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.