HP “Doubling Down” on Palm’s webOS
So Palm (PALM) finally found a buyer. Earlier this afternoon, Hewlett-Packard (HPQ) said it would acquire the beleaguered company for $1.2 billion in cash.
Why? Why spend $1.2 billion on a company whose downward spiral has been the talk of Silicon Valley for the past year?
For a number of very good reasons (which I outlined in an oddly prefigurative post last week), but one above all: H-P wants its own operating system. And by acquiring Palm that’s exactly what it’s getting. The steady refrain during my conversation with HP execs this afternoon, “We’re very excited about webOS … We see great potential in webOS … We’re going to double down on webOS.”
In Palm’s webOS, H-P has an elegant OS that it controls, something the company — a longtime Windows shop — has never had before. And with it, it can begin untethering itself from Microsoft and differentiate its brand in a market in which most devices not sold by Apple are all running some variant of Windows. Remember, webOS is scalable. And while Palm lacked the means to scale it, H-P does not. It’s one of the biggest tech companies in the world, and once it brings its engineering acumen and marketing heft to bear on the OS, my guess is we’ll see it evolve into a much larger platform that extends beyond smartphones to tablets, ultraportables and other connected devices. And H-P, for the first time in its history, will be firmly in control of both its hardware and software.
Will it succeed? Who knows. But it’s worth noting that Apple’s done quite well for itself pursuing a similar model…
As Daring Fireball’s John Gruber wrote last year, “Operating systems aren’t mere components like RAM or CPUs; they’re the single most important part of the computing experience. Other than Apple, there’s not a single PC maker that controls the most important aspect of its computers. Imagine how much better the industry would be if there were more than one computer maker trying to move the state of the art forward.”
Well, now there is. As H-P’s Jim Burns said during a conference call today, the company plans to boost R&D spending on webOS. “We’re going to increase it,” he said. “And we’re going to increase sales and marketing as well. We’re going to take this platform, which today exists for smartphones only, and make it much broader than that. … We are going to be investing heavily in this business in the next year.”
Clearly, H-P is intent on taking webOS to the next level. Mark my words, today is the beginning of a new HP ecosystem — smartphones, connected devices, apps and the OS that ties them all together.