This weekend was a busy one for HP and their newest brand, Palm. Not only did Palm’s app store, PreCentral, stop working for Pre and Pixo users this weekend, but the SEC released information on the events that lead up to HP’s aquisition of Palm.

No apps for you

If you were a Palm Pre or Pixo user this weekend making an app purchase, you may have found yourself staring at an error message instead of your new app. This is because of an outage on PreCentral, Palm’s version of Appple’s App Store on iTunes, this weekend. Palm quickly fixed the problem and those who were charged were eventually able to download their apps, but it highlights some of the problems at the company and why other potential suitors might not have wanted to buy.

Somebody give me $5 to go

SEC documents reveal that HP was in a bidding war with four other unnamed companies (rumors include Dell, HTC, and Lenovo; Nokia had publicly turned down the chance). Up to 14 companies had inquired about purchasing either the company, the intellectual assets, or licensing webOS. Palm’s board seemed divided on what avenue or offer to take, but two things are clear: HP had both the highest and most favorable bid for Palm. It’s clear now why HP wanted Palm so badly: webOS. Why HP chose to buy the whole company and not simply license the OS is another question we don’t yet have the answer.

WebOS to replace Windows 7 in HP slate to be released in the third quarter

Shortly after HP announced the Palm acquisition, HP said it would be “doubling down on webOS,” with near-term plans to “scale it across multiple connected devices.” We predicted that HP would deploy a webOS-based mobile device slate and now, according to an unsubstantiated report at the Examiner, an “insider at HP” has informed the site that “a webOS tablet under the code name HP Hurricane could be released the third quarter of this year.” This corroborates what HP said about taking webOS to places it has never been, there was strong suggestions that the HP Slate was being killed, and now, people close to the HP camp have given a name to a purported webOS tablet slated for Q3. Stay tuned for more info from Mobile Devices.

HP may be “killing” the Slate to get out of licensing agreements it had with Microsoft for Windows 7

A day after announcing the purchase of Palm, HP was rumored to be killing the Slate which was to be released in June. Microsoft had announced the Slate project back in January just ahead of Apple’s announcement of the iPad. So why would HP be killing it now, just one month away? HP insiders are rumored to be saying that it was because Windows 7 ran too slow on it, but the timing is just too coincidental. One of the biggest reasons HP bought Palm was for their webOS, which would give them full control over the operating system and reduce their relationship (read: expenses) with Microsoft.

Legal Tactics

HP more than likely had legal licensing agreements lined up with Microsoft for the Slate since January, long before HP knew they would be acquiring their own operating system. Killing the project is equivalent to eliminating someone’s position instead of firing them outright. The result is the same, but the legalities of the maneuver are different. In the same way, if the agreement with Microsoft was for the Slate then all HP would have to do is kill the name and make an end run around the legal agreement. Expect a ‘phoenix’ version of the Slate reborn with webOS coming later this year.

5/12/2010 UPDATE: HP rumored to be launching the slate under the codename, Hurricane, in the third quarter of 2010. Read more.

On April 28th HP announced the acquisition of Palm for $1.2 billion. Nokia had passed on the opportunity and Lenovo was rumored to be considering it so it was a bit of a surprise when HP came out as the new owner.

So why would HP want to buy Palm? Aside from the brand name, Palm did not have a lot going for it lately. Market share has been declining for years and Palm’s hail Mary pass with the Pre and Pixie PDA phones failed to gain back much of that share. But HP already has its own line of PDAs, which run flavors of Microsoft operating systems. Palm had its own proprietary operating system, webOS, which HP now owns. Look for HP to leverage this OS on all of its mobile devices from PDAs to tablet PCs. HP’s new slate PC was to run Windows 7, but we may see a webOS version too.

Competition

WebOS already ranks fourth behind Microsoft, Apple, and Google (Android and ChromeOS) for operating systems so HP has a lot of work to do, but unlike Microsoft or even Apple, HP has a large base of mobile devices from music players to PDAs to phones to tablets to put webOS on, which could catapult the OS’ popularity and market share worldwide. One thing is for sure, HP will now be able to control their own software, which they have never been able to do before and which pits them in the company of players like Apple, which uses the iPhone OS for the Iphone, iTouch, and iPad.