Can HP create its own mobile destiny with WebOS?

An obsession with multitouch, a gaping product hole, and a desire to own key technology all justify the Palm purchase -- if HP learns to drive

The other shoe has dropped. After months of reports on Palm's financial woes and then its putting itself up for sale, Hewlett-Packard has agreed to buy the iconic PDA maker that flamed out so painfully in the smartphone era launched by Apple's iPhone, a victim of internal obession with endless reorganizations rather than product innovation. A few years ago, Palm brought in ex-Apple exec Jon Rubinstein, a respected and innovative technologist involved with the iPod and other Apple hits, and the fruit was WebOS, a competent but largely copycat mobile OS that never stood apart in a meaningful way from the iPhone. Google's Android ended up stealing any thunder WebOS might have had.

But the purchase won't necessarily save Palm -- it's been bought before by 3Com, after all, only to be spit out in even weaker condition. At first, HP seems an odd choice -- it's not in the mobile business, after all.

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Why the other suitors likely pulled out
Other rumored suitors were in the mobile business and had plausible use for WebOS: HTC could have become independent of Windows Mobile, now in a funk as the world awaits Windows Phone 7, and of Google's Android, an increasingly fractured platform that runs the risk of being as meaninglessly ubiquitous as Java, with its 1 billion phones and thousands of versions, but no app community.

Nokia also could have used WebOS to get a modern mobile operating system now, not in the five or more years it will play with MeeGo, its successor to Symbian, an operating system that only Europeans seem to love, though iPhone adoption there is showing that particular love fest is nearing an end as well.

But HTC's position as a valued-added arms dealer, offering Windows and Android phones that sometimes had its elegant Sense UI overlay, would be threatened if it bought Palm and ended up competing with its two existing mobile OS partners. It likely was too big of a risk to switch to WebOS, whose market share is tiny and whose OS needs a home-run upgrade to distinguish itself, much as Windows Phone 7 appears it will do when it replaces the tired Windows Mobile. And I just can't see Nokia taking a risk or moving at anything other than a glacial pace; it's a dinosaur of a company, big and slow, and it hasn't yet realized the iPhone was the asteroid that will end its world.

HP might finally get to drive
So why HP? There are several reasons. One is a defensive reaction to archrival Dell, which will soon ship Android-based tablets and smarphones. But HP could have played that defensive game by offering Windows Phone 7 devices or even Android devices. Product category checked off!

Another could be nostalgia. A decade ago, the Windows Mobile-based HP iPaq was the cat's meow for road warriors, the handheld that any ambitious executive just had to have. After a year or so of celebrity, it faded away, along with HP's mobile presence.

The bigger reason, I believe, is HP's aspirations to be more than a commodity seller. Let's get real: Its primary business and revenue source is selling ink at per-ounce prices higher than gold. It's also the top seller of PCs, but those are largely designed by Intel and Taiwanese OEMs, so HP's PC fate is ultimately in their hands. Like everyone else, it's made increasing moves to get into the professional services business and the cloud business. Mobile is its big black hole in offering high-volume products to businesses and consumers alike -- and, outside of ink, its only realistic chance of not refining someone else's technology.

For the last couple years, HP has had an odd obsession with touch-based computing, creating its own UI overlay for Windows 7 to make touchscreen PCs work decently. The problem is that the Windows UI isn't designed for touch, so it's awkward to use. HP recognized that and tried to create its own innovation -- much like HTC has done with Android and Windows Mobile by providing the Sense UI -- while also pushing app developers to create touch-specific applications for kiosk and other uses where "regular," touch-unfriendly Windows apps never appear. The forthcoming Windows 7-based HP Slate is a great example of HP's ambitions with touch.

What does that have to do with mobile and Palm? A lot more than you may realize -- HP's touch UI obsession is right for the mobile market, whether you're talking tablets or smartphones. After all, touch is the primary UI mechanism for every popular smartphone save the BlackBerry and Motorola Droid. Google Android's lack of multitouch capability is a major omission that makes its apps awkward to use compared to an iPhone -- or a Palm Pre. I'm pretty sure Windows Phone 7 will also have solid multitouch through and through, but its UI design is meant to appeal to the teen-to-20s generation, leaving space for HP to attract the over-25 business crowd that may desire the iPhone but can't get past the Apple connection -- a lot of IT organizations, for sure.

Of course, HP will have to do much more than go to town on multitouch and touch apps using WebOS as its platform. WebOS has substandard security and manageability capabilities -- significantly less than the iPhone OS, for example -- so its business fit is limited. And HP will have to figure out the relationship between its Windows 7-based Slate and any future WebOS products. It may offer both platforms, but I'm betting that Apple was right in basing the iPad on the iPhone OS and not the full Mac operating system. HP will come to the same conclusion for its tablet strategy once it digests WebOS.

By buying WebOS and the smart team that Rubinsteam assembled at Palm, HP is no longer restricted to innovating around the edges of whatever Microsoft (or Google) delivers. It could actually drive its own vision, as Apple and Microsoft are doing in their respective platforms. Now the trick is for HP to learn to drive the core, not just refine the edges.

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