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What does HP want with Palm?

Web-based OS, or a nice stack of patents?

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Palm, which defined mobile computing, has been bought by HP, which pissed away its stake in the same industry. So can HP do any better this time around?

Palm didn't invent mobile computing; it arguably took the industry several steps backwards in creating a device entirely reliant on its desktop companion. But in doing so the company discovered what people wanted in a mobile computing device and pioneered many of the techniques that have made the iPhone so successful. Thus HP needed to buy Palm not for the innovation itself but for the patents that followed it.

Palm's great insight was to see that users didn't need or want an entire computer on the move. Palm users could take a corner of their desktop computer with them, but a Palm without an associated desktop was next to useless.

That insight enabled Palm to dispense with luxuries such as a keyboard or - on early models - even persistent storage. Your Palm was only a cache of the desktop; if the battery died you just re-synchronised and at worst lost the updates you'd scratched in with the Graffiti recognition system.

That put synchronisation at the centre of everything, with HotSync as the cornerstone of Palm's offering. Back in 2001 your correspondent was developing Bluetooth applications for Palm and iPaq devices. As developers we would come into work, sync our personal Palm devices and then spend the day crashing them with badly-developed applications, secure in the knowledge that they could be synched back at the end of the day, perfectly, every time.

HotSync didn't just copy over diary appointments and contacts: during the process every installed application is offered the opportunity to backup data, or be connected to a desktop equivalent which would be triggered by the desktop HotSync application.

When Microsoft launched ActiveSync we were aghast and unable to understand how Redmond had failed so badly to do something that seems so obvious when you've seen it done well - surely someone at Microsoft had seen HotSync in action? Despite that, all our product demonstrations were on iPaqs: they were much prettier, with colour and noises, and battery life is hardly an issue during a demonstration.

HP did licence Palm's synchronisation software, very early on, but committed to Windows Mobile with the acquisition of the iPaq line as part of Compaq in 2002. The company proceeded to do nothing very interesting with the iPaq line for the next few years.

Meanwhile Apple took the idea of a tethered device much further with the iPhone. Companies like Nokia and Microsoft were making mobile computing devices, but Apple, like Palm, realised that making a mobile device dependent on a desktop application is no bad thing.

HP has pushed out an iPaq phone or two over the last few years, but would like to be doing a lot more. The company's gross margin was 22.8 per cent last quarter, according to Reuters, which compares that to RIM's 45.7 per cent and Apple's 41.7 per cent to explain why everyone wants to get into smart phones - even Nokia managed 32.4 per cent.

But these days anyone doing anything interesting in the mobile computing needs a big stack of patents to back them up, or risk being out-litigated by the competition. The iPaq was cutting edge but it never took off, while Palm managed to file hundreds of patents which fit precisely where mobile computing is heading: "Wireless, radio-frequency communications using a handheld computer", "Wall mount cradle for personal digital assistants" and "Palmtop computer docking system", to pull out just three.

Having a decent stack of patents protects HP against the inevitable litigation it will provoke by achieving any success in mobile computing. The major players are already at each other's throats, so anyone expecting to draw attention to themselves in mobile will need to come in well armed with patents of their own.

That's not to say that HP won't do great things with WebOS, or that Microsoft shouldn't be concerned by reports that the company has given up on its Windows 7 pad. Protected by Palm's patent portfolio HP can enter the mobile market with confidence that it won't get the rug pulled from under it, and if it can use Palm's brand and OS then that's just dandy. ®

Build a business case: developing custom apps

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