HP picks up Palm Incs smart call

Written by Reuters | San Francisco | Updated: May 1 2010, 04:21am hrs
Hewlett-Packard Co's $1.2 billion acquisition of struggling smartphone maker Palm Inc gives the company a foothold in a market it cannot afford to ignore, but HP will have to spend more to make its bet on the company pay off. HP, the world's largest technology company by revenue, is already a dominant force in PCs, servers, services and printers. But without a credible smartphone offering, the company risked being left behind in a rising and highly profitable market, one that rivals both at home and in Asia are increasingly moving into.

PC makers Dell, Lenovo and Acer are all pushing into smartphones, which offer advanced services such as streaming video, email and GPS in addition traditional voice calls. But analysts said Palm gives HP a product that stands apart from rivals offering a slew of devices tied to operating systems by Google and Microsoft. And it allows HP to begin selling a potentially lucrative array of back-end services for mobile users. "It would be at their risk to ignore it," said CL King & Associates analyst Lawrence Harris. I would say HP looked around and said, we need to be in this space. Google is here, Apple is here.