Original URL: http://www.theregister.co.uk/2010/04/15/nokia_buy_palm/
Why doesn't Nokia buy Palm?
It's a perfect fit, and going cheap...
Comment Nokia has endured a painful two years - a kind of corporate Lost Weekend. Instead of alcoholism, Nokia found itself distracted by completely avoidable, self-inflicted corporate restructuring and IP issues, and so technologies we saw two years ago will only start to appear in phones next year.
This was very bad timing. Instead of capitalising on its success with the N95-8GB, we find that Blackberries are now ubiquitous, and the iPhone has raised the bar for what the mobile user expects from a phone: it should just work. Well, this week Palm has put itself in the shop window, and Nokia should seize the opportunity.
Palm's WebOS is outstanding - arguably the best on the market. It may be stretching it a bit to claim that Palm has the IP portfolio of an Apple - but WebOS ticks all the boxes. It should keep whoever acquires it competitive for the next ten years. Even better, the cost of acquiring these goodies is apparently around $300m to $400m. That's a fraction of the $8.1bn Nokia paid to acquire Navteq three years ago, and Nokia has vowed to give away the assets of that acquisition. Acquiring Palm would be a sneeze, and give it a world-beating UI in phones from next year.
The biggest arguments against a Nokia acquisition are pride, accusations of strategic incoherence, and fitting it into its software portfolio. But Nokia can actually acquire WebOS and keep everybody happy.
Nokia has committed to Linux for smartphones, tablets and mini-notebooks, and Symbian as the long term replacement for the high volume S40. There's no reason for either of these to be moved aside.
If it wanted to, Nokia would find a warm reception from ODMs bruised from the Nexus One experience and increasingly nervous about Google's "autistic approach to relationships". WebOS is much slicker, and doesn't have a giant advertising company behind it waiting to skim the profits. If you were HTC, would you really want to stick with Android? The fact that HTC is reportedly in the hunt for Palm itself answers that.
It's going to be a year before Symbian^4 and competitive Meego devices appear anyway. In that time, it should be able to crank out its first range of WebOS products.
As for accusations of incoherence, these are only thrown at you when you're losing - they're quickly forgotten if you succeed. You simply need to give your product development teams the best resources to win, and Nokia is much stronger with WebOS than it is without it.
A Palm acquisition shouldn't mean too much realignment. Symbian can return to being Nokia's proprietary in-house OS, which is what they should have done with it in the first place. The wasted Long Weekend will soon be forgotten, if not so easily forgiven. And Meego can continue to be developed for set top boxes, mini instant-on laptops, and tablets.
God Bono: Tero Ojanperä
One can only guess at what the long-term effect Nokia's three year smartphone hiatus has had on the company's 'brand reputation' in status-conscious Asia and other emerging markets. Across much of Asia the word "Nokia" simply translates as 'best phone': it's the manufacturer you choose if you can afford it - and even if you can't - to show your status. The status symbol for the new middle classes now is a Blackberry or an iPhone.
Palm too has made many mistakes in the past two years, some of which are outlined by Jean-Louis Gassee here, in a must-read note. (In a different era, Palm bought Gassee's Be to provide its future mobile OS.)
I think it's a perfect fit. Nokia still has the radio engineering expertise, integration know-how and the scale and volume to make great phones at low cost. It's proved it doesn't have a clue about UXP, and software development is harder on Nokia than it is anywhere else. There are two problems that WebOS solves nicely and cheaply. It would be very short sighted not to make the acquisition.
And doesn't Tero Ojanperä already practically live in Bono's leather trousers? That should help with striking a price. ®