Detailed Discussion of HP's Agreement to Acquire Palm
Posted on Wednesday, April 28 @ 20:54:02 PDT by Carl Brooks
HP (NYSE: HPQ) and Palm, Inc. (NASDAQ: PALM) today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system.
Today, Wednesday, April 28, 2010 at 5 p.m. ET / 2 p.m. PT, HP held a live audio webcast for financial analysts and stockholders to discuss HP's agreement to acquire Palm.
Here is a summary of the call with my comments as well.
Advertisement - The rest of the story continues below...
The New Palm Smartphones: Small and Powerful, the Palm Centro is the most affordable Smartphone. Which Palm OS Treo 755p do you like, the Burgundy or Dark Blue? The Treo 680 is available from AT&T in Silver or Crimson. The Treo 700p ( Verizon or Sprint) is still an option for some. All of these have more memory, better camera and faster Internet speeds than what the fantastic Treo 650 ( Unlocked , Cingular , Sprint ) provides. Is the Windows Mobile your mobile cup of tea? Then the Treo 750 Smartphone (AT&T) orthe Treo 700wx (from Sprint or Verizon Wireless) might be for you. Palm delivers the palm Treo 700. You have been waiting for it to cost less than $30, now it does. What are you waiting for? Get your memory card today! Now you do not have to leave your movies, music, data files and more at home or the office. Carry it today on your new SD card!
Learn more about your handheld by listening to our Palm OS Podcasts! Protect and add style to your mobile device with a new case from Piel Frama!
Mr. Jim Burns, Hewlett-Packard 's Vice President of Investor Relations, began the investor call expressing his excitement in the recent announcement, “Thank you. Good afternoon and thank you all for attending this call on such short notice. We are very excited today to announce that Hewlett-Packard and Palm have reached a definitive agreement for Hewlett-Packard to purchase Palm at a price of $5.70
per share, giving the transaction a total enterprise value of $1.2 billion. ”
He mentioned all the typical “forward-looking statements” and “Regulatory approval pending” warnings before proceeding to stating that the deal will be “financed with existing cash” and “is expected to close in the third quarter of HP's fiscal 2010 ”.
Todd Bradley, Executive Vice President of HP's Personal Systems Group, discussed the strategic benefits of the transaction.
He began, “The market we are focused on, connected mobile devices, is large, profitable and growing. It is driven fundamentally by our customers' need to be connected to the people, information and entertainment that matter most to them. We believe that the acquisition of Palm is a transformational deal in the connected mobility market, opening up opportunities for further profitable growth by leveraging the unique strengths of Palm, along with the unique strengths of HP. ”
Clearly HP is interested in Palm's intellectual property (IP). Bradley continued, “Palm's world-class technology, coupled with HP's scale and financial strength, will accelerate our strategy within the connected mobile device market... This market presents a significant opportunity for profitable growth.”
HP clearly wants to get in the increasingly crowding smartphone market, “The smartphone market alone is over $100 billion and growing over 20%. We see further opportunities beyond smart phones into additional connected mobile form factors.”
It is no secret that HP is interested in “additional connected mobile form factors”, as they have played in this arena for years with their CompaqHP iPAQ.
The iPAQ refers to a Pocket PC and personal digital assistant first unveiled by Compaq in April 2000; the name was borrowed from Compaq's earlier iPAQ Desktop Personal Computers. Since Hewlett-Packard's acquisition of Compaq, the product has been marketed by HP. The device was the main competition to the Palm handhelds, but provided more multimedia capabilities using a Microsoft Windows interface. After 10 years of competing with each other, these two talented technology companies are combining for obvious reasons.
One “connected mobile form factor” that has helped bring about this acquisitionmerger sooner, rather than later is the tablet PC – specifically the Apple iPad. While Bradley didn't mention Apple or the iPad directly, make no doubt it was on his and other executives minds as they prepared his next words, “We see further opportunities beyond smart phones into additional connected mobile form factors. We anticipate that with the webOS we will be able to aggressively deploy an integrated platform that will allow HP to own the entire customer experience, to effectively nurture and grow the developer community, and to provide a rich, valued experience for our customers. With Palm HP acquires a strong operating system to deliver a unique customer experience in applications to over 2000 apps and growing, a platform to deliver mobile cloud-based services, and an opportunity to drive preference in the market among consumers. ”
Apple's iPhone commercials have ushered into the consumer's mindset expectations of applications or apps. Prior to the iPhone, there was hardly any promotion of apps to the masses. Now it is almost mandatory that apps be mentioned in the promotion of any smartphone. Shouldn't HP understand this more than any company? As a hardware manufacturer, they understand (or should) that most people use their computers for the applications that are executed on them.
Palm has some incredible intellectual property, especially in the patents that they own. They have engineers that are very talented in the mobile space. They just didn't have the deep pockets to compete with Apple. Well they do now, Bradley said it this way, “Palm and HP each brings unique assets and advantages that we expect to contribute to a winning combination. At the foundation of both companies is a deep expertise in mobility, a culture of innovation and strong carrier relationships. Two Silicon Valley-based technology companies with a passion for innovation. Behind this technology is a valuable IP portfolio including cloud-based assets which will advantage HP competitively. And behind that IP is a deep bench of engineering talent led by a strong and experienced management team. ”
Jim Burns added that they are ensuring that they keep this talent team around long term, “We have a significant retention program that we put in place as part of the deal.” Bradley chimed in too, “Look, I think I will characterize for Jon, as we have had pretty specific discussions, he is very excited about staying and building out -- actually executing his vision for the webOS into a broader market, and I think HP brings those capabilities to him to do that. And I think it is fair to say that his team is excited as well.”
So the people are the key to the success of this deal, but it is also what these people are making that makes the deal possible too. When asked why HP didn't just design their hardware to run the Android OS, HP was clear; they will still do partnerships with the likes of Microsoft and others where it makes sense, but when it comes to the WebOS, it just makes sense to to do that too.
“Palm has developed a world-class mobile operating system and platform. The integrated user interface they have architected and implemented delivers an incredible experience from true multitasking on the device to a rich and growing set of applications. ” Clearly “multitasking” is a buzz word that consumers are quickly learning to add in their minds and expectations of a mobile device.
So Palm bought to the table: the right operating environment, a valuable IP portfolio, and the people who know how to drive innovation that matters to customers. What does HP brings to the table? Bradley made that clear too, “the financial strength and the commitment to further invest to accelerate profitable growth in the connected mobile device market. We intend to invest heavily in (WebOS) product development and go to market to drive this business aggressively. ”
HP is excited to get hold of the patents and especially the WebOS. “webOS was built as a true mobile platform. With the Web at its core, it enables significant scalability, ease of application development, and portability to multiple devices. The environment performs the way you would want and expect a personal connected device to operate with application multitasking, integrated personal information, and Web services and an intuitive gesture interface. With more than 2000 applications and growing, this platform and the Palm developer program are gaining momentum. With HP, given the financial commitment we intend to make to this operating environment, we expect this pace to accelerate. ” The message is clear, we will compete against Apple, Google, HTC, Samsung, Dell and anyone else that wants to battle in the mobile economy. Make no doubt about it, WebOS is a powerful operationing system and clearly HP recognized this fact.
Palm was hurting because of the lack of funds. HP was hurting because they had not had any new mobile innovation in years. Now they the two make a heck of a team, “Together HP and Palm will make a powerful combination. With our long histories in Silicon Valley, our values and vision are consistent, and our strengths are complementary. Palm provides HP with the opportunity to move forward with world-class technology and an integrated customer experience. Coupled with our scale, global reach and investments in the ecosystem, we expect we will see solid growth. We are excited about accelerating our capability to provide our customers with compelling connected mobile experiences.”
Bradley also stated, “ we intend to operate it (Palm) as a business unit, which is in line with the way we are structured today. I think as I said earlier Jon Rubinstein is very excited about the opportunity HP represents to build out the platform, and I think it is fair to say his leadership team is as well. ”
During the questions and answer session, Bradley added this, “While Palm currently has the Pre and Pixi smartphones, we see that as one space that right now is very consumer-oriented, and we will look at how we leverage our both retail and commercial channels to broaden the distribution of that -- those set of products. I think the tablet/slate products are such new markets, we see opportunities broadly for consumers, but at the same time, having just finished up our partner conference, enormous interest on behalf of channel partners with specific vertical deployments in things like healthcare and education. So I think you will see these products deployed in both markets or both segments, consumer and commercial.”
Rod Hall, an analyst for JPMorgan , had a great question that's worth showing, “...One of the main questions we have got is we have seen Apple succeeding as a content platform in addition to the hardware platform that they are providing. So they are doing a lot of content aggregation. Do you intend to get into that side of the business to move the platform forward? Can you just talk a little bit about what your content strategy might be?"
Todd Bradley responded, “Our focus is to provide connected devices that enable people to safely and seamlessly connect to that information that is important to them, be that entertainment or work or personal data. So I don't think we are content creators, but we are access providers. ”
Rod Hall pressed, “So does that mean you would look to do deals with music companies and video companies and things like that, kind of along the lines of what we have seen Apple do? ”
Bradley finalized, “Well, look, we are not going to get into the specifics of how we will execute the strategy that we have laid out for the acquisition. I think we will do more of that as we get the transaction closed.”
Well I personally think content is going to be a key factor as well and will be discussed in great detail over the coming months and years. At this time, HP has not announced any specific time lines at this point for any new product. I can not wait to see the first product that this team produces.
Suggestion boxIs there a particularly cool mobile computing product or service I've missed? Got a spare story idea in your back pocket? Tell me about it.
iRiver iHP-140 40 GB MP3 Jukebox - Now you can listen to over 1,200 hours of recorded music, or tune in to the built-in FM radio. With a rechargeable battery that lasts up to 16 hours, ultrafast USB 2.0 file transfers, and simple navigation, the iHP-140 is the music player of choice.
New! - Need some Palm OS software? We have partnered with Palmgear to offer you the largest selection of Palm OS software. We have games, utilities and much more software.
Want to listen to Audible books on your PDA? All you have to do visit Audible.com to signup for their program and start listening to great books. Let them know we sent you there, enter our username, godschoice, when you register at Audible.com. AudibleReady® Palm Handhelds include the Tungsten C, Tungsten T Series, and Zire 71. All models play Audible formats 2 and 3 and can hold up to 64 hours of Audible audio using a 256 MB expansion card. Remember, when asked "If an Audible customer referred you, please enter that person's username", please enter godschoice.
The New Palm PDAs Are Here:The Palm® Z22 was designed specifically for people who want to replace their planner. The Tungsten E2 brings more memory and Bluetooth technology. The Palm TX Handheld provides 128MB RAM and gives you Wi-Fi and Bluetooth wireless. Need to kick your storage up a notch? The Palm LifeDrive provides 4GB of internal storage and Wi-Fi and Bluetooth wireless - Store what you want and connect to what you want.
The New Palm Smartphones: Whether the Palm OS (Verizon Wireless 700p or Sprint 700p ) or the Windows Mobile (Verizon Wireless 700w) is your mobile cup of tea, Palm delivers the palm Treo 700. More memory, better camera and faster Internet speeds than what the fantastic Treo 650 (Unlocked,Cingular,Sprint) provides.
WE NEED YOUR SUPPORT Please take a moment to click on one of our sponsor's banners, each time you finish visiting Palmloyal.com, to help keep our site FREE.
Looking for a safe and affordable place to host your web site? FlockHosting.com offers just that. With packages as low as $5.00 a month, the service and prices are truly a blessing! Sign-up for hosting today!
The Palmloyal.com website is made possible by your financial contributions. If this website, our newsletter, email lists, or the personal assistance we've provided via email messages have been a blessing to you, please consider sowing a seed into the good ground of Palmloyal.com. Your seed allows us to continue to be a blessing to you and to others via the internet. Please visit our Supporting Palmloyal.com FAQ area and contribute in any way that you can. Click Here.
Login
Don't have an account yet? You can create one. As a registered user you have some advantages like theme manager, comments configuration and post comments with your name.
The comments are owned by the poster. We aren't responsible for their content.
All logos and trademarks in this site, such as Palm, Handspring, Sony, are property of their respective owners. Palmloyal.com is not affiliated with or endorsed by Palm Inc., PalmSource or any of its Licensees. All comments are the opinions of their posters, and does not necessarily carry our endorsement. Please read our Terms of Service and Privacy Policy policies regarding use of our Services.
