Thursday, 29 April 2010 12:17

HP to buy Palm for $US1.2 billion


HP, already the world's largest technology company, is set to expand further with the acquisition of Palm.

As previously reported, Palm has been seeking a buyer.

Once a leader in the handheld device stakes - the company's name was once almost synonymous with PDA - Palm didn't sustain the momentum as the market  evolved to smartphones.

Palm's recent lineup includes models based on Windows Mobile in addition to those running its own webOS. Separation of the hardware and OS businesses was tried in the early 2000s, but the two operations returned to common ownership in 2006.

Some models, such as the Pre, have been well received, but Palm never recaptured its early momentum. US figures for the fourth quarter of 2009 show Palm a distant - and slipping - fourth behind RIM (BlackBerry), Apple (iPhone) and Microsoft (Windows Mobile, now Windows Phone), with Google (Android) catching up fast.

Now HP stepped forward with an offer of $US1.2 billion ($US5.70 per share) for Palm, and the deal has been approved by the boards of both companies.

HP is planning a 'unique mobile experience' - see page 2.

"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 of HP's personal systems group.

"And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market," he added.

HP didn't do much with the iPaq range that it inherited from Compaq, and it remains to be seen how the company plans to blend the products, technologies and expertise from Palm with the rest of its portfolio. But Bradley's comments suggest HP is not content with being just another Windows Phone vendor.

"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," said Jon Rubinstein, chairman and chief executive officer, Palm.

Although no announcement has been made about his future role, Rubinstein is expected to remain with the company. He worked for HP early in his career, but is probably best known for his work at Apple in senior executive positions during the period that included the introduction of the iMac and iPod.

After leaving Apple, Rubinstein was hired by Palm to lead its R&D and engineering efforts. Two years later, he became CEO.

The transaction should be completed by the end of July, subject to regulatory and Palm shareholder approvals.



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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.



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