Greg's Bite: Want to buy Palm?
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Greg's Bite: Want to buy Palm?

Posted by Greg Mills

I was somewhat taken back by the news that HP has pulled the plug on the TouchPad, so quickly. That the Palm OS smartphones and computer business were also cut by HP means the shake out of the mobile computing market is beginning in ernest. A massive shift to tablets is underway and when I say tablet, you can read that iPad.

That HP is planning to spin off its computer business is interesting as it was only 10 years ago they bought Compaq for $US25 Billion and became the largest computer maker in the world. Markets change and HP sees the mobile computing business gutting the conventional PC business and with the Palm/TouchPad disaster, they decided to cut their losses.

Apple has been sucking the air out of the room with the magical tablet no one else can match and people are discovering they can live without a PC or laptop. Certainly, there are still applications where a PC or laptop is better, but those situations are slowly being resolved by further developments in the iOS.

WIth the collapse of Nokia's MeGo, Symbian being phased out, the Palm OS being discontinued by its owner HP, the marginal mobile operating systems are dropping like flies. RIM's tablets and handsets are failing to gain a foothold and RIM's proprietary OS may be even more marginalized. Microsoft's Mobile OS 7 has so far failed to take off and may be the Mobile OS of last resort. Microsoft has still not launched a decent tablet OS.

The two major mobile OS platforms, the Google Android and the Apple iOS are locked in a bitter fight to dominate the mobile market. At this point, Microsoft is content to gather the crumbs and hope Apple can fragment Android enough to give them an opening. That may just happen. Can you recall major companies having products banned from import due to patent infringement before the Android lawsuits?

HP has taken steps to acquire a British Software company called Autonomy for $US 10 Billion and move into a software mode. I have read nothing about the highway robbery priced ink cartridge business. Presumably, they will continue to give away inkjet printers and then gouge us for the ink.

The problem for HP is that the PC business is so cut throat, they were only making something like 6% on computers anyway. When they saw the PC sales numbers begin to fall and Apple taking up the slack with iPads they couldn't match, the decision to cut the losses early makes sense. Dell and the other PC box companies can scramble for the market share HP is giving up. It is likely some PC company will buy HP's computer business but the big question is, will they make money when HP couldn't?

Who is going to buy the giant money churning, low margin HP computer business and who wants even wants the Palm OS? Ironically, the problem with the TouchPad isn't so much that the Palm OS isn't any good, it is that a mobile platform takes a lot more than just a good OS to make a mobile platform viable. There has to be a solid developer community, development software and an app store that delivers money to developers. Apple is so far ahead you can't even see their dust anymore.

Apple got such a head start, it took the likes of Google with a giant pot of money to catch up with the Apple app store and developer programs. Had Google covered all the bases with patent coverage and had been able to avoid infringing Apples patents, it would have turned out much different than what seems to be happening now.

I expect to see the Android platform further fractured. Recompiling the Android OS will likely orphan handsets and break apps. Consumers are already wanting to go with iPhone and iPad. Apple need only not stumble, as the competition is crumbing. Taking computer market share by default and punishing Android handset makers is beginning to work. Apple is on a roll... That is Greg's Bite


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