20 Things to mention about HP and Palm – by Strand Consult


Strand Consult, the company that wrote back in 2002 the following notes about Palm and Handspring:

"Neither Palm nor Handspring are likely to survive the convergence of mobile phones and Personal Digital Assistants (PDA). A convergence, which will form the market for Smart Handheld Devices (SHD):

  • Neither Palm nor Handspring has the distribution power necessary for operating in the Smart Phone and SHD market
  • Neither of the companies have the financial muscle necessary to compete with Nokia, Ericsson/Sony, Siemens, Motorola, and now also Microsoft
  • The PDA value chain and price structure means that products become 30% more expensive at retail level than those shipped through the value chain of the mobile industry." (Link)
  • … has published a new report about HP's acquisition of Palm; 20 points to take into considerations when analyzing HP's move, with the following summary:

    "The biggest question is whether HP in the short term can create a growth in their share value, so that they can justify the investment in Palm? In the long term, the investment must create revenue and profit. We believe that it will be tough for HP to create enough revenue and profit to justify their purchase of Palm.
    We could easily make the above list much longer. From where I'm sitting it looks to me as if HP has looked at the value that iPhone has created for Apple's shareholders and said “hey, we need a product like that too”. If you look at what they got for their 1.2billion USD, it appears as if HP purchased a donkey, and is hoping that they can pass it off as a racehorse to their shareholders.

    Click here to read all 20 points:

    1.  Palm is only a brand name in the USA. Outside the USA Palm is totally unknown as a phone manufacturer.
    2.  Palm has no distribution in the mobile world and few and limited relationships with operators around the world.
    3.  Palm has limited mobile experience - they have been trying to enter the industry since 2002.
    4.  HP also has limited experience in the mobile industry - they have been trying without success.
    5.  HP has limited distribution in the mobile world and limited experience in the mobile value chain - they have tried several times but without success.
    6.  Even Compaq's iPAQ was not a Compaq product, but a product created by a reference design company in Seattle and a then unknown company in Taiwan, which we now know as HTC. The iPAQ was a Microsoft brainchild that they got Compaq to market and sell, because Microsoft wanted to enter the PDA market. This was the turning point for HTC - a close collaboration with Microsoft, resulting in HTC becoming the worldwide brand it is today.

    Check out the full report in here

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