HP-Palm Deal Approved, So What’s Next?


Palm shareholders have approved Hewlett-Packard’s acquisition of the troubled mobile computing firm, officially kicking off the next phase in HP’s integration of Palm.

Now we’ll find out who and what from Palm will stay and who and what will go.

Palm gave the green light to the $1.2 billion HP acquisition at a special stockholder meeting last Friday, according to a Form 8-K filing made public by the Securities and Exchange Commission (SEC). The deal, which delivers $5.70 per share to investors, is scheduled to be completed in the first week of July.

One Palm executive who appears likely to stay on in the near-term is Chairman and CEO Jon Rubinstein, the ex-Apple engineer who played a big role in developing the iPod before joining Sunnyvale, Calif.-based Palm in 2007.

Rubinstein will reportedly head up a new smartphone and mobile computing business unit at Palo Alto, Calif.-based HP that will include HP’s existing iPaq handheld business. Under Rubinstein’s leadership, Palm developed its webOS mobile operating system, seen by many industry watchers as the prime bit of intellectual property HP was seeking in gobbling up the beleaguered smartphone maker.

HP, in fact, has already incorporated WebOS into a new corporate mobile printing offering from its Imaging and Printing Group (IPG) that enables users to print via smartphones and other devices in the cloud.

But with the webOS software in hand, will HP CEO Mark Hurd and his team care to compete with the likes of Apple, Motorola and HTC in the smartphone hardware business? Palm’s own Pre and Pixi smartphones have been sales duds in competition with Apple’s iPhone and the growing legion of Google Android-based devices, despite initial optimism for a Palm revival -- particularly following the debut of the Palm Pre in 2009.

But if the smartphone business isn’t particularly enticing to HP, what about the suddenly very appealing tablet PC market? Will Apple’s success with the iPad lead HP to redouble its efforts to get its own tablet PC onto retail shelves, this time powered by webOS? Rumors now abound that HP is planning to launch a webOS-based tablet code-named Hurricane in the third quarter of 2010.

Given that this is pretty much the timeframe set by HP for its Microsoft Windows 7-based HP Slate, is it possible the computing giant is planning two different tablet products? Or is all of this a prelude to HP breaking off tablet ties with Redmond and going it alone with its own new in-house operating system?

As for who at Palm will continue to draw a paycheck under the new HP regime, well, if Hurd and Co.’s history with EDS and other recent mergers is any guide, Palmistas may want to start working on their resumes.