Thursday, April 29, 2010

Deep Pockets

In the tech industry, how often do we hear this?

  • "Great technology, they just didn't market it well."
  • "Its a shame to see that product die.
  • "They need somebody with deep pockets to see it through."

Of course this brings us to Palm, acquired by HP for $1.2 billion. Brian Humphries, an HP executive in business development, reportedly said: "Our intent is to double down on webOS." Palm managed to find their deep pocketed benefactor. Now we get to watch what happens.

This is the second time a savior has swooped in for Palm. In the early 1990s before the PDA had really established itself as a category, Palm nearly ran out of money. Its VCs were unwilling to put in more, but Palm was not generating enough revenue to operate. The company was purchased by US Robotics, which was later purchased by 3Com. Palm operated successfully for many years after that first brush with death.

We'll see what happens from here. HP likely believes that by owning the complete system, from hardware to OS to applications, they will be able to deliver compelling products and compete successfully with the iPhone. Time will tell.