Palm deal will overhaul HP's tablet OS strategy

The acquisition of Palm's WebOS changes the scene

Hewlett-Packard's purchase of Palm could redefine the PC maker's mobile OS strategy, potentially impacting the company's reliance on Microsoft operating systems.

During a recent conference call held to discuss the acquisition, HP executives said they would take advantage of Palm's WebOS software platform as a driver to grow not only in the smartphone business, but also in internet-connected mobile devices such as tablets and slates.

"The tablet-slate products are such new markets, we see opportunities broadly for consumers," said Todd Bradley, executive vice president of Hewlett-Packard's Personal Systems Group. Bradley is one of serveral former Palm executives now working for HP; he joined HP in 2005.

HP primarily uses Microsoft operating systems for a number of its mobile devices. The company also offers iPaq mobile devices based on Windows Mobile.

It is also considering Google's Linux-based Android for tablets. The company already offers a low-cost laptop called Airlife that runs on Android in Europe.

With the Palm acquisition, HP could be hoping to own the end-to-end product, similar to the way Apple has successfully delivered the software, hardware, application environment and even content for the iPhone and iPad. HP could be able to stock WebOS with a suite of customised, web-based applications for tablets that fit its content delivery model, analysts said.

HP's iPaq handhelds based on Windows Mobile weren't successful and put the company behind its competitors, says Dan Olds, principal analyst at Gabriel Consulting Group.

But it is too early to predict whether HP will pull the plug from its partnership with Microsoft, says Jeff Kagan, a wireless industry analyst. HP gets a good asset in WebOS around which it can experiment, but it may keep its options for mobile devices based on Windows and Android.

"Companies don't want to have to have all their eggs in one basket," Kagan says. "HP wants to get their hands on as many OSes as possible."

HP may segment its mobile OS offerings depending on the customers, says Roger Kay, president of Endpoint Technologies Associates. WebOS is mostly a consumer play, while Windows on mobile tends to appeal to enterprise customers.

HP's Bradley only vaguely said that the company would retain its strategic partnership with Microsoft in the conferecne call, but said it would provide granular details on its road map as the transaction with Palm closes.

The analysts have high hopes that HP has the potential to make Palm successful.

"HP could foster that market better than Palm could," Olds says. HP has the resources, distribution channel and consumer base that Palm lacked, and HP could provide the resources to further develop the WebOS for integration into devices. There are more than 2000 applications designed around Palm's OS.

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