HP Closes Palm Deal, Looks Set For Showdown with Apple
A done deal since the end of April this year, HP (news, site) has just announced that it has completed the acquisition of Palm for US$ 1.2 bn continuing HP’s growth in the smartphone market that is now estimated to be worth US$ 100 billion.

This is the second acquisition by HP in this market in recent months -- it bought Melodeo, a Lala competitor last month -- but Palm’s WebOS platform was the real target of the buy-out and will put it in direct competition with Apple (news, site) when it ports it to its upcoming tablet devices.

HP And WebOS

In a statement issued by the company HP confirmed its plans for WebOS:

Palm will be responsible for WebOS software development and WebOS-based hardware products, from a robust smartphone roadmap to future slate PCs and netbooks."

Former Palm CEO Jon Rubinstein will report now to Todd Bradley, executive vice president, Personal Systems Group, HP and will be responsible for WebOS software development and WebOS based hardware products, from a robust smartphone roadmap to future slate PCs and netbooks.

Palm Pre with WebOS.jpg

Palm Pre with WebOS
 

Last January, HP showcased its new tablet called Slate running on Windows 7 at the International Consumer Electronics show and while it has not confirmed it, there are reports that it has dropped the idea of running it on Windows 7 with speculation that this is one of the areas that would best suit WebOS.

HP And Mobile Devices

WebOS has been good and bad for Palm. By the time it had developed and released WebOS last year, it was clear that it had fallen behind Apple and other rivals in this space with revenues coming in well below expectations and a buy-out needed to ensure its survival.

Enter HP and its ambitions in the mobile market. At the time the HP deal was originally announced in April, Todd Bradley outlined HPs plans in the mobility market, which have been apparent for some time, but confirmed during the of the acquisition announcement.

The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share . . .Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market,” he said

And WebOS is a key element in bid to be the biggest. The combination of HP’s global scale and financial strength with Palm’s WebOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets, Bradley said.

HP And Melodeo

But WebOS is not the only mobile space where HP is flexing its muscles. Late last month it announced its acquisition of Melodoe, which streams music to its mobile apps from the cloud.

Details of the deal were not disclosed but the amount paid was reportedly in the region of US$ 30 million, a relatively paltry sum compared to the price paid for Palm.

However the real significance of the deal is that it moves HP into a space that until now has been largely dominated by Apple, notably mobile music services. With Melodeo, HP got the NuTsie’s service which scans iTunes playlists and gives users access to those lists and is available to Blackberry, Android and Windows Mobile.

With the upcoming release of NuTsie 3.0, users will be able to take entire music collections from desktops and put in into that cloud as well as giving users the added ability of picking a single piece of music on demand (the current version only allows users play shuffled playlists).

More importantly, combine this with WebOS and you’ve a really attractive mobile package. There are no indications at the moment of further acquisitions to bolster its mobile offerings, but if HP is really serious about the mobile market -- and it appears to be -- then watch out for a lot more action in this space over the coming months.