Who will save what’s left of Palm from HP’s bumbling? It could be Amazon, as the online retailing giant is in serious negotiations to snap up Palm from HP, VentureBeat has learned.
A well-placed source tells us that HP is currently looking to rid itself of Palm as soon as possible, and that Amazon is the closest to finalizing the deal, among a handful of contenders.
Indeed, after yesterday’s announcement of Amazon’s Kindle Fire tablet, no other company seems as fitting a home for Palm and its webOS software. It’s worth noting that former Palm CEO Jon Rubinstein, who now holds a vague “product innovation” role at HP’s Personal Services Group, joined Amazon’s board late last year.
When asked for comment, an HP spokesperson said the company doesn’t comment on rumors and speculation. We’re still waiting to hear back from an Amazon representative.
The Kindle Fire is powered by Android, but it’s been heavily customized by Amazon to the point where you can barely tell. By purchasing the remnants of Palm, Amazon would have free rein to redesign webOS to its own liking, and it would be able to further differentiate its Kindle devices from the slew of Android tablets in the market.
And even though HP has given up entirely on its webOS hardware business after the TouchPad tablet failed spectacularly, there’s still plenty of potential for webOS to power a successful device. Palm’s mobile software was praised for its slick multi-tasking capabilities, which could allow future Kindle Fire tablets to juggle games, movies and media with more finesse than Android.
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It also appears that HP has been eyeing Amazon for some time as a potential webOS partner. In an interview with This is my next in July, Rubinstein revealed quite a bit about having Amazon use webOS in its future tablets:
So, we’d like a partner that would allow us to expand the webOS ecosystem… There’s a variety of different sets of a characteristics to qualify as a good partner. I would say Amazon would certainly make a great partner, because they have a lot of characteristics that would help them expand the webOS ecosystem. As to whether there’s been discussions or not… that’s obviously not something I’m going to comment about.
HP paid $1.2 billion for Palm in 2010, but Amazon will end up spending a fraction of that if the deal goes through. Given just how badly the TouchPad failed, HP will likely offer what’s left of Palm at a major discount, especially since Amazon woudn’t be interested in resuscitating now extinct webOS hardware.
Personally, I’ve never had much faith in HP’s ability to effectively manage Palm and webOS. Amazon, with its commitment to long-term planning and innovative consumer devices, seems like a much better fit. And in a way, it seems fitting for the company that released the first widely-available $200 tablet to snap up the company that made PDAs, the precursor to the smartphone, a phenomenon.
COMMENTARY: I think it's a bit risky to acquire the Palm OS, the mobile operating system that is the nuts-and-bolts behind HP's TouchPad tablet, given the obvious lack of apps, something that has plagued all of the non-iPad tablets marketed so far.
As I pointed out in my blog post of June 27, 2011, I thought that the TouchPad was superior to the Apple iPad in every way possible way except for battery life and lack of apps. The TouchPad also received a number of rave reviews, including one from Fast Company that I included in a blog post dated July 3, 2011.
In spite of the rave reviews, in a blog post dated August 20, 2011, I reported that HP pulled the TouchPad off the market after only about a month and a half due to very disappointing sales. It's a pitty that HP pulled it off the market so quickly, then resorted to a fire sale to get rid of the unsold inventory. I hoope that Jeff Bezos does not repeat HP's mistakes.
If Jeff Bezos is able to produce a new Kindle tablet that is the equal of the HP TouchPad, I'm all for the deal, but he is going to have to reduce the price in order to steal market share away from the iPad. I will buy one myself if its as good as the TouchPad. It's a gutsy decision, but then again, Jeff Bezos is no ordinary CEO. He saw the coming shift from hardcover books to digital books and ontroduced the Kindle ebook reader. Today, the Kindle is the de facto eBook reader.
While he is at it, Bezos should acquire all the technology behind the HP TouchPad and hire some of the HP people to help him design, engineer and market the new Amazon Kindle tablet that will run WebOs. He needs to acquire all of the pieces not just the OS. This will get him up and running much faster and really shorten the learning curve.
With Amazon's huge customer base, I have no doubt that Bezos could sell a lot of new Amazon Kindle tablets running the WebOS, but the price is has to be lowered in order for him to differentiate himself from the Apple iPad 2 (iPad 3 coming in early 2012).
Courtesy of an article dated September 29, 2011 appearing in VentureBeat
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