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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

April 28, 2010 at 2:13 PM

HP buys Palm, so much for that Windows 7 iPaq

Hewlett-Packard may have the oomph to revive Palm, which it bought today for $1.2 billion, but it’s going to cost the company some good will with its No. 1 software partner.

HP is jumping into the mobile OS business as Microsoft gears up to launch its great hope for the same market, Windows Phone 7, along with its own line of consumer “Kin” phones.

HP has also been a loyal customer of Microsoft’s mobile operating systems used on the iPaq line of handheld computers, the latest versions of which are smartphones running Windows Mobile 6.5. (Here’s the new iPaq “Glisten” for AT&T).

ipaq.jpg

In its announcement, HP Executive Vice President Todd Bradley made it clear that HP’s going after Palm’s operating system to “create a unique HP experience spanning multiple mobile connected devices.”

In other words, it’s spending $1.2 billion for an alternative to Windows on its mobile devices.

Do I hear the wind howling outside, or is that the sound of yelling in Redmond, traveling across the lake to Seattle?

Maybe it’s a Gulfstream warming up at Boeing Field, to take Steve Ballmer and his checkbook to RIM headquarters in Ontario.

When I asked Microsoft for comment, a spokesman provided this statement:

“HP is a strategic partner and will continue to be so for Microsoft.”

Here’s Bradley’s full quote in the release:

“Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices. And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”

How many leaders will there be in the smartphone market?

(Note: HP said it’s paying $1.2 billion for Palm, but some are calling it a $1.4 billion deal. That’s because HP factored in Palm’s cash to come up with an “enterprise value” or purchase cost of $1.2 billion. The $1.4 billion figure is derived by multiplying HP’s $5.70 per share offer by the number of Palm shares.)

Comments | Topics: Gadgets & products, HP, Microsoft

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