Why HTC should buy Palm

Palm recently wanted to sell Google . In this article, Chris Ziegler, 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 - webOS and the launch of Palm Pre did not bring the huge success that the company so desperately needed. Profitability is Palm's crystal dream; Verizon does not provide the Pre Plus and Pixi Plus with the marketing support they need to break into top sales. Some analysts suggest that the cash in the company's bank account will last for about another year, and choosing Sprint as a long-term partner to launch a new platform was a big mistake. All this led to the fact that the situation around Palm is an almost constant reason for rumors and speculation for several months. Nokia, Dell, RIM, Microsoft, Google, Nintendo (yes, exactly Nintendo) - this is not a complete list of companies,

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

• For PR purposes, the purchase of Palm can be positioned as a combination of two full partners. Palm is a respected company, with John Rubinstein at the helm. The name Palm is associated with the earliest stages of the development of the mobile device market (everyone remembers the success of the company's smartphones), and the founder of the company, Jeff Hawkins, is a living legend in the field of personal computers. HTC is a fairly large company to completely absorb Palm, but small enough to make Palm acquisition really be treated as an acquisition. If Palm acquired Nokia, everything would be treated differently.
• Companies have a common history. Although now HTC and Palm are not cooperating with each other (as far as we know), HTC has created devices for Palm in the past. The most recent example is the joint development of Palm Treo Pro. This was in the days when Palm devices were not considered a mess. In the end, these companies are familiar with each other, as well as with the processes within the companies. So the merger will be quite comfortable.
• Windows Mobile is a thing of the past, and Windows Phone 7 does not give HTC enough flexibility. HD2 is sold quite tightly only because it runs an ancient, surpassed by many operating system. And tragic is the fact that HTC has limited control over the situation, but still invests a huge amount of time, money and resources by redrawing WM. With the advent of Windows Phone 7, HTC loses this opportunity, which greatly reduces the company's chances of profitably presenting its devices on the market, among hundreds of others.
• Android development is still uncontrollable. 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 this happens, HTC only suffers from the fact that it can’t cope with the pace of Google’s development. All Android devices with HTC Sense on board are currently running Cupcake, and it looks weird, especially in light of the fact that Google has since released 3 key releases of the Android platform. And it’s really not HTC’s fault, but it hits the company's cash register hard.
• HTC needs its own platform, and Palm needs hardware, which is not a complete crap. HTC has earned a reputation as one of the best, if not the best, mobile devices in the world; one glance at HD2 is enough to get material 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 full 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 carriers. The days are long gone when Treo could be found with any operator on the planet, and this is one of Palm's problems today. For contrast, try to find any major operator who does not have any HTC device in the lineup.
• HTC is changing generations of devices much more often than Palm. HTC announced the Touch Diamond on May 6, 2008, and Touch Diamond 2 on February 16, 2009, two very different devices. It is much easier for the consumer to navigate and understand why Diamond 2 is a worthy successor 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 an amazing couple, and we are confident that the marriage of software from Palm to hardware from HTC will blow up the global fabric. But be that as it may, HTC can simply simply redeem Palm, fire every single one, and throw webOS in the trash, just because HTC will somehow receive an excellent patent portfolio from Palm. Do you know which patent portfolio could keep Apple from lawsuits for years to come? Yes, this is exactly the Palm patent portfolio. We still think that Google is somehow involved in the lawsuit of HTC and Apple, we are actually confident in this. But for HTC there is no reason to stand in the middle of this battle between Steve Jobs and Eric Schmitt. A company can defend itself.

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