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Does HP + Palm = Facepalm?
ChiefMonkeyGrinder submitted a bit of commentary on yesterday's news that
Hewlett-Packard was buying Palm. From TFA:
"When I first read the news that HP was buying Palm for $1.2 billion, my first reaction was that HP had lost its marbles ('clueless' was how I tweeted it). Why, I wondered, did it need to pay $1.2 billion for a dying platform when it could have used the increasingly popular Android for nothing? (OK, it probably picked up a few useful patents, as well.) I also thought that it didn't have the resources to enter the extremely competitive area of smartphones."
I totally thought âÅ too.
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HP competitor Acer (number 2 in notebooks worldwide behind HP) is coming out with a line of smartphones of its own, and it needs this purchase to leapfrog them.
called expertise. Palm has a lot of talented employees, a lot of IP, and a lot of faithful users. These things will all be good for HP if they're really serious about competing in the mobile arena. Many companies fail because their business plan/marketing sucks, and not because they don't make a good product. I'm ambivalent about Palm's stuff, but other people, like my father, is absolutely fanatical about his Palm gear.
My guess is that HP, like Apple, sees computing appliances as the death knell for general purpose computers. They want to make sure they're still around for awhile.
That would be if facebook buys palm.
Instead of the iPaq, we'll have the iPom.
But the article basically explains why anyway. The majority of mobile platforms are Linux based, and keeping WebOS strengthens the Linux ecosystem. And objectively, driver support is where most of the issues are going to come into play. Between RIM, iPhone OS, Android, and WinMo, the market is already too fragmented for anyone hoping to reach everyone with a single native application to do so. What's going to be important is what you can plug into your phone (monitor, keyboard, printer, flash drive, etc. ) Apps are icing on the cake, and browser apps for the most part can get all the functionality of a native app. And given that the majority run Webkit, you can even get away with not testing on too many platforms. (Screen size and dimensions are the bigger issue anyway.)
The author does state in the article that he was mistaken about the amount of resources HP has, which amounts to at least $25 billion USD in cash on hand, at least 10x more than HTC and Lenovo (the other big Palm suitors from the past week) have in cash.
When compared to the other major companies in the mobile space, like Nokia, RIM, HTC, or Motorola, Palm seems like a very 'cheap' purchase in order to acquire an entire new line of business, along with their entire patent portfolio.
Additionally, it seems other articles mention the same patent concerns since Apple is now going after HTC (but not Palm).
http://www.businessinsider.com/apples-htc-patent-suit-could-be-another-reason-for-someone-to-buy-palm-2010-3
http://www.engadget.com/2009/01/28/apple-vs-palm-the-in-depth-analysis/
www.google.com
WebOS is a fantastic OS from a user perspective -- the card metaphor for multitasking is very intuitive and the whole design of the interface is easy and elegant and *fun*. It would be a perfect fit for that tablet thing HP is working on.
I have a Pre and despite a few issues with battery life and a wish for a larger screen I think it's a great phone. Most information about the phone is provided by members of the computer press who are too lazy and entranced by their iphones to bother giving the matter any serious thought.
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The best thing that can be said about this is that it's a really bad investment to pay a billion dollars for Palm. HP is showing a lot of guts in refusing to accept the presumptive Apple vs Google conflict as the definition of the mobile computing war. Generally I would say that HP doesn't have the corporate culture to be anything other than a big irrelevant company like Dell, but if they keep taking big risks and standing behind them that could change. Most likely they will fail, but it would certainly make the next decade more interesting.
I have seen the future, and it is inconvenient.
In some of the news reports on this, I saw repeated references to the fact that "webOS can scale" or something to that effect. I don't know too much about webOS vs. Android vs. Chrome, but my guess here is that HP is buying Palm for tablets and MIDs, not for smartphones. I doubt HP has much desire to go against the HTCs and Samsungs of the smartphone world in hardware, and they're not naturally a software company (a la Google and Microsoft with their respective mobile OSs).
More likely, I would bet, is that HP has doubts that Android will scale well to tablets (current offerings in the market notwithstanding), with their relatively higher computing power than phones, and their experience with the Slate is probably indicating that Windows 7, despite being a good desktop OS, is not scaling too well down to the netbook level and below. Thus, they might be leaving open the option of pushing a tablet/MID level of computers based on webOS to compete with the iPad on iPhone OS.
And, if that doesn't work, as others have said, Palm has both a valuable name and lots of talented employees that can become HP's mobile arm, thus allowing them to have their asses covered and prevent shareholder panic.
They are able of the best and the worst at the same time: Their old COMPAQ laptop division who's now called Elitebook are in the top best machines. But their consumer branch (Pavillon) are the worst machine ever made. They have a good marketing, they are everywhere and everybody use their product but not many people loved them. When you have warranty the service is great but if you don't and it is a common issue, they will deny the problems, and wait for a court order before making a recall which they will fix by putting exactly the same flawed part. I have tons of broken HP machine coming to my office and it is always a well-known common problem. They make good printer, but they load their half working driver with crap, spyware, crapware... They also are responsible for the ink markup, they encourage customer to buy a new printer every time the ink runs out. They spy their competitor and their customer. I don't know where they are going with palm, I don't even know if it will be for better or worst....
When I was a young buck working my first developer job in college Compaq had the best little handheld ever created...it was the iPhone of 1998...it was iPaq. It ran Windows CE, which is shit today because it's hardly changed since 1996. However, in 1998, it was amazing. We developed some software for them (and the customers went with $4000 ruggedized B&W models as opposed to the $500 or $600 iPaq, which was awesome. HP bought Compaq, started making the iPaq with cheaper and cheaper parts. it got shittier and shittier and slower and slower and Microsoft focused on bastardizing it into a phone and HP said meh. Then iPhone comes along (which I have and love btw), and everyone's like, oooh, it's never been done before, well arguably not as good, but still, iPaq as a bad-ass machine in its day and HP fucked it...guess what they'll do with Palm, who it could easily be argued beat out iPaq only to fuck themselves with incompetence. While I'm at it, fuck Android...bring on the flamebait. The irony of the parallels between the phone computer was between Apple/iP* and Google/Android and Apple and Microsoft back in the day is clear. Microsoft copied from Apple and released an open, but shoddy platform. Google is copying from Apple and releasing an open, but shoddy platform. I may be alone here, but I hope Apple wins this one. I'm sure I'm alone in being excited about actual innovation coming out of Redmond with Windows Phone 7...but it looks like their glossing over some clunkiness (typical).
Posit:
The HP buyout offer was announced after the closing bell yesterday - $1.2bn, or $5.70 - and after-hours trading traded $PALM around $5.88.
Proposition 1: The only reason someone would pay more for these shares than the tender offer is if they think another offer is coming, and the last time I checked, the only other interested party was Lenovo.
Proposition 2: I anxiously await a bidding war between two desktop manufacturers for control of $PALM, a company with a beautiful, technologically sound, poorly managed OS. Why? Because they *also* own Be's old technology - a beautiful, technologically sound, poorly managed OS.
Proposition 3: To properly modernize BeOS, whoever buys them should work cooperatively with the Haiku project for things like, say, Wi-Fi or USB, and in return offer Haiku patent amnesty under $PALM's patent-folio umbrella.
So, who do I want to win? Neither, really, since whoever buys them will focus on the handsets alone and neglect the fact that they FRICKING OWN BE, INC., and thus an opportunity to develop a netbook-OS that doesn't suck.
HP's attempts at open-source relations have been like a high-school backseat tryst: HP climaxes early, loses interest immediately and leaves the eager and supple open-source community sexually frustrated, so to speak. Lenovo has been, at best, benign and neglectful. They at least offer the open-source alternative to Windows on their hardware, but it's not exactly advertised, and because M$ subsidizes hardware with OEM buy-ins, it's actually more expensive an option.
Perfect world option: I'd like to see Google buy them, incorporate the niceties of WebOS into Android, and what's useful from Be's 15-yr-old OS be merged into ChromeOS. Competitors would cry foul but, come on, Android phones already outsell Palm phones, and both are dwarfed by Apple and Blackberry
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There is no way that it would be worth 1.2 billion just for a couple of ok-but-not-thrilling phone bodies(and the patents, while nice, probably won't change HP's world too much; because they are already big enough to be locked in the Patent Cold War with all the other major players who have both patents and products).
If they didn't want WebOS, they wouldn't have bothered.
Seriously, did the article writer not read ANY of the readily available information about the purchase?
Possibly he was too busy wanking off onto his Android, as he is apparently a MASSIVE Droid Fanboi.
However, had he actually read up on it he would have noted that HP is MASSIVELY interested in WebOS. Particularly in bringing WebOS into the TABLET market to compete directly with the iPad. Hell, the HP execs practically reached through the internet and slapped us all silly with their enthusiasm for WebOS on a tablet!
Of course, there is also the fact that while HP had a very strong showing in the early days of smart phones, their recent offerings have been very lackluster. With HP acting as partner and "sugardaddy" to Palm, Palm can begin to put out some really impressive smartphone offerings, along with HP offering the fantastic WebOS on an HP tablet. It's a great combination, and the WebOS platform has a great future ahead of it.
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I think there's two possibilities. Either way, HP's management sees that there's a serious shift to mobile computing happening, and that they really need to get in on it if they want to remain a big player. But the big question is whether or not they have a plan to do this.
Possibility #1: HP wants to try to make decent mobile computing devices, and they think that they've got the best chance to be successful if they can control both the hardware and the software. That's Apple's strategy, and it seems to be working well for them. While I understand the benefits of what Google's trying to do with Android, the ability to fully control both the hardware and the software and fine tune how they interact makes a lot of sense. The WebOS seems like a pretty decent pile of software, so why not use that as a starting point?
Possibility #2: HP has no idea how to effectively compete in the mobile market, so they're just buying something that at least at one point had some hype and potential, and hoping that someone comes over in the deal that can give them a clue.
Either way, with the aforementioned shift to mobile computing definitely occurring, 1.2 billion dollars for Palm seems to make some decent sense for HP.
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There is no evidence that Android and its model – a free ubiquitous operating system running on a plethora of devices – will ever dominate the profitable end of the market. That’s a commodity market where being adequate and low priced is what it takes. Free and open doesn’t mean success in consumer markets. Linux on the desktop anyone?
Apple has demonstrated very well the advantages of a tightly integrated optimized stack especially in mobile devices. They and RIM together account for the great majority of the profits accrued in the entire cell phone market. Apple’s personal computers are far more profitable than generic PCs.
I see HP wanting to go up against Apple in the mobile device space using Apple’s own business model. Why would they care to enter an Android market where it’s so hard to differentiate themselves? If they want to push volume with low profit margins they already have that with their PCs. Do they want to repeat that? I doubt it. They’d end up losing to the Koreans and Chinese.
Palm has been successful – technically – producing devices coupled to operating systems that offer significant consumer value. What they lack is capital. They also lack a Steve Jobs figure – a visionary willing to take risks who isn’t answerable to anyone in the short term. (He has his track record to back him up.) Will HP identify or hire such a visionary and then will they give that person the freedom to execute on their vision? If they do they will be a formidable competitor to Apple. If all they offer are some technical skills, capital and manufacturing capacity, then they will be competing in the lower less profitable tiers with the likes of HTC, Motorola and Nokia.
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Post back when you actually *try* to write a complex WebKit app that runs well on all the webkit platforms unchanged. WebOS / Android / iPhone Its a sheer and utter fantasy that because its "WebKit" its "write once run everywhere". Maybe someday, but not today.
I see this more as a move to back up the tablets they are making, than an attempt to get into mobile (though they also have that now as well, with shipping phones to support and enhance).
Android is not as well suited to the tablet space, exactly because of the physical buttons (the Pre has one physical button like the iPhone).
The issue is that with the larger form factor of the tablet, physical buttons become awkward to hit. Also what side do you put them on - with a tablet it can make sense to use it in any orientation, but the more buttons you have to hit the harder they are to find when you need them, and Android has that menu button you have to use often while using apps.
The buttons android offers make a lot of sense in something that is always held the same way in the hand, but doesn't scale well to larger form factors.
One example.
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Although John Gruber is one of the worlds biggest Apple fanboys (and can, therefore, be a tad biased at time) he hit the nail right on the head with this post called Herd Mentality.
In short, the only way to win is when you control both the hardware and the software. Companies who do not, generally get locked into a price war with little to nothing else to differentiate with.
Why be another Android purveyor when, if you get it right, you can be something much bigger and better? Of course, whilst owning both means you get a chance to win, it doesn't mean you can't lose (as Palm has shown).
Granted, HTC have done well, but they're still ultimately constrained by third parties who may or may not share HTC's best interests and aspirations.
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Vanilla Android isn't cutting it, so everyone has to brew their own "secret sauce"
I don't think it is necessarily a negative to be able to provide customized experiences across carriers and devices. *shrugs*
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Actually HP has a long history with Unix, both HP-UX and Digital's Unix product. They also have a long history of producing handhelds. This is a really smart move for them, if it works. Right now, they have this iPad-like thing, which is really cool, but only runs Windows, which, frankly, isn't going to be that great on it, and has been a failure in the same market for years. Now they have Palm OS, which is actually a really great product, despite its failure to capture the hearts and minds of enough customers. This means that they are in position to make a genuine run up against the iPad. Plus, they can throw out the x86 cpu in their tablet and replace it with an ARM CPU that will perform better and suck much less battery power.
So yeah, this is a really smart move, and I'm excited to see what they do with it. HP has a lot of management that's skilled at foot-shooting, but if they can get over their cultural tendency towards NIH and really invest in this product, it could be pretty cool.
I thought the same thing initially but then I thought about it a little more and found one way it could work. HP obviously just doesn't know how to make/market mobile devices (see the puny sales from Jornada and iPaq) so just slapping Android into an iPaq isn't going to help.
Instead, buy Palm who is actually pretty darn good at it and give their management and engineering teams gobs of money and marketing muscle to work with. Then buy out of the Sprint exclusivity and they got a chance to move some phones.
On the other hand, if Palm disappears into the HP borgness then it'll likely be mismanaged to hell by the same people who've failed for a decade to do anything meaningful in the mobile market.
I agree but Vzw must have been working for a quite a while on getting the license for "Droid" from LucasFilm. Notice that the original Droid was a Motorola but the Droid Incredible is from HTC, so Droid is a Verizon brand. I'm pretty sure Palm wouldn't want their "splash" phone to have a brand they don't own and Vzw probably wanted their first Droid phone to be just "Droid" not "Droid Pre".
Next is AT&T. Yeah, they are going to risk the wrath of The Steve cutting off their money-truck. Notice that AT&T doesn't have much beyond Blackberries competing against the iPhone. The Android OS devices are nerfed and WinMo 6.5 is obviously end of life.
So that leaves Sprint. It's bigger than TMobile, seems to have more advertising dollars for devices, and has a history with Palm.
Soooo yeah. It was the best thing that Palm could pull off.
I've been on slashdot so long I'm starting to get out of touch with the cool stuff if it ain't on slashdot.