Palm Should Say “NO” to HTC, and “YES” to Cisco

Okay, so my wife is furious with me, and I can’t say I blame her.  Why?  I’ve done nothing but obsess over which company is “good enough” to buy my beloved Palm.  Yes, as we discussed, sale of the company isn’t the only option, but if push came to shove, who would I want to own webOS, if not Palm?  The answer has surprised even me:  CISCO Systems.

…  Just bear with me for a minute, honey. Bear with me. I’ll be there for dinner shortly.

I know a lot of folks including Engadget, ZDNET, and David (our site’s illustrious founder) are big fans of HTC buying Palm.  After all, they made the Treo 650 and Treo Pro, right?  Palm needs HTC’s sexy body, and HTC needs Palm’s brains?  Match made in heaven, right???  Yeah, maybe.  Just maybe.

… But not so fast.

As everyone knows, HTC is in a back-and-forth with Apple.  Turns out the lawsuit-happy yahoos from Cupertino are suing HTC about almost 20 patent infringements.  HTC could fire right back with Palm’s immense portfolio of patents.  All they’d have to do is buy Palm, fire their entire staff, use webOS as toilet paper, and they’d still come out way ahead.  … Okay, I realize I started out with the least likely scenario, but let me finish:   HTC is committed to other platforms at the moment and is doing quite well from it.  They’re considering an OS of their own, but there’s no guarantees that webOS suits their palate.  For now, they’re doing quite well pushing WinMo, and especially Android devices.

Far-fetched? ... Maybe not!

The most likely scenario?  Check out Androinica’s blog on this, titled “Hey HTC Palm is Yours for the Taking!” The way he sees it, HTC should assimilate webOS into Sense UI on top of Android.  While we cringe at the idea, let’s face it:  webOS comprises a tiny portion of marketshare, and it’s dwindling.  Meanwhile, Android is on fire.  HTC may very well choose to go where the going’s hot.  To presume that they’d get off the Android train so quickly for a little-known webOS is presuming a bit much.

Now…  Cisco Systems. When I first heard that they were considering a purchase of Palm, I was surprised. But after a while I let the idea sink in, and did some reading.  CISCO is an American-based company best known for their networking and communications technology products and services, but they’ve really made a strong push into the consumer market over the past six years (think Mino Flip camcorders, Linksys routers).  Not only that, they’re making big pushes into Voice-over-IP (VoIP) and 4G networking.  Front-facing cameras, as Palm News Daily suggests, are the future of mobile communications and apps.  What better way to dive into the world of high-speed mobile carriers than buying Palm? With a great webOS and patent portfolio that they can plug into all manners of devices?  (Think bigger than just phones, people!  We’re talking all sorts of portable electronics!)   They certainly have a bunch of cash (market cap is over $150 billion!), and know how to market themselves.  There’s also a personal history, here: Ken Wirt, Cisco VP of Consumer Marketing, used to be SVP for Worldwide Marketing at Palm from 2001-2006. Oh yeah, and did you know Cisco is based in San Jose, CA … a fifteen minute car ride from Sunnyvale?

In short, I like CISCO because:

• Palm seems like a logical extension into the world of mobile devices and services.  Cisco has no mobile presence, so will likely keep the Palm name.
• WebOS is an excellent fit for their consumer electronics aspirations. They’d do the opposite of scrap it.
• They’ve got lotsa cash (in a bidding battle, they’d win).
• They’re not in a cat-and-mouse game with Apple so no need to use Palm as a pawn at all.
• They’re American-based, right down the road from Palm, and there’s a bit of a personal history with personnel.

If I had my pick, I’d want Palm to rise from the ashes all by themselves, or possibly license webOS to a good hardware manufacturer (*gasp* like HTC).  But the more I think about it and the more I read, I’m silently praying that, if someone else were to pick up the reins, that it would be Cisco Systems.  It’s the only acquisition that has made me think bigger than just cell phones:  there would be so many untapped opportunities for webOS to grow without being scrapped or assimilated, and Palm would hopefully keep its identity.  What say you guys?

UPDATE! (4-20-10) Want some more evidence that acquisition of Palm may be a good fit for CISCO’s mission statement?  Watch the video below (sorry, no YouTube link):

– Thanks to singersorel for the video link!