How HP Can Save Palm: Page 2

HP could challenge Apple and Google in the all-important mobile sector if it took a series of key steps.
Posted August 31, 2011

Mike Elgan

(Page 2 of 2)

HP needs a viable strategy for third-generation computing. Even though HP has decided to spin off its consumer PC business, it still plans to offer systems that have user interfaces.

Today’s WIMP (windows, icons, menus and pointing-devices) user interface will soon go the way of the dinosaur, and HP will go with it unless the company realizes that it already owns the second-best third-generation UI available.

In the 1970s, Apple co-founder Steve Wozniak invented the personal computer. But because he was an HP employee, he was forced by his contract to let HP own and develop anything he invented.

So Woz took his PC prototype to the suits at HP, and said, essentially: “You own this. Do you want to turn it into a product?” HP’s response will live in infamy. They unceremoniously told Woz that nobody would ever want to own a computer, and that they had zero interest.

So Woz and Steve Jobs founded Apple, which is now the most valuable company in the history of computing.

HP is now repeating this history. They have in their possession the future of computing. Again. And they’re basically saying: “Nobody wants this.” Again.

How HP can Save Palm

There are two successful mainstream platform models today. The first is the Apple model, where one company sells integrated hardware-software devices. Apple doesn’t license iOS or Mac OS X to third parties. The only way to get an Apple operating system is to buy Apple hardware.

The second model is the Google model. One company makes the operating system, which is licensed to other companies that make hardware.

The best model for HP is the Apple model. For starters, Apple is making two-thirds of all revenue in the industry because it has the best model, and no other company is challenging Apple in this model. As a result, the company is running away with most of the money.

HP is not an advertising company like Google, so the Apple model makes far more sense.

However, the Apple model requires freedom from bureaucratic, group-think decision making, as well as short-term profit taking.

Here are the steps I believe HP could take that would not only save Palm, but HP:

• Put all the Palm-related technologies into a separate division, located physically away from other HP divisions, to be run like a startup. They should do with Palm what IBM did to create the IBM PC.

• Find an amazing visionary, and make him or her dictator of the new division, protected from the HP bureaucracy.

• Don’t license webOS to anybody.

• Copy the Apple model for software distribution, and make everybody come to HP’s app store for software. But don’t copy their revenue model. Undercut them by taking only 10 or fifteen percent of app revenues.

• Promise or guarantee to users and developers that HP will continue to invest in Palm for a minimum of 10 years, no matter how poorly it does in the market.

• Continue to develop and evolve the fullest possible line of webOS products, including tiny phones, regular-size phones, tablets and desktop systems.

• Don’t try to compete with Apple in the consumer space. Make webOS the iOS for the business world. Focus on business tools, enterprise integration and vertical solutions.

Palm is on the ropes. This great technology has suffered through 16 years of neglect, abuse and indecision.

As Apple has proved, a successful mobile platform needs long-term thinking, clear vision and a cohesive strategy.

And that’s really all Palm has ever lacked. If HP can provide this, Palm can be saved. And so can HP.

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Tags: Google, mobile, Apple, HP, Palm

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