“HP’s announced acquisition of Palm gives it an entry into the fast-growing smart phone market—but the move has implications far beyond cell phone hardware,” said Tina Teng, senior analyst, wireless communications, for market researchers iSuppli. “The battle for dominance in the high-tech world increasingly is focused on the mobile Internet. Any company that can manage to control the flow of revenue from wireless data users— coming from subscriptions, ad sales or app store revenues—stands to benefit enormously. With the Palm purchase, HP has positioned itself as a player in this great technology battle.”
Smart phones represent the hottest segment of the cell phone market. Worldwide smart phone shipments are set to rise to 247 million units in 2010, up 35.5 percent from 182 million in 2009. In contrast, total cell phone shipments are projected to climb to 1.28 billion units in 2010, up 11.3 percent from 1.15 billion in 2009.
Palm was the world’s 10th-largest smart phone brand in the fourth quarter of 2009, accounting for 1.5 percent of unit shipments. Palm’s share of the global smart phone market has remained flat during the past year, with the company commanding 1.3 percent of shipments in the fourth quarter of 2008.
While Palm has made limited headway in the smart phone market so far, the company’s Pre smart phone offers significant advantages compared to Apple’s benchmark iPhone.
“Palm’s webOS appears to be superior to the Mac OS X used in the iPhone in the crucial area of multitasking capabilities,” Teng said. “This is a key point of differentiation, combined with the product’s multi-touch display.”
Based on pricing from June 2009, the Palm Pre carried a bill of materials cost of $170.30, according to iSuppli’s Teardown Analysis service.
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