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Electronics Production | May 04, 2010

HP’s acquisition of Palm to impact tablets, not smartphones

HP’s recent announcement of its intent to acquire smartphone maker Palm is another example of a PC maker fortifying their competitive stance in the ultra-mobile device market, states market researcher IMS Research.
Based on HP executives’ statements, Palm’s webOS operating system appears to be one of the core assets that HP plans to integrate into its mobile device portfolio. IMS Research expects HP to employ webOS in its tablet line-up in favor of, or in addition to, offering a Windows 7 model.

Anna Hunt, IMS Research’s principal analyst and author of Impact of Connected Tablets on the CE Market, stated, “HP’s upcoming Slate tablet was originally expected to run Windows 7 OS, although using Windows 7 would translate to a higher cost to the consumer and could mean more strain on the processor.”

Ms. Hunt adds, “The tablet market will likely see devices at sub $250 price points within a year’s time, therefore suppliers must be very aware of lowering costs while maximizing performance and end user experience.”

Once optimized for the tablet platform, webOS may enable HP to grow an applications ecosystem competitive to Apple OS and Google’s Android. Chris Schreck, market analyst at IMS Research and author of The Evolution of Smartphones, states, “WebOS is an extremely easy platform for apps developers. It uses standard development languages already extremely common among PC developers. If HP can create a compelling tablet offering that people are willing to buy, the barriers to entry for developers might be fairly minimal.”

Roughly 1000 applications have been developed for webOS, most of which may not scale up well to a larger tablet screen. In 2009, Palm’s share of the smartphone market was approximately 1.2%, while Apple’s iPhone OS accounted for 14.3% and Android approximately 3.3%.

HP may also be considering a play in the smartphone market, although Palm has not had significant success competing against the likes of Apple’s iPhone, RIM’s Blackberry and Nokia’s portfolio. There are numerous notebook makers, including Dell, Lenovo and Acer, which have recently entered the smartphone market, although they have yet to gain any real traction.

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