HP’s Palm Purchase: I’m Not A Believer

Initial comment on Hewlett-Packard’s agreement to buy smartphone maker Palm is surprisingly positive. It seems that a lot of people really want to believe the combination of the two will make a credible bid to unseat Apple.

I understand that, as I am also one of those people. But I have to say it’s a long shot, and I doubt it will come off.

Why HP+Palm could rock…

For some people, it’s all about the money. HP is very rich, and has a lot of strength in the enterprise market. The Financial Times says the deal will “propel Palm into [the] mobile big league”.

Palm developed a very good mobile operating system in WebOS, but failed to sell it effectively, resulting in tons of smartphones mouldering in warehouses. Now, with HP in charge of sales and distribution, what could go wrong?

People with longer memories can find other things in favour of the merger. Hewlett-Packard was once an exciting company with a great engineering heritage. Some sites report that Todd Bradley, the potential CEO of HP, was previously boss of Palm and has already brought in people from Palm and Apple to HP.

Sites that back the merger point to the fact that HP has done mobile devices, and has plans for a tablet device. We’re on the cusp of change in mobile devices, and need a good iPhone competitor (though we are getting bored to the backteeth saying that phrase). With the right backing, could WebOS be that operating system?

HP is already toying with Android and Windows Mobile for its devices, but both have problems as iPhone rivals.

Android may suffer a setback with a legal attack from Apple on the leading Android device maker, HTC. Android is also in danger of fragmentation if you believe reports, which won’t help now the Apple monolith spans across phones and tablets. Google’s hands-off approach, combined with the open-source mindset, could produce versions of the OS that are so different Android will lose any synergy it and consistency it might have had.

Windows Mobile still looks like a looming disaster, from which HP now has a chance to extricate itself. Too late and too Microsoft, HP will be well out of that, and able to do its own thing with its own OS.

… and why in practice, it won’t

But really, all this is just cock-eyed optimism. Fundamentally, deep down, HP simply does not have a clue about consumers.

Apple mistreats and exploits consumers, but lures them in, by giving them stuff they want. HP on the other hand, thinks there is no need to do that. Everything it does for consumers takes no notice of what they want.

HP’s phones have been simply what HTC and Microsoft pushed towards it, without any design or thought from HP, and they have been utterly miserable and uninspiring.

HP once came close to selling an MP3 player, at a time early in the life of the iPod when Apple was vulnerable. The company’s then CEO Carly Fiorina allowed Apple to totally shaft HP, by agreeing to sell an HP-branded iPod, which Apple strangled at birth by undercutting it and applying restrictions to the way it could be sold.

HP does sell laptops to consumers, of course, often using its Compaq brand and in competition with Dell. We use a lot of them in this office. But laptops are different from phones. People have lower expectations of them and, frankly, HP lives down to those expectations. They do what you expect, they are good value, but has anyone ever said “look at my laptop – it’s an HP”?

The one sector where HP really interacts with consumers in a big way is, of course, the printer sector, or we should say, the printer ink sector. Here HP rapaciously exploits consumers, uses copyright and patents to block out competition, and makes, from all accounts more money on printer ink than any other sector of the company.

Look at what HP does right now. Imagine the internal strife and turf wars as it absorbs Palm. Imagine what might come out when the dust finally settles. Do you see any likelihood of an iPhone killer coming from the company?