Wednesday, April 28, 2010

Palm/HP is still dead

A few weeks ago I said Farewell Palm. Now HP has paid $1.2 billion in cash to acquire Palm ($5.70 a share).

It's good news for those who bought Palm stock in the past few weeks, but it's no reason to consider buying a PalmOS device. Whatever Palm was yesterday, it's now being digested by a very average large publicly traded company. Palm is now HP.

An average PTC like HP can compete effectively against other clumsy but powerful PTCs like IBM, Dell, RIM, and Microsoft. HP is capable of turning out devices that are every bit as good as Windows Mobile phones of 2008.

Except it's not 2008, and the competition is not RIM or Microsoft or Dell. The competition is Google and Apple.

Google and Apple are also publicly traded companies. They are not typical however. They are very deviant. Google has an underestimated two tier ownership structure that gives great power to its founders. Apple has Steve Jobs, who in addition to being an insane genius with mind-control powers is also Apple's founder and has cult like authority over the company and its shareholders. Both Google and Apple behave like privately held companies with public money.

Palm is still dead. I don't know why HP did this deal. Maybe it was all IP, but they paid a lot for IP. I think they hope to stay in the only game in town. It won't work; there's no room for them at the table.

This is about Google and Apple. Microsoft will take 3rd place. RIM will fall by the wayside within three years. HP won't last a year. They can't compete.

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