HP has had its fair share of issues in the mobile market after the introduction of Windows Mobile 7 – and it looks like they decided to take an agressive step forward rather than get out.
The following press release has just popped up on industry sites:
HP and Palm, Inc. (NASDAQ: PALM) today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.
The combination of HP’s global scale and financial strength with Palm’s unparalleled webOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palm’s unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.
“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. “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.”
“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. ”We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners.”
Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm’s stockholders. The transaction is expected to close during HP’s third fiscal quarter ending July 31, 2010.
Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.
As of now, none of this is confirmed. However, this would be a great outcome for all involved – keep in mind that HP was the original innovator behind the success of the PocketPC!
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Actually HP’s Journada running the Microsoft Windoes PocketPC didn’t do too well. It was Compaq’s iPaq that they acquired that was the real success behind the PocketPC.
Hi Baal,
yep, my bad – I clarified it more in the posts on TamsPPC…
Tam
P.S: HP swallowed almost the entire iPaq team…and they did some really crazy things before giving up…
Just home they will maintain the Palm brand, it would be sad if Palm just got absorbed and became another faceless part of HP.
I don’t really see what the Palm brand buys them. Most of the goodwill that the brand carried has eroded away over the last 5 years.
Odds are pretty good it’ll stay Palm. They kept the Voodoo and Compaq names when they bought them. Its to early to say about 3com since they just bought them. I think Palm has a good enough name they should keep it or call it HP/Palm, but not sure if they’d do that.
Baalthazaar WebOS is an awesome OS, plus they get the patents that Palm has. Palm was one of the first to use touch screens and I think they were the first to have a popular touch screen device. RIM may have come out with the Blackberry first but it was only a texting device, Palm came out with the first smart phone. Their name still has some weight. With HP working on the hardware WebOS phones can become a really strong contender.
WebOS has a lot of merits, but doesn’t meet my needs so that is off my radar. My post was about the Palm brand itself. The value of the brand was back when they were a pioneer. The value was all destroyed after they shafted 3rd party developers and certainly the sub par devices over the last 5 years destroyed it further. Then there was the Foleo fiasco, the Cobalt fiasco and the PalmSource spin off fiasco. Keep in mind what made Palm was the “Zen of Palm” experience which was mostly OS based and went with PalmSource.
Hi,
I also guess that it will remain Palm – the HP iPaq name has already faded from most consumers minds.
Tam
P.S. As for webOS: a Pre is on its way. Knock on wood I get it soon, then we know more.
I’m still waiting for you to get your hands on the Aceeca devices.
Baalthazaar you sure are doom and gloom about HP and Palm. Most of the negative things about the Pre was lack of apps, battery life, early build quality and the keyboard. The app situation is still low, battery life is getting a little better, build quality has gotten better and of course the keyboard is the same.
If HP can make a nice looking phones (and tablets) and get more developers to make apps (which I’m hopeful they can) they have a chance.
Sure they bought BeOS and did nothing with it, but that was then. WebOS is one of the nicest mobile OS’ I’ve used, to me its hands down better than iphone OS. If the Pre was the phone most people expected and had a nice amount of apps I have no doubt Palm would have succeeded. You keep looking back at Palms past like they can’t learn from their mistakes. Look at LG, a few years ago LG was Goldstar which made some pretty bad stuff. Then almost over night they became LG and a contender. Palm use to be great and they can become great again.
HP as of the 80′s was mostly known for printers and calculators and then in the 90′s they started making PC’s and then laptops and now they’re one of the biggest PC manufacturers in the world. Don’t underestimate them.
I’m not the only one with the view that Palm has lost it’s brand value.
http://www.tomshardware.com/news/hewlett-packard-palm-pre-phone-webos,10325.html
Hi,
I also think that HP will do something with the IP it has aquired – the main risk I see is whether the old Compaq and the palm folks will get along!
Keep in mind that compaq once wanted to license Palm OS…
Tam
Baalthazaar I guess its a wait and see game to see who’s right. I personally think their is a good chance that HP/Palm will do some great things with the OS.
If you ever listen to Buzz Out Loud on Cnet at the end of every show they read emails that the listeners write. Here is an email that really nicely talks about a few good points about WebOS and I have to agree.
“Hey, Buzz Crew,
Love the show and every night listen to it on my commute home with Dr. Podder, an amazing WebOS podcast streamer and downloader. BOL is one of the defaults, and that’s how I discovered you all.
I believe you may only have a nominal understanding of WebOS. While it is most known for its elegance and its swipe and tap multitasking and notifications, what ultimately strengthens the operating system is its plugin development kit (PDK) and its sophistication in the cloud. While only a couple of thousand of official apps have been released, what is remarkable is which apps have been released. For instance, EA, GluMobile and GameLoft have been able to port their most popular iPhone games such as Need For Speed, Assassin’s Creed, N.O.V.A., and Guitar Hero very easily, because of the PDK, which will be released to the public shortly. GameLoft especially seems to release a phenomenal game or two weekly on WebOS and has publicly commented on how profitable it has been for them. And Palm’s advancements in the cloud have allowed it to make uniform over-the-air updates MONTHLY. Neither iPhone nor Android can claim that. This is why the few million users of Palm are rabid over WebOS, as demonstrated in Laptop Magazine’s March Madness competition. Ultimately, at its core, Palm built an OS that had the capacity to grow quickly, flexibly, and easily, to scale to different devices in different environments, grounded at its core in HTML, CSS, and Javascript to make it easy to develop for by anybody who can build a web page. And they have the patents to defend itself from Apple’s and Microsoft’s legal assaults. HP’s purchase of Palm will ultimately be considered a steal.
Again, love the show, thanks for the daily entertainment.
Best,
Mike”
Hi,
.
I have to admit that that awfully sounds like product placement
Tam
No I don’t work for Cnet, just an interesting thing I heard on their podcast this morning.
Hi Robert,
oh no – please forgive!
I meant that the one who sent the letter was a Palm PP man
Tam