HP Bought Palm to Lure Corporate Mobile Users, Not Consumers
Ever since HP (HPQ) announced that it would buy beleaguered Palm (PALM), people have wondered about the new industry dynamic. Among other questions is whether HP can now successfully take on Google (GOOG), Apple (AAPL), and RIM (RIMM). But I think that may be an unintentional distraction. The big potential for HP is a mobile system naturally integrated with enterprise computing and networking.
At the acquisition announcement, HP executive vice president Todd Bradley called the acquisition "a transformational deal in the connected mobility market" that will fuel company growth. Mobile has certainly taken off. And yet, there is already considerable force in the market. RIM still has a significant lead, Apple has grown in bounds, and Google has quickly caught up. Nokia (NOK) has introduced its N8 that runs the new version of the Symbian operating system. Furthermore, Microsoft has released its Kin phones and has Windows Phone 7 slated for debut late this fall.
But much of the attention is on consumer models. Microsoft has said that Windows Phone 7 will be incompatible with Windows Mobile 6, screwing enterprise developers. Apple has made some successful efforts in selling iPhones to corporate users, but hasn't made a full assault. Even RIM has focused attention on the consumer market.
That leaves a potential market gap for a company that could create solid corporate-oriented mobile products. HP with Palm is a perfect match. Last fall, HP acquired networking company 3Com. It already has an extensive footprint in corporate data centers and on desktops. Plus, HP has its consulting arm bulked by EDS. Now HP can boast a product line that can not only extend to all parts of a corporation, but that can offer integrated mobile services that IT departments can program using regular Web technology, which means they can leverage existing knowledge and save time and money while getting applications ready.
Will HP look for the consumer market as well? Of course. It has great name recognition and extensive relationships with distributors and retailers. But the corporate mobile angle would give it a clear differentiating strategy and a natural market.
Image courtesy HP