HP Buys Palm for $1.2 Billion

HP is apparently the winner of the Palm derby, paying $1.2 billion for the venerable smartphone maker. According to the press release:

HP and Palm, Inc. 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.

Those paragraphs pretty much say it all. It's a good outcome because HP needs to have a mobile strategy and it gives Palm and the WebOS a way to continue. Chief HP rival Dell is very clear on the critical role of mobile and portable Internet devices in its future and is rolling out numerous Android and WinMo handsets later this year. 

Lenovo was also taking a look at Palm and will itself be moving more aggressively into mobile. 

Given HP's fiancial clout and resources WebOS could emerge as a reasonably strong competitor -- perhaps most directly to RIM -- in the coming months and years, especially with new form factors. And that probably includes a WebOS-based tablet. (The HP Slate, Windows 7 device, will flop in my opinion as a weaker version of a netbook or laptop.)

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Related: Some people don't like it and thinks it makes no sense. Business Insider calls WebOS "a failed platform" that the public has rejected. I don't agree entirely. I think the form factor of the Pre/Pixi and certain aspects of the UX are not well done. However the software itself I think is relatively strong and could find new life in new devices.