Thursday, June 13, 2013

HP, Palm, and Rubinstein

I missed this story yesterday, but think it well worth including in this blog -- CHH.  My comments below are in red.

Jun 12, 2013, 6:04am PDT UPDATED: Jun 12, 2013, 6:37am PDT
Former Palm CEO: I wish I hadn’t sold the company to HP

Contributing writer-
Silicon Valley Business Journal

Former Palm CEO regrets selling the company to Hewlett-Packard, saying, “talk about a waste.” In an interview Tuesday, Jon Rubinstein said he was frustrated with how HP hobbled, and later abandoned Palm’s webOS smartphone platform.

“If we had known they were just going to shut it down and never really give it a chance to flourish, what would have been the point of selling the company?” Rubinstein told Fierce Wireless.  (Well, one point might be that $1.2B was substantially higher than Palm's valuation at the time, and Roger McNamee and Bill Coleman wanted their money out....)

HP purchased Palm in mid-2010 for $1.2 billion, saving the company from what many believed was the company’s slow and inevitable demise. The company’s Palm Pre smartphone excited early adopters, but failed in the consumer market.   (For those of you who never tried it, the Palm Pre was WAY ahead of its smartPhone competitors, EXCEPT for the burgeoning size of the iPhone AppStore apps...  which had erupted in the previous nine months).

In the interview, Rubinstein blamed some of the Pre’s failure on Palm’s decision to sell the phone through Sprint, instead of Verizon Wireless.  (I'd agree, but the lack of apps at launch was a serious deficiency for the dynamics of the day -- Verizon couldn't change that)

“We were negotiating with everybody,” Rubinstein said. “And the Sprint deal was the best deal we could get at the time. Palm was dying when I got there. It wasn't like we had the pick of the litter.”

Rubinstein was a key executive at Apple, brought in by Steve Jobs in 1997 to lead hardware engineering. He’s widely credited with helping develop the iMac, G3 and the iPod. Palm hired him as CEO in 2009, and he led the company’s sale to HP a little more than a year later.  (Usually left out of these stories is the fact that Rubinstein started his career at HP in Fort Collins, CO.  He wrote a compiler for HP's 9836A workstation in 1977, which was a powerful personal computer years ahead of Apple and IBM, and never given any credit by such groups as the Computer History Museum.  Jon stayed several years at HP, but concluded that its computer operations were managed in a hopeless manner.  Some things never change?).

The Pre did things back in 2009—like over-the-air software updates, multitasking, notifications and unifying contacts with messaging—that were firsts were (sic) smartphones at the time. Today, those features are standard in iOS and Android.

HP launched the webOS-enabled TouchPad in mid-2011, but killed the product within months after the launch. The company later abandoned webOS, open sourcing it, then selling it to LG earlier this year in a undisclosed deal so small the transaction had no material effect on its revenue(This is a bit of a snide aside -- the whole Palm deal, at $1.2B, was de minimus for a $132B company.  The tragedy is that WebOS was indeed superior, and one might have envisioned a future where it could have become the Android alternative as HP announced, but couldn't deliver on.  This has a lot to do, I think, with the infighting and dysfunctionality of the various product groups about interoperability.  The failure of the TouchPad in the marketplace --- well, we've covered that before.)

Rubinstein says Palm got a lot of things right, but those things weren’t enough to save the company.   “If you go back at look at our original premise for a lot of the stuff we did at Palm when I got there, I think it's all really played out as expected,” he said.

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