Palm and HP: You Be the Analyst
Speaking of Research In Motion, this where everyone that wants enterprise sales has to grab market share. Actually, from both RIM and Microsoft, which has had big corporate sales in the past but whose lax smartphone strategy has created a huge opening for HP/Palm and Android.
Corporate customers are likely to see HP as a more solid partner in the smartphone space than Microsoft and, perhaps, even RIM.
Microsoft is vulnerable as its customers look to replace aging hardware. Many will never seriously consider Windows Phone 7, which may be too great a departure from current user interfaces to be a success. Or maybe not. You're the analyst and it's something to factor in.
Another factor: Can RIM move into the 21st century? To some, the BlackBerry line seems behind the times, though it remains the de facto standard for corporate smartphones. If you think new BlackBerry models will get it right, then you've placed a cap on what HP/Palm (and everyone else) can achieve in the business space.
As for Apple, the iPhone has not been a huge success with business. New enterprise-friendly features in the next-generation operating system, due this summer, may help. But, it seems clear that people who do lots of e-mail and editing on their smartphones want a keyboard.
There is no reason to believe Apple is about to release an iPhone with a physical keyboard, but Palm already has both keyboard and non-keyboard smartphones. Head-to-head, HP/Palm can be a bigger competitor with RIM for business customers than Apple is likely to ever be.
Android is still a bit of a mystery. My bet is that Android never becomes a single platform, where every handset runs every application. Google is not exercising that kind of control over the platform and hardware manufacturers show every willingness to "personalize" Android to death.
The Android applications store, though open, is not as confidence-inspiring as Apple's iron hand over the apps it allows to run on the iPhone.
In short, Android remains a bit of a mystery, which doubtless limits it acceptance and appeal. If you don't see these challenges, then while Android is unlikely to create huge problems for Apple, it could make life tough for everyone else.
In such a world, Android could top Apple on total smartphone sales, but still be "less of a platform." Android's success would be more of a challenge to HP/Palm and Microsoft, who might respond by taking on Android in the business space alone, rather than battling both Android and Apple for consumer sales.
Continued economic improvement bodes well for global smartphone sales. This is, though Americans often forget, a truly global market. Palm is not a global player, which is something HP will doubtless change.
How strong will HP's commitment to Palm be? How much money is Mark Hurd willing to invest before Palm turns the corner? It better be billions, especially if the economy remains sluggish or slides backward.
Has the smartphone market already been decided? That is possible, and probably what people will say if/when both HP/Palm and Microsoft fail to make a dent and Android grabs market share. If you believe the market is decided, then HP is throwing good money after bad.
If it's true that Apple is unassailable in the consumer space, but Android is weak, then there is still the business customers to battle for. This will be tough if RIM is really in the battle--which I wonder about--but leaves potential for everyone else to play. If RIM is on the way down (or can be pushed), then there is tremendous opportunity for growth.
We've already talked about customers in a variety of contexts. But not in terms of demand: A growing market can hide a number of sins. This really means international growth, so the success/failure of HP/Palm may be decided outside the United States.
HP has excellent customer relationships and respect in the market, which is a big win for Palm. HP brings credibility with business customers and consumers, as well as the appearance of staying power that Palm lacked. In some ways, Palm's fate was sealed early on when the Pre failed to sell match Apple in sales. After that, "how long can Palm last?" because a fair question.
Which we now have had answered.
I am staying away from offering an opinion of HP's likelihood of success or failure with Palm. I've offered a glimpse at some of the factors I've considered. You may agree or disagree with my questions, answers, and assessment. And you may be right--it's always possible--when you're the analyst.
Please share with me how you look at these issues, the factors you think I've missed, as well as your conclusions.