HP's Plan for Palm

Wayne Rash

When Hewlett-Packard announced its intent to acquire the long-suffering Palm, Inc., last month, it was clear that there was more involved than just expanding HP's limited, and listless, smartphone line. There's no question that the iPaq was stranded in the digital equivalent of the Sargasso Sea, and that Palm's smartphone line would jazz things up, but it was also clear that there was more to the story.

At the time I suggested that HP could use Palm's WebOS in their much-rumored Slate tablet PC instead of the Windows 7 it was being shown with. Palm's software was much better suited to the portable touch-screen environment than Windows, and it would be much more competitive with Apple's iPhone-derived iPad.

Turns out I've underestimated HP.

In a conference call with investors this week, HP's CEO Mark Hurd discussed his plans for WebOS, and they go far beyond mobile devices. In reality, Palm is part of HP's plan for global domination. In reality, it appears that WebOS will, in one form or another, be the core of much of HP's device software in products that don't need to run Windows. In other words, you can expect your Web-enabled printer to be running WebOS in a year or so.

The Slate, meanwhile, has morphed into a new device, currently codenamed 'Hurricane,' that will run WebOS and that will likely ship soon after HP closes on the purchase of Palm. This will give HP a device that competes directly with the much-hyped Apple iPad, complete with a well-designed touch screen and a similar form factor.

But there's a huge difference. HP has been selling enterprise-grade tablet computers for years. Some analysts estimate that as much as 10 percent to 15 percent of the company's portable computer sales are tablets, mostly being sold into vertical markets such as healthcare and insurance. These tablets run Windows, and because of the necessary infrastructure are heavier than the iPad and the batteries don't last as long.

With a Palm-based tablet, these problems go away. Now Palm can field a tablet computer that's thin, light, has great battery life and is enterprise-ready. This means that HP can take advantage of its existing tablet market, and its existing enterprise market, to sell tablet devices. In addition, it can leverage the same platform for a consumer product that competes directly with the iPad.

For Apple, the competition against HP isn't necessarily a good thing. There was a time, for example, when Apple made the top laser printer around. Then HP made a strong entry into that market. I don't need to tell you how that came out.



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