A recent BBC piece makes some factually incorrect and outlandish claims about the history of the smartphone. It boggles the mind that an otherwise excellent news organization gets this so wrong. It’s the sort of thing you get when a lazy (or stupid?) journalist appears to us a bad Motorola commercial as their source.
HP announced that it will make WebOS an open-source project, and expects to make new hardware to support it sometime in 2013. What hasn’t been determined is what licence they will use, and that determines how “open” it will really be. Ideally, it would be either a GPL-type licence or a BSD/MIT-type licence, allowing some degree of latitude for developers. It could, though, end up with more a more restrictive “shared source” licence like Microsoft’s typical approach. What I don’t expect is that it will be like Android’s “open” licence, in that some releases are only available to select licensees prior to general availability (much like new major releases are only available to a particular handset maker until the device is released), given that HP is likely to be the sole hardware manufacturer for the short-term.
Is this a good idea? Sure it is. Let’s face it: the Palm assets aren’t worth all that much, and there aren’t an enormous number of buyers for yet another mobile operating system. Consider, too, that RIM may come up for sale, and any players looking to get into the mobile market may be holding their breath to see when RIM and the Blackberry assets become available. I would expect the thinking is that a company with more than zero market share is more tempting than one with none.
An open source future for WebOS may give it an outside chance at a long-term future, and a potential seat at the mobile table. For now, the world has consolidated around Android and iOS, and going up against them is going to be very, very hard for the next couple of years. But, the longer-term is still uncertain, and there is no guarantee that the mobile space is going to shape up like the PC space. The success of Linux in the server room may act as a motivator here: it came out of nowhere a decade ago, and now can claim 20-25% of the overall server market, and as much at 60% of the space for servers facing the public (web servers, DNS servers, mail servers). But, there is a cautionary tale here: Linux has made virtually zero impact in terms of desktop share, primarily because it lacks one key ingredient, Microsoft Office, which would allow it to play in the PC space. A similar challenge faces WebOS: without a viable ecosystem, any technological or cost superiority (real or perceived) is moot.
To succeed, WebOS would need to find a way to not only build a rich ecosystem, but provide some means for people to switch for minimal or no cost. Smartphone and tablet users, particularly iOS users, are investing a lot of money in their apps and content. Leaving iOS means abandoning some or all of that investment. It may not be necessary to give all of the replacement content for free, but offering discounts (like some way to repurchase the WebOS version of an app for really, really cheap) might make it easier for people to switch over. What we probably won’t see is the “I have to upgrade, so why not buy something new” that is likely helping MacOS. Unlike on the desktop, upgrades to apps are generally free (there are exceptions, but those are pretty rare). For a PC users, if they have to buy an upgrade to Office, or they want to buy new games that are available on both Windows and MacOS, moving to the Mac isn’t as big a deal, cost-wise, because they have to spend the money anyways (buy/upgrade software for their current PC, which needs replacing anyways, or buy a new Mac along with the replacement software). Buying what amounts to a perpetual, lifetime upgrade takes away that opportunity for change.
The other question mark is the tablet space. It is only about 2 years old (ignore the Windows Tablets, they didn’t sell enough to even mention), and while the iPad is still far ahead in terms of sales and marketshare, the landscape is still in flux. The recent arrival of the Kindle Fire may have an impact, and in the short term I fully expect it will. What will remain to be seen is if the Fire’s initial enthusiasm has momentum, and if the Fire is a device that people buy exclusively, or if it is one they buy to augment their iPad. There are a lot of iPad owners with regular Kindle eReaders, so it may shape up that there are lot of people who buy the Fire alongside, rather than instead of, an iPad. The key for any new tablet is, again, ecosystem: apps and content. Either that, or really, really cheap (witness the success of the TouchPad fire sale).
In the end, though, HP has nothing to lose and more to gain by making WebOS open source. It may be enough to encourage developers to experiment and build apps for the platform. There may be handset makers out there that want some freedom from Google and Android (from what I’ve heard, it isn’t all roses and sunshine for the handset manufacturers), but don’t want to build their own platform. An open source WebOS is a long-shot, in terms of success, it has a non-zero (but very small) chance. Shutting it down and writing it off would have reduced that chance to zero.
With the current presence of the Dell Streak, the current or impending release of the Samsung Galaxy Tab (depending on your market), the rumoured announcement of a BlackBerry tablet (supposedly named BlackPad), and HP’s announced intention on getting into the tablet market, there is excitement in some quarters of someone challenging the iPad in a market that Apple has had largely to themselves for the moment. HTC, Acer, Asus and others are expected to join the party over the course of the next 12 months. What most of them will lack in terms of a unified ecosystem with something like iTunes, they will gain with different features and a lower price. Not everyone cares about having access to a store like iTunes. The Android Marketplace and Blackberry App World are slowly starting to build their inventory, and Windows-based tablets have a fairly large available library (although not one generally suited to lightweight mobile computers). Depending on who you listen to, the iPad may have cut into netbook and even notebook sales, and additional choices in the market can only make it harder for the traditional mobile computing platform for the past few decades.
But even with all of these entrants, who are likely to thrive and not just survive? I don’t expect a “winner” here. Except for Windows and the iPod, you just don’t see one vendor dominating a particular market segment so thoroughly, but that’s a topic for a different discussion. What I expect is that consumers will have a choice of tablets, with varying sizes and features, and the market will be spread amongst many players, albeit not necessarily evenly.
I would expect Android tablets from mainstream names to do fairly well. Companies like Samsung and HTC have a strong history in portable devices, and they have the experience and facilities to be able to trim costs and keep up with demand. PC makers like Acer, Asus, and Dell aren’t complete strangers to portable computing, but none have had great success in smaller devices. Dell’s entry and then exit and re-entrance in smartphones and highly mobile computing, and other’s attempts a nontraditional PC-type devices makes them a question mark. Of the group that are the best known, brand-wise, I would say that Samsung and HTC have the best chance of thriving in the tablet market. They have access to distribution channels that can get the product in front of many types of consumers, being able to use both big-box retailers like BestBuy and Walmart, as well as mobile phone-oriented stores to display and sell the devices. Acer and Asus have a presence in general purpose electronics stores, but their main claim to fame has primarily been price. In this market, they are up against pretty stiff competition that knows very well how to shave fractions of a penny and still keep decent product quality. Dell has never really succeeded outside of their comfort zone of desktops, laptops and servers. They have tried in the past with PDA’s during the peak of the PDA market (and exited without much success), and dabbled in MP3/media players with limited results. I fully expect Dell to try, but unless they see a huge jump in demand, I expect they will quietly leave and stick with what is still working for them.
HP and RIM are a pair of dark horses in this game. HP has had long experience (but spotty success) with Windows Mobile devices. Their acquisition of Palm, thus gaining WebOS, comes with a lot more risk than reward. They have a platform that, while technically respectable, has had mediocre results from both a sales and 3rd party developer community point of view. For myself, as an early developer in mobile apps, I’m not any more encouraged to try building for WebOS now that HP has it than when it was run by Palm. HP will kill off products that aren’t selling well, or don’t fit within strategic goals. Ask any developer for HP’s MPE-based systems, or any former DEC developers that saw their operating systems axed when HP realized they had too many. HP paid a lot of money for Palm, and I expect them to give it a go. But with yet another API and environment for developers to build for, I can see WebOS continuing to have issues trying to build a 3rd party developer base. Developers are, by and large, going to target the biggest markets, and WebOS just isn’t there.
RIM is a slightly different story. Their entire business is mobile devices, and they still have a respectable installed base for their BlackBerry devices. Where RIM has struggled is in the retail market. While App World isn’t bad, it doesn’t have anywhere near the selection that Android Marketplace has, let alone the monster iTunes App Store. RIM still seems to be struggling with how to run a curated app store, given the markedly different comments I’ve seen on their own forums about the approvals process. RIM has also not done a great job in preserving the life of their old devices, mainly by not keeping them up to date with the latest version of BlackBerry OS. While most Android phones will run the latest and greatest version, and Apple only recently starting to abandon the first generation iPod Touch and iPhone, both camps have made an effort to put off orphaning products as long as they can, something RIM really hasn’t done. Unless RIM can somehow get a handle on the retail market, without losing touch with their enterprise base, RIM could find themselves on the outside looking in on tablets.
Basically, the trend as I see it is that the most success will be for those already familiar with the retail market, and already familiar with building highly portable devices. Apple, HTC and Samsung have experience and success with both. Dell and HP have done well in retail, but really has never had much luck with anything outside of PC’s and servers. HP’s bigger challenge is using an OS that hasn’t had widespread adoption, and doesn’t show any signs of that changing. RIM has done well in the enterprise, and they do understand the issues around highly portable devices, but they still don’t seem to get the retail market.
Unless they see success, I can see Dell pulling the plug on the Streak in 12 to 18 months. HP will likely soldier on for a year or two, then start to kill the product by simply not releasing many models, until it disappears out of apathy (much like their Windows Mobile devices did). I can see RIM continuing to succeed in the enterprise market, and those sales should help prop up the retail side for a while.
What I’m not saying is that you will only see Samsung, HTC and Apple tablets at BestBuy. As with notebooks, media players, televisions and digital cameras, there will always be a number of vendors selling something. What I expect, though, is that majority of the sales will be split in some way between those three. I expect others, like Sony and Toshiba, will try to play at some point, and it’s possible they may have some success. But of the major players right now, Apple, HTC and Samsung have the greatest chance of success and setting the tone for the tablet market initially.
I was reading an article today on a World without Google on the TECHi site. The author’s main arguments is that, without Google, things would have been very different for Yahoo!, Microsoft and Apple, and the Internet in general. I have some issues with their assertions.
First: Yahoo! I’m not sure why the author included it, since they didn’t posit a different world for search without Google. Yahoo! was the search leader initially, and their search was quite good initially (since their first search databases were built by hand, with people deciding the classifications rather than trying to automate it, the results seemed to be more aligned with the search terms. The model wasn’t going to scale, but it was a good start). So, what would search look like without Google? Possibly more fragmented, with business being split more evenly between Yahoo!, Alta Vista and other search services. Yahoo! may have avoided the transformation into an “all things for all people” portal, since it wouldn’t have needed to differentiate itself as much as it felt was necessary. Its possible that some other firm may have been able to step up to the plate to dominate. Alternatively, we could have seen more use of search aggregators like DogPile taking the lead, suing advertising as a revenue stream and paying the search engines for their data.
The author’s next discussion is Microsoft. While Google has had an effect on Microsoft’s direction, I think it is naive of the author to assume that Google has done much to Microsoft on their core business: Office and Windows. Office is still far and away the leader in business suites. Windows still owns the desktop and SMB server market by a wide margin. While that market may be shrinking, it is doing so very, very slowly, and mainly to small businesses and home users. The bulk of IT spending is expected to be on Windows-based system and Office, and will be for some time. For e-mail and group communications, Microsoft’s biggest competitor to Exchange is Lotus Notes. For companies in regulated industries, service like Gmail aren’t even on their radar.
It is true that Microsoft has stumbled around quite a bit on Internet-related services, but they were doing this when Yahoo! was still the leader. Microsoft also had a chance to keep the mobile market they had taken away from Handspring (and subsequently Palm), but Google had nothing to do with Microsoft losing that. That event occurred because a company out of Waterloo, Ontario offered a superior product that met the needs of the business community. The rise of the iPhone next, and the subsequent rise of Android, have exasperated that situation, but Google didn’t put Microsoft there.
Even without Google, cloud computing and Software as a Service (SaaS) would still have done what it has done. Amazon did more initially on cloud computing, and firms like IBM and Oracle did as much for SaaS as Google did. Google may have bought its way into the shared video space, but it still has yet to have an answer to Facebook or Twitter. Gmail is nice and all, but without them, we would still have Hotmail, MobileMe and others. Google provided a better service, but they didn’t fill a void, they just built a better experience.
The author’s last assertion was that without Google, Apple (or at least the iPhone) wouldn’t be doing as well. Google has had a minor role in the success of Apple. Apple’s resurgence has more to do with the return of Steve Jobs and how he has set the course for Apple than anything Google did. Yes, the iPhone had Google Maps and YouTube. But, without Google, some other firm would have provided map services, and YouTube would have been a success without Google (and likely had still been on the iPhone). Besides, most people didn’t buy the iPhone because of Maps and YouTube. People bought the iPhone for a whole host of other reasons. Google’s presence has helped, but its absence wouldn’t have been missed.
There is no question that Google has been a force in the IT world. Google is staffed by some very, very smart people. But, the only 2 substantial things Google built on its own that still sustain the company are search and ads. Android has potential, but it could still stumble if handset makers decide to abandon it in favour of their own homegrown systems (unlikely, but guys like HTC and Samsung continue to toy with the idea). Google’s fate in the mobile space is largely out of their hands. Google bought into the shared video space with Youtube, and mobile advertising with Admob. Google buys a lot of companies all the time. In many ways, what Google has done is to scare other companies into doing things, more than doing things on their own. Yes, Google built Android and Chrome. But Android is still lagging, and for better or worse, is having to deal with the spectre of fragmentation because of the rapid release cycle for the OS. Chrome has yet to see the light of day as anything but a public prototype (calling what was released a beta is being generous), and pre-announcing it this far in advance simply makes living up to the hype all that much harder.
Google’s biggest risk is if their ad business suffers a setback or collapses altogether. That is their only substantial revenue stream, and without it, I could foresee a firesale of all of the assets Google has accumulated over time if their cash pile runs low. If anyone wanted to try to take down Google, this would be the way to get them: take away the bread-and-butter. That will be hard, given a lot of the ad revenue comes from the search site itself. But no company is invincible (just ask IBM about that one).
Going back to the premise that things would be very different without Google: I’m not convinced this is the case. Like nature, business and innovation both abhor a vacuum. Without Google, other companies would have stepped in to fill the voids. It may have resulted more many different companies rather than one, monolithic company like Google. The complexion of the Internet and related services may have looked different, but it would have been substantially the same as it is today.
HP announced today that it is buying Palm for US$1.2 billion. For more details on the deal you can see articles on MarketWatch or the Globe & Mail or any number of news sites. For investors, it seems like a good deal. The price is a 23% premium over the stock price (as of close Wednesday), and its in cash. For Palm and its products, this is a good deal, at least in the short term. But what will this really mean for Palm? Does this help them in their quest to rebuild their marketshare? What are the pitfalls that will be faced along the way?
On the positive side, becoming part of HP provides Palm with the deep pockets it needs to keep going, at least for a little while. It gives them access to technology and manufacturing resources on a larger scale than they previously had. With HP’s resources, the deal means that the Palm product team can branch out, and look at applying the webOS technology to other devices, not just phones. It gives them access to HP’s sales, marketing and distribution channels, and it adds the HP name and reputation to their negotiations with wireless operators when working out sales and distribution deals. HP has a lot of experience in the retail space, and knows what it means to compete on price, volume and features.
There are some negatives that I see. First, they will have to deal with the corporate behemoth that is HP. Politics, new processes and integrating a team that is used to being smaller, leaner and more autonomous will have some impact, and I expect that some senior staffers will be heading for the door. HP will have executed key-man agreements with critical staff, and will try to make it worthwhile (monetarily) to stay. But the Palm team will have to deal with an organization that is larger, moves slower, takes longer to make decisions and where politics and “who you know” will come to bear.
Second, HP will get involved with product decisions, both good and bad. Look at Voodoo PC as an example of a smaller organization being swallowed up. It brought HP’s infrastructure to Voodoo’s aid, but it also has made their products a bit more “corporate” and they seem to have lost their edge. HP has, in some ways, cheapened the Voodoo brand by trying to apply it to other-than-Voodoo products, things that Voodoo probably wouldn’t have bothered with on their own, because it didn’t fit their market. Expect something similar to happen with the Palm products over time as well.
I would also expect HP to try to target the Palm handsets into the corporate market, which means taking on RIM and Blackberry on what is essentially their home turf. There is still a certain amount of Windows Mobile in the corporate world, plus a handful of others like Android, but Blackberry is the king at the moment. HP does have the channels and the access, but their various forays with the iPaq line didn’t go as well as they would have hoped. It wasn’t that their products weren’t good. Some of the problem stems from using Windows Mobile (I’ll be honest, I had nothing but grief with my forays into WinMo for PDA’s and phones, so that colours my views a bit). But some of it comes from HP being in a market they probably don’t really understand. HP’s share of the smartphone market is essentially non-existant when compared to Blackberry and the iPhone.
In the short term, though, this gives Palm a shot to at least try to build a presence in the market, and expand their market beyond phones. Their challenge is that the North American smartphone market appears to be solidifying a bit, with the lion’s share around RIM and Apple, and with Android on its way to being a serious 3rd player as the number of handsets sold continues to grow. Globally, its Symbian, RIM and Apple, with Android on its way up. WinMo and Palm have been losing ground, both in North America and globally. HP may slow or even stop Palm’s slide, at least for a while. But as people cast their vote with their wallets, there may not be room for 6 players. HP, as big as they are, may not be able to change that reality.
I read an article this morning on Ars Technica that said that Lenovo was the last apparent suitor to buy Palm. What go me thinking was an assertion the author made toward the end of the piece that said “At some point, though, the me-too Android handset makers are going to want to differentiate themselves, and they’re going to wish they had a mobile OS that would let them do that.” The writer goes on to say that, if these handset makers don’t get Palm, they would have to “launch a brand new smartphone OS in the face of stiff competition from powerful incumbents.”
Does the author really think we need yet another mobile operating system? Is the operating system the only way to differentiate their products? PC makers seem to do just fine, being able to differentiate themselves in various ways while still selling machines that primarily run Windows. Car companies have been able to carve out different parts of the market, all of them using the same basic technology to move the machine. Electronics manufacturers have been able to differentiate with TVs, DVD players, etc. without requiring unique TV broadcast protocols or media formats just for their products.
Trying to build a new market for a new smart phone OS is an enormous undertaking. It isn’t the technical challenges of writing the software. Its the bigger challenge of attracting developers to build the apps, and obtaining the licences to provide content. The reality is that smart phones are about content (music, video) and applications. Its the same basic reason that Windows is so far out in front in terms of PC operating system marketshare. The operating system, by itself, doesn’t mean much without tools to make it useful. But, if the installed base for an operating system is too small, or the operating system itself doesn’t appear likely to survive, then attracting developers to build for your operating system becomes a difficult undertaking. Its the same reason why many developers stay away from the Mac: the market isn’t big enough yet for them to incur the cost and risk to build their applications for the system. As the Mac market continues to grow, it attracts existing Windows developers to include it in their plans. It has taken a long time and a lot of money from Apple to make this possible.
As a lesson in this, look at the iPhone. You’ll notice that Apple didn’t release an SDK for 3rd party apps at launch. Part of this may have been technical. However, it appears to me that Apple wanted to wait until the iPhone installed base was “big enough” to attract developers, particularly significant names like EA. The SDK didn’t come out until there were several million iPhones and iPod Touches out in the market. It also helped because it also meant a community of buyers who were clamouring for apps beyond the basic ones that came with the phone. It built demand and a market that justified the cost and risk associated with building apps. Apple also did this at a time when they only really had Symbian and Blackberry as competitors (Android wasn’t out yet, and both Palm and Windows Mobile were diminishing rapidly).
To try to repeat that now would be a very, very difficult undertaking, and one that requires far deeper pockets that most of the so-called “me-too” handset makers would have. Samsung could possible pull it off, given their available resources and their presence in the Asian market. I doubt that HTC could pull off something on its own, simply because it doesn’t have the financial resources to do it. I would even have my doubts about Lenovo making a go of it, even using Palm as the starting point.
The demise of Palm I think is inevitable, and I don’t see a new mobile OS coming up to be a major player in the market. People are starting to pick their sides. As they become more dependent on content that is locked to their device, and as they come to reply on the apps they have, it will be harder to get customers to switch from one handset family to another. The inconvenience, for most, will outweigh any benefits (real or perceived).
This isn’t to say people won’t switch at all. However, the drive to switch will have to be based on something very compelling. For example, people have abandoned VHS for movies, and moved to DVD, because the image quality was so much better, the form-factor of the media more convenient and you don’t have to worry about rewinding, tape jams or cleaning the drive heads. The jump from DVD to Bluray, however, is going much slower, simply because for most people, the difference isn’t enough to justify the higher price or replacing their video library again. The same goes for businesses running Windows: even if the software they need is available for the Macintosh or Linux, the cost of switching (software, hardware, IT training) and the risk is enough to deter them from doing it.
While we aren’t there yet, I can see a day soon where people won’t want to switch from one mobile OS to another, simply because it means re-purchasing all of their apps, and they may have to live without some apps, because they aren’t available on all operating systems. Right now, the barrier to trying to bring a new OS into the mobile space just seems to be too high, and is getting higher every day. To even consider or suggest it seems folly to me.
Palm’s spiral around the drain continues. It’s sad, really, given how wonderful their first products were. I had a Palm Pilot Pro, which I upgraded to a Palm V. I also had a couple of Treo’s, a Palm Tungsten C and a Lifedrive. All served their purposes well (although the one Treo provided through an employer used Windows Mobile, and it wasn’t terribly impressive). Things looked promising for Palm when the Pre was introduced. But the oddball ad campaign, the lack of apps and supposed reliability problems all seem to have contributed to a less-than-stellar sales and adoption rate.
One of the scenarios that the pundits are discussing is Palm as an acquisition target. The question is, though, who would want to buy them. The buyer would depend on the scenario. I see 4 different motivations for buying Palm:
- An existing smartphone manufacturer figures its cheaper and faster to remove them as a competitor.
- An existing smartphone manufacturer needs to boost their current product line, and wants to build on WebOS and other technologies in the Palm portfolio.
- A company that isn’t in the smartphone business wants to get in, and Palm could jumpstart that for them.
- A private equity firm wants to buy it, strip it and flip it.
There is a sort of variant on #1, where an existing manufacturer wants to kill two birds with one stone: get Palm’s technology and remove them as a competitor. In this case, though, I see the primary motivation being removing a competitor. Getting the technology is an added bonus to the deal. The same could be said of #2, but again the primary motivation in that case is the technology. Removing a competitor is a happy side effect.
Removing As A Competitor
The obvious candidates for this are Apple, RIM, Nokia or Google. Other companies like HTC, Motorola, Samsung and Sony/Ericsson could, but that could indicate they are trying to strike out on their own, moving away from Android or Windows Mobile. That is certainly possible, but I think it would be a significant gamble at this stage.
Of the 4 most likely companies, Google is probably the prime candidate. I don’t see Apple or RIM doing this, simply because they are most likely confident enough in their own products that they expect Palm to simply wither and die on its own. Google, however, likes to buy companies (their acquisition list is truly impressive), and they do seem to buy plenty of companies, and then not do anything with them. They could pick up Palm for a low, low price, and work to migrate the modest Palm user base to an Android phone, most likely the Nexus One.
According to a Bloomberg article, HTC is rumoured to be the leading candidate. I’m not sure what HTC gains from this, given that they already have a reasonable hardware family, and they currently have 2 operating systems they support (Android and Windows Mobile). I don’t see how adding a 3rd system makes sense. It might make sense if HTC is looking to move away from Android and Windows Mobile and strike out on their own.
Boost Existing Product
I think the strongest candidate in this one is Nokia. Their product has been losing ground to iPhone, Blackberry and Android. Symbian hasn’t really grabbed the mindshare that the other 3 have, and Nokia will need to do something to stay the big dog for a little while. Personally, I think that buying Palm and using WebOS as the base for a new Symbian would only forestall the inevitable, but at least it might keep Nokia competitive and allow the smartphone market to be a 4-horse race (I’m not convinced Windows Mobile will recover, leaving the market divided between Symbian, iPhone, Blackberry and Android). There is a real risk that Symbian could eventually go the way of Windows Mobile: once a dominant force, but no longer.
Microsoft has just released Windows Mobile 7 Series, so I really don’t see them trying to incorporate WebOS into it. It’s too soon. Dell’s mobile platform is too new, so there’s no real need to boost it either. None of the other major players need a technology boost right now.
A New Entrant To the Market
This one is trickier, because sometimes there are companies that are looking to change or branch out, but you don’t expect them to. A long-shot here would be someone like IBM, Lenovo, HP or Asus. HP has a history of building PDA’s, and could want to get into the smart phone market to fill out their nascent mobile platform suite (currently consisting of netbooks and a rumored tablet). Asus has been building a variety of netbooks, and this could get them deeper into the mobile computing space as well. This could be a play for IBM to expand their enterprise reach, by putting enterprise access in someone’s pocket.
A way-out-in-left-field possibility is Oracle. Buying Sun indicates that Oracle would like to branch out a bit, and getting a piece of the mobile space might help expand their portfolio and possibilities. The WebOS would also seem to fit with Oracle’s desire to have devices and services run off of a large, cloud-like back end.
Buy It, Strip It, Flip It
This last one is more about delaying another company from achieving one of the previous 3 goals. There are any number of private equity or other firms that might look at the Palm assets and decide they are worth more individually than they are as a single, whole company. I could see companies that fit into one of the first two categories deciding to wait to see if someone comes in just to break up Palm. In this way, someone looking to get some of the Palm technology could just pick off the pieces they want, without having to buy the whole thing (and try to integrate/assimilate the entire company).
Can Palm Be Salvaged?
Of course, I would expect Palm supporters to ask why a 5th item wasn’t on the list: saving Palm. I’m just not sure that is a viable outcome. There are too many other players with better marketshare and deeper pockets. Palm’s recovery started in a promising fashion. They are hampered by a few factors. They are caught by the fact that app developers only have some much time and so many dollars. Developers are going to target their resources at the platforms that give them the best probability of decent sales, and Palm’s user base is just too small and isn’t growing fast enough. The WebOS technology doesn’t really have an “ecosystem” around it. The iPhone, Blackberry and Android phones all come with a larger environment (particularly the iPhone) and one or more compelling features that, once a person has them, are unlikely to abandon.
To truly succeed, Palm would need to spend an enormous amount of money (that it doesn’t have), and even that would be a long-shot bet. The smartphone market is still maturing, but the key players have jumped out to an early lead. One former heavyweight (Windows Mobile) has largely been marginalized, and pushed aside quite quickly. The barrier to the smartphone market has been raised quite high, and I don’t see Palm having the wherewithal to get over it.