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HP Bails out Palm

There was a time when the Palm Pilot was very nearly a Xerox machine, a Kleenex, Google or maybe even the iPhone. It defined the category -- back when "PDA" still meant public display of affection to a lot of people, Palm Pilot meant handheld electronic organizer. The thing was the category.

Of course, that has all changed over the last couple of decades, and Palm hasn't been able to keep up with its smart phone competitors, particularly Apple. So, this week, a company that might be able to keep up with Apple snapped up Palm: HP.

It's a $1.2 billion deal, and it brings HP lots of patents from Palm, not to mention a couple of new lines of Palm phones. Of course, our thinking here is always the same -- if Palm was going under, what makes HP think that it can save Palm, or use its technology to seriously break into the smart phone game? In other words, how are two companies that are struggling in the smart phone business (HP actually has a phone called iPaq -- who knew?) going to combine to take down Apple, the vendor that's dominant in the market?

This sort of acquisition always seems a bit like the blind buying the blind. Still, HP is a company with lots of resources and, like Microsoft, when it really wants to get into something it will dive in with little hesitation and lots of cash. That's a strategy that's been known to work before in this industry. Will it work well enough to justify and outlay of $1.2 billion and a heck of a lot of integration costs? Only time will tell.

But we'd be remiss if we didn't tip our RCPU hat to Palm, that child of 3Com that was an innovator and trail blazer that finally petered out. We have a feeling that the Palm brand will survive (seriously, iPaq?), but it's hard to imagine that it'll ever regain the identification value it had in the 90s. HP probably doesn't care about that, though, as long as Palm brings some market share and some revenue.

What was your first handheld device? What's your take on HP's place in the smart phone market? Send your answers to lpender@rcpmag.com.

Posted by Lee Pender on April 29, 2010 at 11:56 AM


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