Oops, I meant, if the market is potentially $100 billion, then just 5% would amount to $5 billion, which is a return on the investment.

Sorry for any confusion.

Palm OS started the smartphone segment. They now have something they’ve never had before – enough cash and a strategic context that gives them a new clarity of meaning.

Part of the success for Apple and RIM is in owning both the hardware and software, so that the user experience is stable and reliable. HP can now do that, having acquired what was the best OS available, and arguably the best OS out there.

webOS’s lackluster sales are no more an indication of quality and technological merit as VHS winning out over Beta. We all know Palm’s corporate and marketing savvy were both sorely lacking.

HP is a solid brand, a solid company, with respected technological credibility. They have a global perspective, and a number of outlets for the value of webOS, from smartphones to tablets. Each space needs competition:

- the enterprise space has been left to RIM since…Palm fell asleep at the wheel.
- the tablet space can’t be dominated by Apple because PC people want an alternative
- HP had Slate but Windows is the wrong OS for it. Mating webOS to Slate immediately makes Slate a viable alternative.

If the smartphone industry alone is potentially a $1.2 billion market, and an HP device with webOS functionality can garner just 5%, that’d be worth $5 billion from a $1.2 billion investment. HP was once a player in the PDA space; the iPaq it bought from Compaq was respected although quickly became stodgy running Windows. But the hardware was not overly criticized, so HP can do it. Their desktops and laptops have their fans, they can build machines. And this speaks nothing of their server technologies… HP generates $10 billion in operating income – they’ve got stability, and a global, long term view, and they can see webOS fitting into it.

The biggest smartphone seller is RIM, which is entrenched in the work environment, and that’s pretty much all RIM does. If HP/webOS can take a significant bite out of that (just as RIM set out to dethrone Palm), then HP/webOS can grow incredibly without ever having to take a swing at iPhone.

And, when it does make a phone that’s geared more for entertainment than work, the webOS is a gorgeous OS with all the capabilities of iPhone and more.

There’s plenty to care about.