Why did HP buy Palm? To escape the dead end of Windows
If I were an HP shareholder, I’d be wondering whether the company’s gannet-like dive on to the ailing Palm wasn’t another one of those doomed impulse buys. Get home, unwrap the box and what is inside? A pair of modestly-selling...
Get home, unwrap the box and what is inside? A pair of modestly-selling smartphones, an operating system called WebOS (or webOS), a clutch of developers and some assorted IP perhaps. It might be worth the billion dollar price tag, it might not, and there will be sceptics arguing that this is corporate retail therapy on an unwise scale.
They are probably wrong. HP buying Palm makes sense and here is an argument as to why.
It begins with the odd development effort behind HP’s Slate, an iPad-like computer that has been publically trailed for longer than we knew anything about its much more famous rival. Computers that look and perform something like the iPad are predicted to be a whole new computing segment to rival even laptops, and you can see HP’s deep desire not to be left behind here, hence the Slate.
But what’s happening with the Slate? Not a lot, and there are now reports that its stilted development might see the current model shelved altogether. The problem is that the model the world was shown runs Windows 7, and that turns out to be a problem on a number of fronts.
Windows 7 was never invented to run Slate-like computers. It is too big, it uses too much battery power, and despite its warmish reception few rate it as the future of the computer GUI either. It looks like yesterday’s ideas warmed up a bit.
HP could always wait for the mobile-oriented Windows 7 Phone assuming that gets into a shape that might run on such devices satisfactorily. Except Microsoft’s development timescales are notorious. Microsoft’s record of making GUIs is mediocre and Ballmer and Co are still going to charge HP for every Windows 7 Phone license to run Slate-like devices, not to mention iPhone-like smartphones.
It is economics. Choosing the Windows path leads to uncertainty, it will probably lead to something that has technical issues, and it leaves Microsoft handing HP a license bill that jacks up the end-user cost.
WebOS, on the other hand, gives HP back some control, allows it to get the final cost of whatever it comes up with the Slate project to a competitive level. Being at core Linux-based with proprietary add-ons, it removes the licensing overhead, it is a dedicated mobile environment and it is here now.
As one of the first mobile operating systems which assumes the cloud, some people even think WebOS could be technically significant in ways that will take the Android steamroller time to catch up with. With HP’s backing developers will program for it.
HP’s Palm OS could be the perfect marriage of rejuvenated device maker meeting brilliant but rather lost software that the industry needs. That the Slate might not use Windows 7 is cause for rejoicing. That it will not use Windows 7 Phone could make non-Apple iPads cheaper.
Acquisitions tend not be as great as they are cracked up to be. But this one could yet be about more than the dividends posted to the shareholders.