Why HTC should buy Palm

Palm recently wanted to sell Google . In this article, Chris Ziegler, the author and analyst at Engadget, will explain why the deal between Palm and HTC is beneficial for both companies.

It's no secret that the most anticipated event for Palm in 2009 was webOS and the launch of Palm Pre did not bring the huge success that the company so desperately needed. Yield - Palm's Crystal Dream, Verizon does not provide Pre Plus and Pixi Plus with the marketing support they need in order to break into top sales. Some analysts suggest that cash on the company's account at the bank will last for about another year, and choosing Sprint as a long-term partner for launching a new platform was a big mistake. All this has led to the situation around Palm being an almost constant reason for rumors and speculations over several months. Nokia, Dell, RIM, Microsoft, Google, Nintendo (yes, yes, it is Nintendo) - this is not a complete list of companies that were rumored to have some kind of deal with Palm.

For his part, Palm boss John Rubinstein was as clear as ever: the company must remain independent and strive to generate income. But let's forget about reality for a moment, and imagine that Palm is still taken over by a third-party company. Who is more suitable for the role of the buyer? We assume that HTC, let's see why.

• In order to buy a Palm PR, can be positioned as the union of two full partners. Palm is a well-respected company, with John Rubinstein at the helm. The name Palm is associated with the earliest stages of development of the mobile device market (we all remember how successful the company’s smartphones were), and the company's founder, Jeff Hawkins, is a living legend in the field of personal computers. HTC is quite a big company to fully absorb Palm, but small enough for Palm acquisition to be truly treated as an acquisition. If Palm would have acquired Nokia - everything would have been treated differently.
• Companies have a common story. Although now HTC and Palm do not cooperate with each other (as far as we know), HTC created devices for Palm in the past. The most recent example is the Palm Treo Pro joint development. It was in those days when the devices from Palm were not considered a garbage. After all, these companies are well acquainted with each other, as well as with the processes within the companies. So the merger will be quite comfortable.
• Windows Mobile is already in the past, and Windows Phone 7 does not give HTC enough flexibility. HD2 is sold rather tightly only because it is running an ancient, surpassed by many operating system. And the fact that HTC has limited control over the situation is tragic, but it still invests a huge amount of time, money and resources redrawing WM. With the arrival of Windows Phone 7, HTC loses this opportunity, which greatly reduces the chances of the company to profitably present its devices on the market, among hundreds of others.
• The development of Android is still uncontrolled. We already wrote that the release of Froyo will put an end to the problem of backward compatibility of the platform, which has been taking place since the release of Donut. Until that happens, HTC is only suffering from the fact that it cannot cope with the pace of development of Google. All Android devices with HTC Sense are on board, currently running under Cupcake, and this looks strange, especially in the light that Google has since released 3 key releases of the Android platform. And this is really not the fault of HTC, but it strongly beats the company's cash register.
• HTC needs its own platform, and Palm needs hardware, which is not a complete sludge. HTC has earned a developer reputation as one of the best, if not the best, mobile devices in the world; one look at HD2 is enough to get a tangible confirmation of these words. However, as we noted earlier, the biggest problem is that HTC depends on its partners who develop software. HTC will be able to take complete control over the integration of software into its device only when it owns two components at the same time.
• At the moment, HTC has a much closer relationship with the operators. Long gone are the days when Treo could be found at any operator of the planet, and this is one of the problems Palm today. For contrast, try to find any large operator who doesn’t have any HTC device in the line.
• HTC changes the generation of devices much more often than Palm. HTC announced the Touch Diamond on May 6, 2008, and the Touch Diamond 2 on February 16, 2009, two very different devices. It is much easier for the consumer to find out and understand why Diamond 2 is a worthy heir to Diamond. On the other hand, Palm has not changed either the appearance or the filling of the device since January 8, 2009.
• Patents All of the above facts indicate that HTC and Palm will be a delightful couple, and we are confident that getting Palm’s software on HTC hardware will blow up the foundations of the world. But be that as it may, HTC can simply simply buy out Palm, fire one and all, and throw webOS into the trash bin, just because HTC will somehow get Palm’s wonderful patent portfolio. Do you know which patent portfolio can keep Apple from litigating for years? Yes, this is exactly the Palm patent portfolio. We still think that Google is somehow involved in the HTC and Apple litigation, we are actually sure of this. But for HTC there is no reason to stand in the midst of this battle between Steve Jobs and Eric Schmitd. The company can defend on its own.

And it so happened that according to rumors, HTC is more interested in this deal than any other company. It seems that investors think the same way, because on Friday Palm shares rose in price by 13% . The first thing that is taught in the Apple Business School: what you say can be very different from what you mean. And knowing about Rubinstein’s Cupertino roots, it is quite possible that negotiations on a deal have already begun.