If history can help promise the time to come , then Hewlett - Packard has a good shot at aptly put up Palm , analysts say .

On Wednesday , HP announced plans to buy the legendary developer of the Palm Pilot , the first successful personal digital assistant , for $ 1.2 billion .

HP has done well historically when buying party in industries in which it already operates . For case , HP bought 3Com and was capable to immediately tot up breadth and depth to its exist networking portfolio , said Charles King , primary analyst at Pund - IT .

It also purchased EDS , which importantly supercharge its services business and put it in contention with market place leaders like IBM . That acquisition seems to be going well so far , although time will differentiate , King said . “ It ’s arguable they overpaid for it , and exactly how long it ’s go to take to yield off that $ 14 billion learning remains to be seen , ” he said .

Despite all the turmoil at the time , the Compaq steal is also judged a success by many analysts . “ The Compaq acquisition turn out really well , ” aver Frank Gillett , an analyst at Forrester . HP is now number one in term of PC building block shipped worldwide .

HP has not always been successful when buying company in promise of entering a new mart , however . For example , a “ notable failure ” was HP ’s leverage of Bluestone , Gillett said . HP desire to get into the software package platform line of work but did n’t fulfil on the acquisition well and at last betray , he said .

With the Palm acquisition , HP seems to be hoping to grow around its existing , put behind bars French telephone business and gain a foothold in the slate market , still in its babyhood .

“ I believe that HP has been very foiled at trying to sell computer hardware using somebody else ’s o and compete on low margins and not have control over the end - drug user experience , ” Gillett said . The Palm acquirement has the potential to rejuvenate HP ’s smartphone occupation by giving it control over both the ironware and the software of the end product and offering that same kind of ascendence over future slate products , he allege .

HP sells an estimated 200,000 Windows Mobile devices annually , said Ken Hyers , an psychoanalyst at Technology Business Research . It has bring out a ticket product that hunt Windows 7 but on Wednesday said it hopes to use WebOS , Palm ’s computer software , on slate computer .

It ’s unclear how HP ’s relationship with Microsoft might change after the deal is complete . On Wednesday , HP Vice President Todd Bradley said that Microsoft would continue to be a strategic mate for HP , but it was uncertain whether he meant in the earpiece line or only the PC business . “ Generally speaking , it ’s bad news show for Microsoft , ” King allege . Even if HP continues to progress phones and slating run Microsoft operating systems , the WebOS will likely steal some grocery store part from Microsoft .

HP said on Wednesday that it plan to run Palm as a subsidiary , and it has a track record of doing so with late acquisitions . For example , HP now possess Snapfish and operates it as a relatively autonomous subsidiary , Gillett said .

It will need to give Palm a bit of autonomy so as to well attract developer , Gillett said . “ If they want to educate relationship with developer , they do n’t want it to melt into HP . It needs to be a separate standalone matter , ” he order .

The analysts expect that like Snapfish and 3Com , HP will hold back the Palm trade name . “ You do n’t pop a brand that is as deeply establish as Palm is unless the brand name is damaged and I do n’t imagine it is , ” King said .

There are still a few unknowns that mayhap even HP has n’t worked out yet . “ The interrogative is , will they licence the Palm OS ? ” Gillett wonders .

Like any of the acquisitions manage by HP CEO Mark Hurd , the integrating of Palm will likely involve a muckle of operational lapse , King said . multitude in Palm ’s merchandising and sales grouping are most likely to lose their job , but the engineering gift will likely be highly valued , he said . “ If EDS and 3Com are a way to judge this , I believe they will keep the folks on board who understand the Cartesian product and they ’ll maintain the brand . If you look back at EDS , 3Com and now Palm , these are all companies that had well - established firebrand but where the caller themselves had seen better days . ”