile OS, its own development platform, and a set of tools that give businesses the enterprise features they demand, and users the consumer features they want. It’s a push back at Microsoft’s consumer mobile focus, and one that makes sure HP isn’t risk of anyone else suddenly changing direction. Android remains too consumer, and too beholden to Google for access to the core applications. It might have an enterprise role in the future, but HP needs to make its platform decisions now if it’s to retain the trust of its largest customers.

Buying Palm, not for the phones, but for WebOS, is a smart move. It’s not cheap, but makes a statement. HP is a mobility company, and it’s not going to let anyone push it around any more. It’s had enough, and it’s going its own way. Things are going to be very interesting.


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