HP's saucy acquisition of Palm

HP acquired Palm for $1.2bn and maybe there's method behind the madness, why would they want Palm?

The price seems quite high for a mobile company that isn't quite meeting market expectations and though Palm have some nice devices (the Pixie and Pre) and a new operating system (WebOS) they're not selling brilliantly.

HP make PDAs, they're trying to sell them into the enterprise which is where HP do well. Palm used to sell into the enterprise and do well, but they've lost their way and the introduction of WebOS was too late too little and they've been overtaken by Apple with the iPhone, RIM with their Blackberries and Google with Android based systems. HP license Windows Mobile which hasn't been the huge success that both Microsoft and HP would have liked.

So HP's acquisition of Palm suddenly means they have their own operating system WebOS which they can develop, make shiny and integrate on to their own devices and get their mobile devices back into the enterprise.

There's a second reason too, HP want to make tablets (of the computing variety) and they need an operating system, especially since Microsoft have just dropped their tablet plans. WebOS could fit that bill and again would fit well in HP's core enterprise market. It will need some polishing, but HP have got the clout to push it in the right direction. They can develop a creditable competitor to Apple's OS and Google's Android/Chrome systems and Intel/Nokia's MeeGo.

Maybe the acquisition was too cheap?