No sooner had we published our Supply Chain Matters commentary, Palm Reaches the Crossroad, than the announcement came that Hewlett Packard will be acquiring Palm for an estimated $1.2 billion.

I had not planned to revisit my two previous conclusions so soon, but the temptation is too great not to.  Conclusion one noted that Palm can no longer remain an independent company. Never underestimate the power and influence of private equity and venture capitalists when they begin to cast the nets of a company looking for an acquirer.  The question in my mind was whom, and I must admit that HP was somewhat of a surprise. Then again, the networks of silicon valley are deep, sometimes to the detriment of Asia based companies. Conclusion two noted that end-to-end supply chain capability must always be aligned to the needs of the overall business.  While Palm badly stumbled, HP is an entirely different story.

There is no doubt that there is lots of speculation on the merits of HP as the potential new player in the smartphone market.  HP officials note that they plan to leverage Palm’s webOS operating system in a host of mobile devices which could include tablet computers, netbooks as well as smartphones, and this strategy makes lots of sense to this blogger.  Where Palm was weak in integrated marketing, HP is superb.  Where Palm didn’t quite understand the power of leveraging channel partners, HP surely does.  While Palm might have struggled with the planning and ramp-up of suppliers and contract manufacturers, HP does not.

Some industry observers are already noting that when this deal is consummated, HP will have a lot of catching-up to do.  This blogger is looking forward to noting how HP jumps into the battle of Apple, Google, Microsoft, Samsung, LG, Lenovo and others to come.  It is about time that a new global savvy player now competes with the ‘magnificent arrogants’.

What’s your view? Are you surprised that HP turned out to be the suitor?  Is HP a viable competitor in this market?

Bob Ferrari