A Intelligent Phone Partnership? Palm And HP

Despite grandfathering the concept of smartphones with personal digital assistants, Palm hasn’t been doing so well lately – so the Palm HP buyout that has been announced this week couldn’t come at a better time. Palm is getting a $ 1.2 billion instant cash for their handset designs, intellectual property, and operating systems.

HP purchase saves faltering Palm

The partnership of HP Palm could not have been better-timed. Despite receiving standing ovations and excellent reviews for its new operating system and web browser, Palm has been struggling. A design that was a bit frustrating combined with slow sales meant Palm’s revenues are falling. In its latest filing with the SEC, Palm even outlined this problem as “slow sales of the company’s products, which has resulted in low order volumes”.

HP’s plans for Palm

The HP Palm purchase has been questioned by some Wall Street investors. Paying over $ 5 a stock for a business with a $ 1 stock in 2008 seems a little odd. However, Hewlett Packard has plans for the Palm operating system. In the HP Palm purchase announcement, Hewlett Packard announces that it wants to “create a mobile ecosystem” that “leverages enterprise connections”. The translation of this is that HP might be distancing itself from Windows as it enters the tablet and mobile markets.

Will HP Slate run the new Palm OS?

Though HP has been a strategic partner with Microsoft for a very long time, HP might very well be using the HP Palm partnership to get a new operating system. There are doubts that Windows 7 could be “lightweight” enough for the HP Streak. The Palm OS was designed for a phone, so it would be a good match for the soon-to-be-released Streak 3. Using the Palm OS would keep HP from being beholden to Window’s release regulations. Palm and HP partnering may create a phone maker that could challenge Apple.

HP Palm to merge in July

The HP Palm purchase is not yet approved by all regulatory agencies. The merger needs to be approved by the stockholders of palm and US regulatory agencies. Around the end of the third quarter, in July, HP will merge with Palm if it is approved.

Article Resources

HP Press Release

Palm SEC filings

ZD Net