While no one was looking, computer-making giant HP snatched up ailing smartphone maker Palm for $1.2 billion.
The move makes perfect sense: HP has virtually no presence in the smartphone market, at a time when rival Dell is just starting to dip into mobile phones, and as Apple is making huge profits on the iPhone. Teaming up with a company that has critically-praised software is a good way for HP to get up to speed.
Palm, meanwhile, is losing market share, despite the availability of two relatively new phones, the Pre and Pixi, on Sprint, Verizon Wireless and soon AT&T. An analyst estimated last month that unsold inventory of Palm phones exceeded 1 million units. Palm company was reportedly looking for buyers earlier this month, but the situation started looking grim when an HTC source told Reuters that it wasn't interested.
Judging from the press release, it seems that HP is very much interested in WebOS, and not so much the Pre and Pixi. The Palm Pre is only mentioned once in the announcement, and only by Palm chairman and chief executive Jon Rubinstein, but WebOS is mentioned numerous times as Palm's great asset. The current line-up of phones have been praised by critics for the operating system itself, but flawed hardware -- most notably weak battery life -- and a tiny app marketplace have held the phones back from greatness.
What does all this mean for consumers? I'm guessing HP will look to introduce new devices based on WebOS, maybe even tablets considering that HP's upcoming slate seems held back by Windows and Intel Atom. And as the world's largest PC maker, HP has the muscle to invest in expanding and marketing WebOS, which could draw more developers to its app store, in turn making the platform more attractive.
However, neither company has said much about what HP plans to do with Palm. Hopefully we'll hear more in the coming days.
