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A key question on the minds of analysts is how HP plans to to integrate Palm, the onetime mobile pioneer it recently bought for $1.2 billion, into its businessSilicon Valley titan Hewlett-Packard (HPQ) is expected to post strong results when it reports earnings Tuesday, reflecting increased consumer and business technology spending. But a key question on the minds of analysts is how HP plans to integrate Palm, the onetime mobile pioneer it recently bought for $1.2 billion, into its business.

In short: Will HP be able to leverage Palm's well-regarded -- if underutilized -- software platform, WebOS, to make a credible challenge against mobile leaders Research in Motion (RIMM), Apple (AAPL) and Google (GOOG)?

It's a long-shot at this point, says Broadpoint AMTech analyst Brian Marshall.

Tough Competition

"The smartphone market is a three-horse race with Apple, Google and Research in Motion, and I don't think HP will be able to fix Palm's issues," Marshall says. "I personally would have preferred to spend $1.2 billion on an enterprise software firm as opposed to a consumer-oriented struggling smartphone play."

There's no doubt that HP faces an uphill climb in the mobile space -- which is as competitive as it's ever been. The three market leaders all have strong momentum: Research in Motion's BlackBerry models continue to be popular with business customers, as well as a growing percentage of the greater public. Apple's iPhone is simply the hottest gadget in the world -- save for the iPad, of course -- and it's poised to get hotter with the release this summer of the iPhone 4G.

Meanwhile, Google's Android mobile operating system is spreading like wildfire and now powers almost 40 devices, including well-regarded models like Verizon's Droid and Incredible, and Sprint's upcoming HTV Evo 4G.

HP Needs Big Marketing Push

Against this backdrop, it's hard to see HP crashing the party, at least in the short term. Indeed, it will take HP many, many months to integrate Palm into its business. And then, once the hardware giant has figured out its strategy, it will take a massive marketing push to convince users to take a chance on the new platform -- something Palm simply couldn't afford on its own.

"Without significant increase in spending to woo channel and software partners, HP's acquisition of Palm will likely fail," Rodman & Renshaw analyst Ashok Kumar said in a note to clients cited by Fortune. Analysts believe HP will try to use WebOS to power a new generation of smartphones, netbooks and tablet computers.

Last quarter, HP reported a 25% jump in profit in a sign that consumers and companies are boosting their tech spending. The company also raised its 2010 outlook, citing "accelerating" market activity. For the most recent quarter, analysts polled by Thomson Reuters are expecting the company to report earnings of $1.05 per share on revenue of $29.8 billion.

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