HP needs to buy RIM now or shut down Palm.
The Palm platform, WebOS, is very good, but if no one uses it that's irrelevant. Its Touchpad tablet is a dud. Who knows when new WebOS phones are coming out.
Mobile is a platform game, and in a platform game there is no middle ground between going big and going home. And Palm alone isn't cutting it.
So now HP has a choice. It can decide it still wants to become a software platform company, which is riskier but potentially more lucrative, and it needs to buy scale and distribution and that's RIM. Or it needs to decide like Dell that it's better at doing commodity hardware based on Android and Windows, avoid the sunk cost fallacy, and shut down Palm now even though it bought it for $1.2 billion a year ago so it can focus on competing with Samsung and Nokia.
Either of those choices is defensible. Each has its pluses and minuses. But the decision time is now.
Either buy RIM, or shut down Palm.
Why RIM?
First of all, RIM is in play. RIM has no long-term future as an independent company.
But more importantly, the two complement each other. In mobile, HP has good software but no hardware, and RIM has good hardware but no software.
(What about Microsoft? It would have made sense once for Microsoft to buy RIM, but now it can't because of one word: Nokia. Nokia and RIM are direct competitors in the only growth markets they have left, the mid/high end in emerging markets, and Microsoft made Nokia its favored partner. If it goes and buys RIM, it has zero credibility.*)
Let's face it: RIM's next software platform, QNX, is going nowhere. It needs a new software platform. In fact, it should have bought Palm when it had the chance--webOS is a great fit. It plays well with keyboards and is geared toward facilitating communications, which is what BlackBerry is all about. And yet it has the modern features like touch, social and easy third-party development that a current-generation platform needs.
And HP needs RIM. If it wants to own a software platform, it needs scale and distribution, and it needs it fast. It also needs to get better at churning out tons of good phones. RIM isn't very good at making touchscreen phones, but its keyboard phones are fanatically beloved by zillions of people. And RIM is strong in enterprise sales and enterprise communications software, which has all kinds of interesting potential synergies with HP under CEO Leo Apotheker, who comes from the enterprise software industry.
* Unless Microsoft buys RIM and Nokia, but that's a whole 'nother can of worms.
