HP buys Compaq: Is the writing on the wall for Jornada?

NEWS HP's shock purchase of Compaq surely means the end for HP's struggling PDA offering, Jornada, in the face of the market-leading iPaq. The new company has not confirmed whether the $25bn merger will see the end of any, or all, competing product lines. But it has pledged to cut $2.5bn of costs by 2004, and wasting money developing two competing PDA lines would make little sense. Chris Jones, PDA analyst at Canalys, said: "If they do only keep one brand, then based on the sales of the two, you'd expect the iPaq to be the one." According to Canalys's figures, the iPaq outsells HP's handheld by a factor of five to one in Europe, and the iPaq is also the leading Microsoft-based handheld in the US. iPaq also has in its favour that it already uses Intel's StrongARM processor, whereas Jornada models use cores from SuperH. Microsoft is understood to be supporting exclusively ARM4-based processors in Merlin, the forthcoming version of the Pocket PC operating system used by Compaq and HP. However, there could be a branding problem if the merged entity keeps the HP name. HP iPaq just doesn't have the same ring to it...