HP snatches Palm for $1.2b

Nicole McCormick
29 Apr 2010

IT giant Hewlett-Packard has emerged as the surprise buyer of Palm, agreeing to pay $1.2 billion in cash for the unprofitable handset firm.

HP will pay $5.70 for each Palm share, a 23% premium to Tuesday’s closing price.

But the WSJnotes the deal is “relatively inexpensive” for HP, in light of the fact that Palm’s share price has tumbled 53% in the past 12 months.

HP bought out Palm primarily for its well-liked WebOS, Shane Robison, chief strategy and technology officer at HP, toldFT.com.

HP has a tiny presence in the smartphone market, selling only Windows OS-enabled iPaq devices.

FT.com cites HP executives as hinting that the firm will incorporate the OS into further larger tablets to rival Apple’s iPad.

"[The deal] puts HP back in the game, but [Palm] is still wrought with problems," Maribel Lopez, an analyst at Lopez Research, told WSJ.

The deal will “probably anger” Microsoft, HP’s long-term partner in the PC business, Gartner analyst Ken Dulaney told FT.

Palm said on Wednesday it expected fourth quarter revenues to be in the region of $90-$100 million, down from earlier expectations of less than $150 million.

According to research firm IDC, Palm's smartphone market share for its Pre and Pixi devices declined to just 1.5% last year compared with 3.5% in 2005.

Other vendors HTC and Lenovo had also been rumoured to be in the running for Palm.

Earlier this month, HP completed its acquisition of 3Com for $2.7 billion in cash.

Related content

No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.