HP will acquire Palm, Inc.

Being the techno-type that I am, this notice by HP of their intent to acquire Palm, Inc (makers of the original PDA, the Palm Pilot) caught my eye. HP is apparently going to pay about $1 billion in cash for the struggling handheld computer manufacturer.

Palm got itself into position for a turnaround last year, when it released a sleek, new touch-screen smart phone called the Pre and fresh operating software for it that won good reviews. But consumers still were slow to embrace the Pre and its newer, smaller sibling, the Pixi.

In the most recent quarter, Palm sold just 408,000 phones — down 29 percent from the previous quarter.

By comparison, Apple sold 8.75 million iPhones during its most recent quarter.

HP hopes Palm’s webOS operating system, which runs the Pre and the Pixi, will help it participate more aggressively in the fast-growing market for Internet-connected mobile devices. HP has a line of phones called the iPAQ, but it had one-tenth of 1 percent of the worldwide cell phone market last year, according to IDC. HP shipped just 100,000 units.

Against Blackberry and the iPhone, neither HP nor Palm stood a chance. I had one of the early Palm Pilots and it was truly a helpful device. They just didn’t keep up in terms of features and performance, however, and the advent of the smartphone (which is really the coupling of a PDA with a cell phone into a single device) pretty much killed the market for a standalone PDA overnight. Palm’s attempt to enter that market with the Pre was a good try but way too late to the market to overcome Blackberry and Apple’s lead. (To say nothing of Nokia and Motorola.)

HP can dump a pile of cash into development and they have the computing manufacturing ability to put a quality product on the market, if they choose to do so. We’ll have to see how bad they want it.

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