April 30, 2010 / 9:01 PM / 7 years ago

HP tablet plans draw interest after Palm deal

<p>The new Palm Pre cellular phone can be seen in New York June 3, 2009.Lucas Jackson</p>

SAN FRANCISCO (Reuters) - Hewlett-Packard Co hopes its planned $1.2 billion acquisition of Palm Inc will not only give it solid foundation in the growing smartphone market, but also provide it with a platform for other mobile devices, including tablets.

HP has made it clear that its plans for Palm, an early pioneer in handheld devices, include products beyond just smartphones.

Todd Bradley, who leads HP's PC unit, said on Wednesday that Palm's webOS operating system gives the company a unique platform for "connected products" including tablets, or what HP calls "slates".

Apple Inc's high-profile launch of the iPad has set the early standard for the tablet category, even as rivals prepare their own offerings.

Dell Inc, Toshiba Corp and many others are expected to launch their devices this year. The market for tablets is expected to grow to as many as 50 million units in 2014, according to research group In-Stat.

HP has been working on slates for some time, long before the Palm deal was on the radar. Phil McKinney, chief technology officer of HP's PC division, said earlier this year that the company first explored the electronic reader category before shifting focus to devices that offer a full multimedia experience.

HP's first slate emerged in January. The roughly 10-inch touchscreen device ran on Microsoft's Windows, and the company had been trickling out teaser videos for several months, although it never officially announced a launch date.

However, according to the technology website TechCrunch, HP has now scrapped its plan to launch a Windows tablet, just days after Wednesday's deal to buy Palm. TechCrunch cited a source who had been briefed on the matter.

An HP spokeswoman declined to comment on the report. Microsoft also declined to comment.

But Rob Enderle, an analyst with the Enderle Group, said on Friday it would not surprise him if HP abandoned the idea of a Windows tablet.

"When they bought Palm, this is what I figured was going to happen," he said.

Enderle said the HP Windows device had "serious problems, it was too heavy and it didn't perform well. I think Microsoft takes the hit on this one. HP wanted it to do things that it just couldn't do."

Some industry watchers have said Palm itself was working on a prototype tablet device based on webOS, but that development was hurt by a last of cash. With HP's deep pockets, that will no longer be a problem.

Palm did not immediately respond to a request for comment.

The question is when such a tablet might be ready for the market.

Gartner analyst Ken Dulaney said on Friday he now doesn't expect an HP tablet device -- based on Palm's platform -- until next year, even as the tablet market starts to catch fire with consumers.

Many analysts expect Apple to sell 5 million or so iPads this year.

"If we assume that they already have something started, we have to assume they were doing it on the cheap," Dulaney said. "Now, even with some gas in the tank, it's still going to take some time to get it going. Plus, the app store is just not there yet."

"You've got to be sure you've got it right before you launch. The little things matter in this business."

Apps are seen as crucial to the success of mobile devices. Apple's App Store has more than 200,000 apps, while Google's Android Market tops 38,000.

By contrast, Palm's App Catalog has around 2,000.

HP has also been developing devices on Google's mobile platform. It just launched an Android netbook in Spain.

Reporting by Gabriel Madway; editing by Carol Bishopric

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