HP buying Palm for $1.2b
US computer giant Hewlett-Packard, in a bid to become a player in the fast-growing smartphone market, said Wednesday it was buying struggling US mobile phone maker Palm for 1.2 billion dollars. HP and Palm said Palm stockholders will receive 5.70 dollars in cash for each share of Palm common stock they hold at the closing of the merger, a premium of 23 percent over Palm's closing price on Wednesday in New York. "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," HP executive vice president Todd Bradley said. "The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share," Bradley said in a statement. "Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market," he added. In a conference call with financial analysts, Bradley said the "smartphone market is over 100 billion dollars and growing over 20 percent annually." He said the widely praised Palm webOS mobile operating system would allow HP to expand "our breadth of products" from smartphones to netbooks to "slate," or tablet, computers. Apple released its own tablet computer, the iPad, this month and has reported strong sales of the touchscreen multi-media device. HP currently has a small presence in the mobile phone market with a device called the HP iPaq which runs on Microsoft's Windows Mobile operating system. HP and Palm said that the acquisition has been approved by the boards of directors of both firms and was expected to close during HP's fiscal quarter ending July 31, 2010. They said Palm's current chairman and chief executive Jon Rubinstein is expected to remain with the company. "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners," Rubinstein said. Palm's touchscreen Palm Pre smartphone, powered by the Palm webOS mobile operating system, won "Best in Show" at the annual gadget fair in Las Vegas in January of last year, but posted disappointing sales.
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