HP acquires Palm for $1.2 Billion

By SiliconIndia   |   Thursday, 29 April 2010, 09:17 Hrs   |    2 Comments
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Palo Alto: Ending months of speculation about the fate of the struggling smartphone maker, Hewlett-Packard (HP) announced that it will buy Palm for $1.2 billion. Under the current deal approved by the two companies' boards of directors, HP will pay $5.70 cash per share of Palm, a 23 percent premium to its closing price on Wednesday of $4.63.

With this move HP can intensify the competition in the smartphone market, which it had entered earlier. In 2003 after acquiring Compaq, HP launched its own iPaq line, which runs on Microsoft's Windows mobile platform. However, the device gained little traction in a smartphone market crowded with competitors.

Today, PC makers Dell, Lenovo and Acer are all pushing into smartphones, which offer advanced services such as streaming video, email and GPS in addition traditional voice calls. But experts feel that Palm gives HP a product that stands apart from rivals offering a slew of devices tied to operating systems by Google and Microsoft. "Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said Todd Bradley, Executive Vice President, Personal Systems Group, HP.

With only about six percent share of the smartphone market, HP faces an enormously uphill battle in trying to once again become a major player in mobile. Nonetheless, Palm users and developers can breathe a sigh of relief as the threat of a sudden death to the smartphone maker has been removed by HP.

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