Amazon has Palm in its shopping cart — will it click Buy? (exclusive)
will it click Buy? (exclusive) — Who will save what's left of Palm from HP's bumbling? It could be Amazon, as the online retailing giant is in serious negotiations to snap up Palm from HP, VentureBeat has learned. — A well-placed source tells us …
Context & Ripple Effects
Palm has been an acquisition target longer than it has been a going concern: Apple made a run at the company before HP won the 2010 bidding war over RIM, and even after the TouchPad's collapse Palm's former chief insisted in December 2010 that it was far from 'game over'. Now, barely a year into HP's ownership, VentureBeat reports serious talks to move Palm again — this time to Amazon.
The pickup was broad enough that DealBook framed the logic as patents while GeekWire argued publicly that the deal 'doesn't make a whole lot of sense' — a split that maps onto the two ways to read it. The rumor lands alongside confirmed reporting that Amazon sells the Kindle Fire at razor-thin margins to drive merchandise sales, and industry talk of a larger 10.1-inch tablet built by Foxconn for the holidays.
First-order effects
- If the negotiations close, HP exits its troubled Palm stewardship after roughly a year, offloading webOS and the brand to a buyer whose device strategy is margin-agnostic rather than OS-centric.
- Amazon would acquire Palm's patent portfolio and an idle mobile OS at what should be a distressed price, given HP's public retreat from the hardware business.
Second-order effects
- DealBook's patents-first framing points to the defensive use case: in a market where Apple litigates aggressively, Palm's IP gives Amazon armor for the Kindle Fire line without committing to webOS as a shipping platform.
- GeekWire's skepticism reflects the strategic problem rivals will watch: folding webOS into Amazon's Android-based tablets would split Amazon's developer attention, so the more likely second-order effect is the portfolio sitting unused while competitors consolidate around iOS and Android.
Third-order effects
- Palm's trajectory — courted by Apple, bought by HP, shopped to Amazon within two years — shows pioneering mobile platforms becoming tradeable IP assets rather than independent operating systems, with a shrinking set of giants as the only plausible owners.
- If Amazon buys primarily for patents, it reinforces a pattern where device makers' valuations hinge on litigation defense as much as products, pressuring smaller hardware players toward the same exit path.
The trend: Mobile operating systems are consolidating from standalone platforms into patent portfolios traded among a handful of consumer-tech giants, with Palm the clearest case study.