HP has agreed to buy Palm, a provider of smartphones powered by webOS mobile operating system, for $1.2 billion, or about $5.70 per share of Palm common stock. The transaction has been approved by the HP and Palm boards of directors.
HP says their global scale combined with Palm’s webOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, smartphone market. Palm’s webOS provides true multitasking and always up-to-date information sharing across applications.
Palm hoped to steal marketshare from Apple and BlackBerry, says the NY Times, but lackluster sales of their Pre and the Pixi phones, contributed to Palm’s putting itself up for sale. Dell, HTC and Lenovo had all been mentioned along with H.P. as suitors.
The $1.4 billion price includes the Series B and Series C shares, most of which are owned by Elevation Partners. Elevation invested about $460 million in Palm and will take out about $485 million.
Palm once held more than 70 percent of the handheld computing market, but several years of disappointing products and strong smartphone competition reduced its market share to single digits. HP plans to jump into the tablet market soon with the Slate, and webOS may help HP compete with the iPad.
AT&T is the only U.S. carrier to offer smart phones with all major operating systems, notes the Dallas News. They include:
- webOS – Palm Pixi Plus and Pre Plus
- Android – Motorola Backflip and Dell Aero
- iPhone OS – iPhone 3G and 3GS
- Windows Mobile – LG eXpo, HTC Pure and others
- BlackBerry – BlackBerry Curve 8900 and others
- Symbian – Nokia Surge
