Note to H-P: Rush the Mobile Apps

If I were the CEO of H-P, I would rush to get these mobile apps compatible with laptops, PCs and televisions before Apple, Google and Microsoft.
By Jason Schwarz ,

Being a one trick pony doesn't cut it anymore. If you can't provide my PC, my laptop, my tablet, my smartphone and my software solutions, then you're just a commodity without any real pricing power.

Hewlett-Packard

(HPQ) - Get Report

is sick of being just another commodity, so it went went out and bought

Palm

(PALM)

with hopes of creating a valuable ecosystem of its own.

Consumers demand the ability to utilize the same software on multiple devices. When I purchase a mobile app, it better be available on my phone and my tablet as well as on my next phone and my next tablet. It's this software continuity that creates brand loyalty. Apps will soon be available for use on televisions and PCs as well. This wirelessly distributed software is on a growth trajectory to one day overtake the popularity of Web sites. H-P has been watching this evolution occur without being a major player in it. Now they are. Or at least they hope they are.

Palm offers just over 1,000 apps for its lineup of smartphones compared to 40,000 apps for Android and 180,000 apps for the

Apple

(AAPL) - Get Report

App Store. H-P gets the Palm smartphone brand, the OS and the patents to add to its successful line of laptops and PCs. The obstacle with the Palm brand is that it already has been beaten out by Android as the open source competitor to the iPhone. H-P is going to have to put together an enticing package to get developers to expand the app offerings on this HP/Palm platform. If I were the CEO of H-P, I would rush to get these mobile apps compatible with laptops, PCs and televisions before Apple,

Google

(GOOG) - Get Report

, or

Microsoft

(MSFT) - Get Report

. Merely playing catch-up won't get the job done. They have to catapult ahead of the competition if they want to secure a spot on the ecosystem leaderboard. Can they do it? Should we buy H-P stock? Not yet. Resurrecting the Palm brand in such a crowded market is not a sure thing, but I do think the synergy of the two companies will make each of them stronger. The days of standalone phone companies or standalone computer companies are coming to an end. I expect we will see a lot of consolidation within the industry over the next two years. Without an ecosystem, there is no brand loyalty, and without brand loyalty there is no sustainability.

At the time of publication, Schwarz was long Apple

.

Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.

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