Amazon to buy Palm? I hope not

Last night VentureBeat broke a story about a trusted anonymous source confiding to the publication that Amazon was seriously considering snatching up Palm from Hewlett-Packard. At first thought I got excited to hear this news, just like the rest of the interwebs did. Palm is going to be saved! It will finally have a home worthy of its awesome software! The bell no longer tolls for Jon Rubinstein’s baby! And then the tires of my excitement came to a screeching halt. Why on earth would Palm be a good fit at Amazon? It is safe to say that HP will be offloading Palm at a huge discount from the $1.2 billion it spent on purchasing the then-struggling company, but it is highly unreasonable to believe that HP will part ways with the massive patent collection that came with the acquisition. The Palm hardware is no longer relevant as the HP acquisition cannibalized any hardware manufacturing Palm entered the acquisition with, however it is possible that HP might offload mobile hardware with Palm since it wants to exit the tablet and smartphone industries. So that leaves us just with Palm’s WebOS software as the only thing Amazon has to gain from the purchase. Speculates Venturebeat:

By purchasing the remnants of Palm, Amazon would have free rein to redesign webOS to its own liking, and it would be able to further differentiate its Kindle devices from the slew of Android tablets in the market.

That sounds just fine at first thought, but the Kindle Fire already has differentiated itself tremendously from all other Android tablets on the market. In fact, Amazon went so far as to customize and de-Googleify Android for the Kindle Fire that you can’t even tell that Android actually is running underneath the surface. Bringing WebOS in to take over would be disastrous. Amazon clearly has been working on the Kindle Fire for quite some time and it has spent tremendous resources making sure all pieces of the puzzle fit together. The biggest hindrance to replacing Android with WebOS would be the Amazon Appstore. The reason Amazon was able to take the Google out of Android and still stand on its feet was because its Appstore now houses over 10,000 apps. Nowadays, without a heavy app market your tablet or smartphone is doomed. Amazon knew that which is why it tapped into Android’s massive developer pool to bring in the same apps that are on the Android Market via the Amazon Appstore.

If it brings in WebOS then it will have to rebuild its entire Appstore. WebOS does not have a large selection of apps to choose from, and even a smaller selection of TouchPad optimized apps in its catalog. Its catalog is growing at a sluggish rate with major developers like Twitter or Google not even having any sort of official presence in the WebOS app catalog. Even finding third party alternatives is a pain, with the closest Twitter app being a very bare bones replacement. Amazon has invested way too much in the Appstore to ditch it and the potential for growth with Android apps far outweighs the growth potential it will have with the WebOS catalog.

Furthermore, Amazon made it indirectly clear the other day that cloud computing was the future of tablets. The Kindle Fire’s Silk browser is an example of how Amazon is offloading intensive processes from the device to the cloud. Storage is deemed a non-issue with the Kindle Fire as all your media such as movies, TV shows, music, magazines, and other literature are streamed to your device from Amazon’s servers in real time. Slowly but surely Amazon is creating a market for barebones devices that can go toe-to-toe with high-end hardware. Amazon doesn’t need a full-fledged operating system, it just needs something that can cover the essentials. The only thing that Amazon needs to consider is hardware and that’s not something Palm can boast about.

With Android, Amazon has the goose that laid the golden egg. Android’s “open source” mantra allows Amazon to grab Google by the balls, twist gently, and whisper “give me your lunch money” without getting into trouble. The odds of Google completely closing off Android is highly unlikely and Amazon has shown that it doesn’t need the latest and greatest version of Android to achieve its goals (the Kindle Fire runs on Android 2.3, not Honeycomb). Android developers can continue to offer their apps on both the Android Market and the Amazon Appstore without having to recompile or recode their software, as they would have to if Amazon acquired Palm and integrated WebOS into its future Kindles. So is Amazon buying Palm? Don’t hold your breath. It’s an interesting idea, but it will be nothing more than an idea. Until Jeff Bezos proves me otherwise.

Source: VentureBeat

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