HP-Palm Poses Serious Threat to Microsoft, Google

What does it say when the No. 1 PC maker in the world bets $1.2 billion on an unproven OS as the future of its mobile strategy? It says to Microsoft that HP is ready to move beyond Windows, at least when it comes to consumers, and that’s a very dangerous thing when your bread and butter is licensing your software. HP is among eight companies expected to release smart phones running Windows Phone 7 by the end of the year, but I doubt it will remain very committed to that platform now that it has webOS under its wing. The even bigger threat to Redmond: what HP does with its new prize beyond smart phones. And that's not the only platform this acquisition is likely to impact.

HP has had a wandering eye before, including its Linux-based Mobile Internet Experience for netbooks (now found on select Windows machines as an instant-on environment) and TouchSmart, a finger-friendly platform that runs on top of Windows. But this is the first time HP has taken such a drastic step in embracing a Windows alternative, which signals that the company wants to control the hardware and software components of the equation. This model has worked for Apple and RIM, but not very well for Palm thus far.

Nevertheless, this deal represents a strong opportunity for HP to help consumers forget about the Glisten and be taken seriously in the smart phone space. With better marketing and the cash required to aggressively expand Palm's product portfolio, HP could easily increase its share in the U.S. from 5 to 10 percent in short order.

What's more intriguing, though, are the possibilities beyond smart phones. HP has been very clear that it's targeting not just handsets but the connected mobile device market. That means tablets. The upcoming Slate will still likely include the resource and power-hungry Windows 7, but webOS could be a much more attractive alternative for HP going forward because it's optimized for touch, multitasks well, and has a small but growing library of apps.

HP hasn’t had the best track record when it comes to mobile acquisitions. When the company acquired Compaq, it managed to successfully integrate Compaq’s products into its business computing lines, but HP failed to keep the iPaq brand relevant. The more recent purchase of Voodoo has been a mess, with very little left of the Voodoo brand or its “DNA.” In order for webOS to succeed, HP needs to be aggressive in providing resources, but be more patient as well.

And then there’s Android. HP continues to dabble with the OS in smartbooks such as the Airlife 100, but the fact that the company has no plans to bring it stateside speaks volumes. It has also been reported that HP is working on a 6-inch Android tablet. However, yesterday's announcement could have pushed this project to the back burner.

Will the potential lack of HP's support for Android in favor of webOS really hamper the former's momentum in the smart phone market? Definitely not. Just look at HTC, which just forecast record-breaking sales on the back of Android. However, services that run on top of Android, such as HTC Sense and Motoblur, may not be able to keep up with iPhone, BlackBerry, and, yes, webOS, all of which give their parents more flexibility in terms of developing more deeply integrated user experiences—without running the risk of being a step or two behind the latest version of the stock OS.

More importantly, while Android tablets are expected to proliferate, most of the models I've seen just look and feel like bigger Android phones. (The Notion Ink Adam being a notable exception.) And many of these devices lack access to the Android Market. With the backing of HP, webOS has a good chance of gaining a foothold in the tablet world simply because it's still so wide open.

Of course, there are no guarantees that HP's gamble will pay off. Smart phone shoppers have voted with their wallets that they prefer Android, BlackBerry, and iPhone to webOS. And, at least for now, Apple’s iPad basically owns the tablet market. But if HP makes the most of its new asset and can execute compelling hardware designs while helping to jumpstart the platform's developer ecosystem, Microsoft has reason to worry. And Google has reason to watch it’s back.

Editor-in-chief Mark Spoonauer directs LAPTOP's online and print editorial content and has been covering mobile and wireless technology for over a decade. Each week Mark's SpoonFed column provides his insights and analysis of the biggest mobile trends and news. You can also follow him on Twitter.

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