Does HP + Palm = Facepalm?


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 was wrong on the last point, because I'd forgotten how big HP is these days (thanks to @sogrady for gently putting me right on that - I obviously still have HP mentally filed in the box marked “printer companies”). As its balance sheet shows, it does have pretty serious resources (although I'd be grateful if some financial wizard could explain to me why it has $33 *billion* of goodwill on its books when Apple, by contrast, has only $480 million).

HP may have the dosh to go up against the likes of Apple, Google, Microsoft and Nokia, but is that a good use of its shareholders' money? It's true that HP will be able to use the underlying webOS operating system for trendy tablets and other form factors. But do we really need another platform? If computer history shows anything, it is that fragmented markets always sort themselves out into one or two leaders, with everyone falling into line – or getting out.

We face the prospect of Apple, Google and Microsoft fighting hard to establish themselves as leaders in the tablet world, which doesn't seem to leave much room for anyone else. It's hard not to feel that as for the smartphone sector, Android would have been a better bet, since that would have allowed HP to tap into the growing ecosystem that is forming around this stack – including what will presumably be a large set of varied apps.

Of course, the good news for open source is that it doesn't really matter whether HP's move proves deeply wise or totally witless. Both Android and webOS have Linux at their heart, and both use additional free software (that found in the latest webOS includes ALSA and webkit elements.) In that sense, the lifeline that HP has thrown to Palm and hence webOS is good news: more resources will be expended on making key parts of open source better.

So what are people's views? Will the new HP+Palm combo prove the start of an exciting new HPalm era? Or more of a facepalm moment?

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