Posted by: Ed Hardy
Palm, Inc. was one of the great “rags to riches to rags” stories in American business history. At one point this company was considered serious competition for Microsoft, but now it’s completely gone. HP played a big role in finishing it off, and some of the details on how this happened have recently come to light.
Palm had its biggest success making a line of eponymous personal digital assistants (PDAs), but struggled a bit when consumer interest turned to smartphones about 7 years ago. The situation became even worse when Apple’s iPhone and Google’s Android OS were introduced a couple of years later. However, under the new leadership of CEO Jon Rubinstein Palm developed webOS and started selling the Pre line of smartphones. While these were widely praised by reviewers they didn’t garner enough sales to allow Palm to remain independent. Therefore, in 2010, the company sold itself to HP.
From here, the story is taken up by Phil McKinney, who was HP’s Chief Technology Officer until last fall and therefore has the inside scoop. He said, in a recent interview with Rick Mathieson:
“[This] was going to be a long term effort. Palm was struggling and HP was stepping in, doing the acquisition, and we were basically going to take three years hands-off. Palm was basically going to get cash infusions, resources, and expertise.”
Unfortunately that’s not the way events turned out. Shortly after the deal had been completed, HP got a new CEO, Leo Apotheker. Instead of three years he gave Palm only one. Weeks after the first webOS-based tablet, the TouchPad, was released, Apotheker decided to kill off the entire webOS product line.
McKinney’s said, “This is an example of not committing long term to the resources and not having patience for innovation.” HP’s board of directors apparently agreed, and Apotheker was fired shortly after the decision to kill off the webOS was announced. But the damage had already been done, and webOS was all but dead, barely continuing as an open-source project.
It’s too bad that we’ll never know what would have happened if HP had given webOS the three years it was promised. Maybe it could have become a serious competitor to Android and the iPhone. Maybe not. We’ll never know.