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HP to buy Palm for $1.2 billion

updated 04:10 pm EDT, Wed April 28, 2010

HP makes major play in phone business

HP today made a major move into smartphones by announcing it would buy Palm. The deal is worth $1.2 billion and should be completed by July 31st. Palm chief Jon Rubinstein should remain at the company in the transition.

The move could be critical for both HP and Palm. For Palm, the move may have saved the company as it had a near-disastrous winter quarter and was known to be actively shopping itself around to companies with concerns that it might not survive independently.

HP's move also signals a sea change in its mobile strategy. To date, it has relied exclusively on Windows Mobile for smartphones and has rarely had success. Few carriers have negotiated deals and have often downplayed the phones in favor of newer models. Acquiring Palm not only gives it a company with a stronger presence in smartphones but would, for the first time, let HP use a mobile operating system of its own. WebOS may give HP an advantage over competitors using Windows Phone 7 as it would have multi-touch and a larger, more advanced app store sooner than with Microsoft's own schedule.


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By Electronista Staff
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  1. boris_cleto

    Fresh-Faced Recruit

    Joined: Sep 2002

    +8

    Bet it works out

    As well as buying Compaq did for them :P

  1. Steve Wilkinson

    Fresh-Faced Recruit

    Joined: Dec 2001

    +8

    Good for Palm....

    not so good for HP.

  1. ricardogf

    Fresh-Faced Recruit

    Joined: Jan 2003

    +2

    Huh?

    So much for that moron Rubinstein to say that Palm was here for the long haul...good riddance, iPhone killer.

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +3

    I can see a HP Jornada powered by webOS

    making a huge comeback.

    I wish I had bought some Palm shares and made some easy money. Damn. Palm shares jumped up so quickly on this announcement. And I never saw it coming. I wonder if it will tank HP shares. I wouldn't think HP investors would be too happy about the purchase.

  1. brainiac

    Fresh-Faced Recruit

    Joined: Sep 2003

    +5

    Brewsters Millions

    This is just like the film "Brewster's Millions" (at least the first part of the movie). HP likes to strive for mediocrity and then try to make money from volume. Two years ago HP product management said that Windows Mobile provided them with a competitive advantage compared to the iPhone or Android. Now they buy Palm so that they will have a proprietary OS to maintain as they attempt to draw application developers from Windows Phone, Android, Blackberry, iPhoneOS, etc. HP does not know how to make innovative hardware, they do not know how to create the market buzz to make people want a phone (I do not think I have ever seen an iPaq phone commercial) like other companies do (HTC, Apple, Blackberry, etc), and they seem to create a lot of products without building a real ecosystem around them.

    Also, because HP has a culture that really does not support innovation, they need to buy their way into different sectors. A year or so ago they told their employees that innovation through acquisition was over and that innovation would come from within. Innovation, no. Acquiring or reinventing what is already on the market, making it mediocre and low cost, and then selling in volume because of the relatively low price (and low margins), yes.

    This is not the exception to how HP does business, this is the rule.

  1. gmsquires

    Fresh-Faced Recruit

    Joined: Jul 2009

    +8

    Big + for HP

    Yes per the story this is a potential big plus for HP, as they have in the past depended on Windows mobile which has never been that great. I don't know if it would be possible, but depending on WebOS, it may be able to be installed on previous versions of the iPac handhelds. Someone mentioned Journada. That may be but Journada is long gone. Would be nice if it could though, as I have a couple of old Journadas one being the small notebook style one.

    This will save Palm's OS and definitely be a kick in the seat for MS.

  1. c4rlob

    Fresh-Faced Recruit

    Joined: May 2009

    +1

    the Not-so-dull leading the Recently-dull

    HP has a rather dull mobile presence and they choose to drop over a billion on a company that is a fresh arrival to the Kingdom of Dull? This can't be reassuring news for HP stakeholders.

  1. WiseWeasel

    Junior Member

    Joined: Apr 1999

    +7

    Woot

    I knew $4 a share for PALM was too good to pass up. I'll be cashing out rather than counting on HP to actually get much value from this, but I'd love to be proved wrong. We certainly could benefit from the serious competition.

  1. gmsquires

    Fresh-Faced Recruit

    Joined: Jul 2009

    0

    LOL Yeah HP can't inovate

    @ brainiac I think you need a brain transplant or you must have been in some alternate universe for the past couple of decades. True, HP computers and their handhelds have all depended on MS Windows, but to say they didn't innovate is balderdash.

    They did come up with some really nice handheld or mobile computers even if they did depend on MS OS. They also did some nice redesign work on their PC's beyond the usual beige boxes that were present in the 90's. They were most innovative in their printers, scanners etc. The HP Labs have been innovating for decades and I have seen it when I worked for a third party marketing company that did work for HP's retail marketing back in the 90's. Oh, BTW don't forget about their innovative CPU they worked on for servers back in the 80's.

    So I have no diea where you got your information Brainiac

  1. slider

    Mac Elite

    Joined: Oct 1999

    +10

    Wow, Lots of Palm Bashing

    Palm's WebOS isn't a joke - Palm is. And it's inability to gain momentum has more to do with Palm than with the OS. Palm's corporate structure was ancient and couldn't get out of it's own way. The company was already hanging by a thread when WebOS finally came to market and then the hardware had several QC issues, which may have been a result of Palm's financial straits. In fact, if it was not for the WebOS - Palm would have been completely worthless. The other thing that knocked WebOS on its @$$ was the surge of Android phones that came to market shortly after and Palms inability to produce enough of their devices to offer on multiple carriers.

    We don't want to start seeing smartphone/tablet OS's disappearing to the point where we are down to two primary OS like we are with desktops. The iPhoneOS, Mobile 7, Android, Nokia's OS, and others, all of these keep the others from getting lazy and push the limits. Otherwise you end up something like Internet Explorer after they squashed Netscape - fat and lazy - it took several browsers, namely Firefox, to get that fat code off the couch after years of eating bonbons.

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