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HP exits phone and tablet market

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 HP Palm 19th August 2011

Last year, HP appeared to throw struggling smartphone maker Palm a lifeline by buying it for $1.2bn. Today, HP announced that it was killing off its smartphone and tablet products, and was even considering selling off its popular PC division.

This move effectively kills off Palm, a company that was synonymous with the PDA boom of the 1990s, but one that could never quite reproduce that success when it came to smartphones, despite trying for several years. Palm had many loyal fans over the years, but HP effectively killed off the brand when they announced their latest (and last) devices earlier this year.

Palm's last gasp was the webOS operating system, a very well regarded and efficient OS for smartphones and tablets. But the smartphone market is extremely crowded and is very competitive, and no tablets so far have been able to compete with the iPad, and HP seem to be very badly hit with reports that their HP TouchPad devices are basically hanging around the retail channel unsold.

 HP Pre 3 It's worth remembering that this isn't the first time that HP killed off their smartphone line. Before Palm, HP had a range of iPaq smartphones that were developed from technology acquired when they bought Compaq, but they too met with limited success.

This news comes shortly after news of the takeover of Motorola by Google. HP's exit from the smartphone market marks a shift towards software and services from hardware, and Google itself is mostly a software and services company. Motorola fans and employees may now have an uncomfortable feeling having seen what happened to Palm under HP. Remember too that there are rumours that Microsoft may well want to acquire Nokia, which would be another case of a hardware manufacturer being bought by a software provider.

It's a sad end for the Palm legacy, but frankly one we have been predicting for years. It's possible that other manufacturers may follow - for example, LG's handset business has been doing pretty badly recently and that Korean manufacturer may simply decide to cuts its losses and walk away. We think that this would be a very bad thing for consumers and the industry, but perhaps the unthinkable is no longer so unthinkable after all.


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