HP buys Palm: What it means

Mrs. Claypool, a rich widow lacking old-money pedigree, attempts to buy her way into high society by becoming a patron of the opera. To facilitate her class-seeking endeavor, she hires a consultant called Otis P. Driftwood. The effort turns into a comically destructive disaster in the Marx Brothers' classic, A Night at the Opera.

I was reminded of this silly scenario reading about HP's purchase of Palm (hereby dubbed H-Palm). It's clear (at least to me) how much HP wants to become Apple (ironic since HP had once employed both Steve Jobs and Steve Wozniak), a one-stop hardware/software product maker. By grabbing Palm, HP hopes to paw its way into mobile-device relevance, both with a tablet PC and back into the cellphone business I'll bet you didn't even know they were still in.

I'm not saying HP is Margaret Dumont and Palm is Groucho, but buying your way in to any highly competitive situation rarely ends well. Here's what we can expect.

The Quest for OS

HP execs have made it clear they covet Palm's webOS, the operating system behind the Palm Pre and Pixi smartphones. As a hardware maker, HP lacked the wherewithal to create its own OS, which means they had to buy one. Quick.

Why? In the face of the iPad's success and rumors of an Android tablet on the way, HP knew it had to get in on the tablet game fast. However, the iPad is a hit not as a productivity device, but because it's the ultimate time-killer. HP must have realized that Windows 7 is totally inappropriate as an entertainment-centric mobile platform. This stark reality is made even more apparent as Microsoft itself has realized this (finally) and is readying a radically revamped mobile version of Windows 7 due this fall.

Now that it has webOS, HP is likely to follow through with its Windows 7 Slate tablet. But I suspect its intro will be half-hearted, sans the fanfare Slate might have gotten pre-Palm. From now on, HP will be all about webOS.

The Coming webOS Tablet

WebOS certainly has the coding gonads to compete with iPhone OS 4 and Android. But H-Palm has a narrow window of opportunity. iPad currently has the fun tablet field to itself at least until the fall when an Android tablet is likely to debut. H-Palm has to conjure a webOS tablet this year or risk falling too far behind. But beyond a short hardware development/software integration time frame, H-Palm also will have to goose third-party app developers and expand beyond webOS's mere 2,000 apps.

More importantly, H-Palm has to grok why iPad is an unqualified success. It can't get into a spec war with Apple (in case you haven't noticed, Apple touts what their gear does, never how it does it), and it has to avoid marketing its webOS tablet as a netbook replacement. It has to bring something uniquely H-Palm to the tablet table to clearly differentiate it from Apple and Android. As Rocco opines on the odds of successfully whacking Hyman Roth in The Godfather, Part II, "Difficult, not impossible."

The End of iPaq

HP has the hardware rep, distribution and marketing muscle to get a webOS tablet onto store shelves and into our consciousness. But getting back into the cellphone business will be trickier.

Carriers still control distribution — even Apple couldn't get the carrier it wanted (Verizon). Neither Google nor Palm could make much headway against iPhone with arguably better phones, so HP will have to do more than simply create a webOS iPaq.

Given the time it will take to develop a new H-Palm webOS phone, it probably makes sense to wait until LTE has a foothold, forge a partnership with Verizon, and beat Apple into the market with a 4G phone (which probably will happen June 2011).

And H-Palm will have to get rid of the "iPaq" moniker — people are likely to confuse it with Apple's iEverything — and avoid the failure connected with the Palm name.

But no matter how smart H-Palm plays its webOS hand, everyone knows it's the Mrs. Claypool of the mobile-device business. H-Palm may become a metaphorical nouveau-riche patron of the opera, but that doesn't mean it'll understand the libretto, be able to avoid a disastrous performance, or get Groucho's jokes.