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HP and Palm: Perfect Together?

Hewlett-Packard -- the world's biggest technology company as measured by annual sales of $114.6 billion -- has agreed to buy Palm for $1.2 billion. What does it mean?

First off -- challenging Apple, Google, Microsoft, and others -- the deal "could make HP a new force in the red-hot smartphone market," suggests Mercury News. What's more, "HP executives said they plan to use Palm's webOS operating system for a host of mobile gadgets -- including tablet computers and netbooks, in addition to phones."

With the deal, "Palm gains access to HP's prodigious marketing muscle and global reach ... that global reach that not even Apple can compete with, and could seriously rewrite how and where mobile devices are sold."

HP, meanwhile, "needed a smartphone strategy," writes ZDNet's Between The Lines blog. "The company, which has largely relied on Microsoft to power its devices in the past, was pretty much a non-player in the smartphone game ... How much longer was HP going to be able to hold out as a smartphone player, given the growth potential there?"

With the deal, The New York Times concludes, "Hewlett-Packard signaled that it would take drastic action to remain relevant to consumers whose tastes in computing devices were radically changing."

Drastic or not, "New life for Palm devices means there will be real competition in smartphones," writes Forbes.

"This is a new, confident, HP," sums up blogger Robert Scoble.

Confident or not, plenty of analysts are questioning whether this gamble with payoff for HP.

"It's got me kind of baffled," Ken Dulaney, a tech analyst at Gartner Research, told Mercury News.

The Register, meanwhile, challenges several of HP's assumptions, like the idea that it can get Palm over the hump by exploiting its own relationships with wireless carriers. "Just because you're selling servers and other data center kit to a company doesn't meant they're going to give the inside track on getting smartphones and tablets onto its wireless network," The Register writes.

Read the whole story at Mercury News et al. »

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