Hewlett-Packard's $1.2 billion Palm acquisition could change the landscape of the tablet PC market, especially if HP decides to incorporate the Palm WebOS into future devices. Analysts suggest that the Palm acquisition supports the rumors that HP's so-called Slate tablet PC, reportedly running Windows 7, has been shelved. In theory, Palm's mobile operating system would allow HP to build a tablet that minimizes the load on processor and battery. Meanwhile, Microsoft's decision to end its Courier project suggests the company's retreat from the tablet PC market, which has been heating up thanks to massive sales of the Apple iPad.
Hewlett-Packard's acquisition of Palm for $1.2 billion is widely expected to
change the smartphone landscape, not to mention save the Palm brand from implosion.
What's less certain is how the deal might affect the nascent tablet PC market.
HP has a number of decisions confronting it, including how to best integrate
Palm's products into its existing channels. In addition, HP finds itself the
new player in a smartphone market that's increasingly become a competition between
Google Android and the Apple iPhone. But HP executives are also likely
calculating how its newest software asset, the Palm WebOS, can help it with
regard to tablet PCs.
Unconfirmed rumors suggest that the expected HP Slate, a
tablet PC running Windows 7 and equipped for video conferencing,
canceled. According to analysts, this may be a direct consequence of the Palm
"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," Anna Hunt, an analyst with
IMS Research, wrote in a May 3 research note. "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
In addition, using Palm WebOS for a tablet might open the door for more
application development. "WebOS is an extremely easy platform for apps
developers," Chris Schreck, an analyst with IMS Research, wrote in the
same May 3 note. "It uses standard development languages already common
among PC developers. If HP can create a compelling tablet offering that people
are willing to buy, the barriers to entry might be fairly minimal."
Another analyst suggested that the ability to create a Palm WebOS-powered
tablet could have been one of the prime motivators behind HP's acquisition.
"TBR believes Palm's WebOS will provide HP with a platform, and
potential differentiator, in the nascent tablet computer space," John
Spooner, an analyst for Technology Business Research, wrote in an April 30
research note. "Given that no single manufacturer or OS yet dominates the
tablet computing space, HP can couple the capabilities offered by WebOS with
its own design expertise to become a key player in this emerging market
segment. Here too, the acquisition of Palm gives HP the ability to leverage the
Palm developer community to create applications and services that make an
HP-Palm tablet relevant while fending against the iPad."
Spooner posited that the introduction of the Palm WebOS in tablet form could
threaten Microsoft's future attempts to move into the market.
"HP's current tablet with Microsoft Windows has not been well received
by reviewers, and TBR believes the Windows PC operating system does not lend
itself to a touch-screen tablet experience," Spooner wrote.
"Microsoft itself is finding the tablet PC market more complicated than
expected." In the end, he concluded, "We believe a WebOS tablet will
be better received than a Windows tablet, which may lead to adoption of WebOS
tablet PCs in the enterprise."
If HP has decided to withdraw the Windows 7-powered Slate from production,
it represents something of a black eye for Microsoft. During January's Consumer
Electronics Show in Las Vegas,
Microsoft CEO Steve Ballmer revealed a
prototype of HP's device during his keynote, highlighting its ability to
display ebooks and play movies. In an April 5 post on HP's Voodoo blog, Phil
McKinney, vice president and CTO of the
company's Personal Systems Group, suggested that a Windows 7-powered device,
equipped with Flash, would provide an "ideal mobile experience"
unmatched by Apple's iPad.
Whether HP decides to introduce only a tablet running Palm WebOS, or
versions with both that operating system and Windows 7, it faces tough
competition from Apple, which announced May 3 that it had sold 1 million
iPads in the 28 days since releasing the device.
But HP's challenges in the tablet PC space may be minor compared with those
facing Microsoft, which has killed its much-buzzed-about Courier tablet project.
Based on images and video leaked on tech blogs over the past few months,
Courier incorporated two touch screens that folded on a central hinge, like a
book, and allowed users to scribble notes or drawings in addition to reading ebooks
and Web surfing. Microsoft, however, declined to officially acknowledge the
project's existence until now.
"At any given time, across any of our business groups, there are new
ideas being investigated, tested, and incubated. It's in Microsoft's DNA
to continually develop and incubate new technologies to foster productivity and
creativity," Frank Shaw, Microsoft's corporate vice president of
communications, said in a statement announcing
"The Courier project is an example of this type of
effort and its technologies will be evaluated for use in future Microsoft
What those offerings will be, however, is not readily apparent.