HP Clears Palm's Deck

It’s the dawning of a new day at Palm. While the purchase by Hewlett-Packard closed last week, everybody was on vacation, so nothing much happened except a few announcements and comments from pundits. But now the vacations are over, and the integration of Palm into HP has started. First, as expected are the layoffs, which are a standard feature of corporate marriages. Redundant employees usually have to go unless they can be moved into new jobs.

But in this merger, HP is clearing the decks of more than excess employees. It’s also clearing out excess products. Starting this week, the price on Palm’s website for the Palm Pixi Plus and the Palm Pre Plus for both Verizon Wireless and AT&T is zero. That’s right, the phones are free with a two-year contract.

There are really only two reasons to give products away essentially for free. One is because you’re trying to gain market share, and the second is to clear inventory for something new. The device giveaway, plus the layoffs, point to HP giving Palm a fresh start. Exactly what will replace the Plus devices when inventory runs out is an interesting, but unanswered, question.

Perhaps HP wants to start putting the HP logo on Palm devices. Or perhaps the long-rumored (and not-so-rumored) efforts by Palm to create new devices are farther along than previously thought, and the Plus series is about to be updated with something better. Or maybe the Palm devices will be replaced with new, more capable devices that will compete more effectively with the latest iPhone and Android devices. Right now, it’s not clear what HP and its Palm division have in mind.

But one thing is clear: HP needs to act fast to consolidate Palm’s place in its universe, and it needs to find a way to produce devices that compete with the market-leading smartphones. The one thing it already has is WebOS, which is highly capable. What it doesn’t have is a snazzy new platform. It needs something that will compete for market share against the iPhone 4, the Evo and the Droid X, and it needs them quickly.

The layoffs of Palm staffers appear to have been very limited, and the fact that the company is obviously clearing the decks for something point to a period of aggressive development by the HP/Palm team. While we probably won’t be seeing Palm’s iPhone killer next week, we could see something significant by the end of the summer. That, followed in quick succession by a series of new smartphones with good app store support, followed by a WebOS-based tablet this fall could make Palm a serious contender again.

Now, if they could only bring back Graffiti, we’d have a touchscreen design that would be more than just another iPhone wanna-be. That would be even nicer.