HP snaps up Palm

Computer giant HP looks all set to move into the smartphone market after snapping up Palm for $1.2 billion.

In the end, all those rumours about Lenovo buying Palm came to nothing, as last night it was revealed that HP will be the acquiring troubled smartphone manufacturer that's been in financial difficulty for several months. The firm's success was initially based on its PDAs, but Palm never really managed to get ahead in the smartphones market, with far-from satisfactory sales.

Musical chairs

For a bit of background: Tom Bradley, Vice President of the Personal Systems Group at HP, was the CEO of Palm in 2003. It's therefore a company and a brand he knows only too well. That's not all though, as John Rubinstein, current CEO of Palm, is a former HP employee, before leaving to join Apple and then Palm. He isn't said to be leaving the company, but no news of his new role has yet been released.

Buying Palm should help HP tap into the successful and profitable smartphones market. In fact, smartphones are the only products in the sector to have seen steady and maintained growth, and they're the only type of product that allows mobile manufacturers to maintain a decent profit margin.

Web OS on a tablet PC?

As one of the world's first computer manufacturers, HP vaguely dabbled in the professional smartphone sector with its iPaq, a kind of pocket-PC launched in partnership with Microsoft, who provided the operating system. HP perhaps sees Palm's Web OS as a great opportunity to launch a whole load of new web-connected portable devices, from smartphones, to netbooks, to Internet tablets and more. And, given that HP is also set to bag itself Palm's patents, all this could allow HP total independence from Microsoft operating systems.

HP will almost certainly have to invest in product research and development and revamp the marketing strategy of the Palm brand and its products. This should help create stronger links with manufacturers, who are all currently eating out of the hands of Apple, BlackBerry et al.


> Stay tuned for our tests of the Palm Pixi and Pre Plus.

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