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HP’s Deal of the Century, Android’s Short Life

Last week was a huge week for news surrounding smartphones and iPad-like tablets. I mentioned a few weeks ago how the market was moving to vertical integration, which was placing platforms like Android at risk, but I didn’t expect HP to move this quickly by buying Palm and getting its own OS.

In addition, the lawsuit from Apple targeting HTC’s Android phones, coupled with HTC having to license even more code from Microsoft to cover the same phones, has likely turned Android into the most expensive OS in its space — and virtually none of the money is going to Google, which has to be a first.

I’ll close with my product of the week: a scanner from Fujitsu that rapidly turns large physical documents into PDFs. It is potentially the iPod of scanners.

Apple’s Bad Week

During much of the last two weeks, the conversation has been dominated by first, a lost fourth- generation iPhone prototype that had been left at a bar and then sold to Gizmodo, and then two fourth-generation iPod touches showed up on eBay, suggesting Apple is getting really forgetful in its old age.

Apple had a local police agency it was connected with violently break down the door of the blogger who got hold of and reported on the lost iPhone, which had number of us recalling the “1984” ad that introduced the Mac and thinking that Apple had become Big Brother.

Its image was taking a beating, because it appeared that either Apple was getting senile (losing stuff) or it was becoming a despot — neither of which was likely to sit well with either politicians or many current supporters (like bloggers who saw the attacked blogger as one of their own).

Last Wednesday,HP and Palm took a shot at Apple right between the eyes. Apple was likely thinking that Palm was dead (I know I was) and suddenly HP, playing Voodoo Doctor (HP had previously purchased a company called “Voodoo”) brought Palm back to life and sent it after Apple. Sounds like a B horror movie: “Attack of the Apple-Eating Palm Zombie!”

Both HP and Palm have a serious dislike for Apple. For HP it goes back to when Apple tricked the company into killing its early iPod competitor and then locked it into a horrid contract to clone the iPod that Apple used to lock HP out of the lucrative iPod market until Apple owned it.

For Palm, which executed horribly after having the first phone that ever eclipsed the iPhone, it looked as if there were Palm employees who were paid by Apple to sabotage the product launch — it was done so badly. I only say this because I’ve actually seen it done before, and the Palm mistakes were so pervasive it looked as though there was actually a plan behind them.

HP won’t allow Apple to trick it again, and Palm will suddenly have a company with strong internal security and the resources of a major multinational backing it up. On paper, the two firms are more powerful than Apple, and while they will still have to execute, this may be the best shot across Apple’s bow we’ve seen in more than a decade.

Recall I covered some of the technologies out of HP’s lab that could potentially make the iPad obsolete last month and that the WebOS can easily grow to cover tablets, and suddenly we have a horse race.

Android RIP

Google’s been having a tough year with Android. First Apple sues HTC for violations of Apple’s intellectual property, and it becomes clear that Google has no defense against this kind of expensive attack, and then Microsoft convinces HTC to license its technology to cover Android.

A rough back-of-the-envelope calculation suggests that HTC is paying between US$20 and $40 for this license to Microsoft, and the litigation cost and reasonable risk to Apple is probably twice this, suggesting the real cost of Android may be between $40 and $80 a phone — or the most expensive phone OS currently being sold on the planet. And, if you take into account that Apple doesn’t license, you might conclude that after paying all of this money, HTC might still have to abandon Android.

This likely goes a long way toward explaining why HP was able to get approval to buy Palm so it could acquire the only patent portfolio that — combined with its own — could exceed Apple’s, and it is already broadly cross-licensed with Microsoft for its own stuff.

There’s only one Palm, though, and you have to think the other Android vendors are starting to reconsider their choices. They thought this platform was free from Google and, apparently, while they still don’t pay Google anything, at $40 to $80 it is a massive distance from the price they thought they were paying.

Chinese manufacturers, largely as a result of Google’s China problems, were already having issues with Android, and Motorola had already moved to ship Bing on its Android-based phones there, showcasing part of this problem.

Wrapping Up: The Second Birth of True Thin Clients

It’s easy to forget that HP is the largest thin-client and blade PC vendor in the world, and it has had huge issues creating a mobile thin-client device. iPad-like tablets, iPhone-like phones and webOS-based netbooks could become that mobile client, taking what was the PC market in a new direction and resulting in a wake-up call for Microsoft as well.

I think this Palm/HP deal is potentially one of the big things that could define this century, and its potential is, as yet, largely unknown. With one move, HP gave Apple, Google and Microsoft a huge surprise, and when you do that, you’ve got to bet the impact on the market and the world will be huge.

Product of the Week: Fujitsu ScanSnap S1500 Scanner

Product of the Week

I ran into this product by accident as I was looking to retire my FAX machine and finally move into this century and fully to email attachments.

Fujitsu ScanSnap S1500 Scanner

Fujitsu ScanSnap S1500 Scanner

The Fujitsu ScanSnap S1500 scanner is a one-trick pony, but it’s one hell of a trick.

It is a high-speed sheet feed scanner that connects to your PC and creates a PDF you can send in seconds. It scans at a whopping 40 pages a minute, feeds like you wish a fax machine did, and does it at 600 dpi for color, grayscale and black.

At $419, it is expensive for a personal scanner, but once you use it and realize all the time you’ll save if you scan a lot of documents, it is well worth the money.

Fujitsu ScanSnap S1500 Scanner

Fujitsu ScanSnap S1500 Scanner

When not in use, it folds down cleanly into a compact box, and it is such a dream to use, I’m sorry I didn’t buy one months ago.

This idea of being able to do one thing you need to do incredibly well goes to the core of what made the iPod successful, suggesting this may be the iPod of personal scanners.

Because I never thought I’d get excited about a scanner, and I’m clearly very pleased with this Fujitsu ScanSnap S1500, it clearly is an ideal choice for my product of the week.


Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.

1 Comment

  • Good luck to HP is all I can say. Because Apple is on a roll and it does seem that in the media and for many Apple fans that Apple can do no wrong. Even busting doors down did not seem to wake up the media. What Apple does better then anybody is preparation.

    They seem to get a product right except for a few glitches. Android and many others who have tried seem to get it half right but lack getting the attention Apple does with a product launch. Until someone like HP with enough money can overcome this Apple media. Apple will continue to be the market king. Even though they may not have the best stuff.

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