Hewlett-Packard (NYSE: HPQ) made a mistake when it bought Palm. It is about to make a much more costly mistake in launching a series of smartphones that run the rickety Palm webOS, scheduled for early next year. The mobile operating system was a failure for Palm. There is no reason to believe that HP can change that.
Palm ran into two problems when it launched its Pre generation of handsets. The first is that Palm had neither the distribution network nor the marketing budget to support its launch.
The second problem was that Palm was forced to enter a market dominated by Symbian, Apple OS, and Blackberry OS smartphones. Google (NASDAQ: GOOG) had also recently released its Android mobile operating system. That OS has now passed Apple and Blackberry OS in US market share, according to recent research, and its dominance continues to grow.
There is no room for a fourth mobile operating system in a field that Microsoft (NASDAQ: MSFT) is also desperate to enter. Redmond has nearly unlimited resources to push Windows 7 Mobile. It at least has an established presence with handset companies and can give them developer and market support.
HP has made several strategic decisions recently, some of them personnel-based, which has hurt the tech company’s reputation. It is about to compound that by choosing an operating system which has already been rejected by the retail and enterprise markets.
It may have been humiliating for the company that bought Palm to use Android in its new product, but at least that decision would have had a good chance of success.
Douglas A. McIntyre
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