I suspect this is wishful thinking
H-P and Palm, to be blunt, have failed in the smartphone market. In business, as in life, failure plus failure rarely equals success. But in the conference call detailing the deal, management pushed the idea that Palm's technology and H-P's scale and wealth will prove the right mix.
This is possible, but a stretch. In the high-end consumer segment, the iPhone app store provides Apple Inc. an advantage that will grow steadily no matter how much H-P spends. In the enterprise segment, notoriously cautious corporate IT buyers aren't going to jump off Research In Motion Ltd.'s Blackberry bandwagon. For the low-end consumer, competing with HTC Corp. and Nokia is a great way to generate lousy returns on investment.
What about this deal makes sense, then? Consider H-P's strengths, besides being big and rich. The company sells more laptops than anyone else. Last quarter it sold $6.1 billion worth of notebooks to businesses, and that doesn't count sales in the smaller consumer group.