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HP agrees to buy Palm for $1.2 billion

Written by Andre Yoskowitz (Google+) @ 28 Apr 2010 17:04 User comments (17)

HP agrees to buy Palm for $1.2 billion Giant computer manufacturer HP has agreed to purchase the struggling smartphone maker Palm today for $1.2 billion in cash, including assuming Palm's debt.
Palm put itself up for sale in the last two months after it became clear that the company's phones were not selling and it only had enough cash to last the next 12 months. Palm was entertaining offers from HTC, Lenovo, RIM and others, but HP was never really listed as a likely candidate.

Although Palm has arguably the best smartphone OS available (WebOS), the company has struggled to sell its flagship Pre (Plus) and Pixi (Plus) models, forcing retailers to slash the price to as low as $0 in an effort to get them off shelves.

HP's move can be seen as a way to rival Dell, who has gotten itself back into the smartphone market with the upcoming release of the Thunder, Flash and Lightning phones, all sporting either Windows 7 Phone or Android as their operating system.

"Palms innovative operating system provides an ideal platform to expand HPs mobility strategy and create a unique HP experience spanning multiple mobile connected devices," says Todd Bradley, executive vice president of HPs personal systems group. "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 H-P intends to be a leader in this market."

Palm CEO Jon Rubenstein is expected to stay with the company although it is unclear in what position.

Shares in Palm jumped to $5.90 in after hours trading, despite HP paying only $5.70 a share (a 23 percent premium from the closing price) for the company.

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17 user comments

128.4.2010 17:30

well i dont think theyre going to brand their phones "HP" like dell does with her phones but the logic is pretty simple. you sell pcs and laptops? i sell pcs and laptops. you sell phones? now i sell phones too.

228.4.2010 18:08

HP has been selling phones for a decade or so. Never very successfully though, but yes, they've been in mobile business for quite some time now. Actually the "pre-smart phone" era in '90s was a fight for PDA markets between Compaq, HP and Palm. HP merged with Compaq in 2002 and now bought Palm. Only HP survived, although it now contains all those three brands :-)

328.4.2010 18:46

That's really too bad. -Not a big hp fan thier dv9000's, 2000's and 6000's shit out and they left tons of customers screwed. Of course they blamed nvidia for thier graphics cards, I blame the lack of air flow and faulty design. They have terrible customer service and constant software/driver issues. In my veiw phone manufacturing is just another thing they will screw up!

428.4.2010 20:18

The most exciting thing about this new is IMO the possibility of a WebOS slate. I would buy that in a heartbeat.

528.4.2010 21:11

bought the only hp product i would buy would be an all in one and even then I'm not sure if i would buy

628.4.2010 23:18

Why would you want a webos slate? If WebOS was any good, they would not have trouble giving the phones away!

728.4.2010 23:29

WebOS is a great mobile OS. Pretty much anyone who's used it agrees on that. It's just that the Pre hardware is crap and Palm was totally clueless when it came to marketing.

This message has been edited since its posting. Latest edit was made on 28 Apr 2010 @ 23:30

829.4.2010 18:25

Just another thing that HP can screw up

929.4.2010 21:34

Originally posted by KillerBug:
Why would you want a webos slate? If WebOS was any good, they would not have trouble giving the phones away!
tis one of the best OSs for smartphones int he world right now. the reason somethign as crap as the iphone sells more is beacuse of markting, something palm are just crap at.

1030.4.2010 0:28

Originally posted by Memnock:
WebOS is a great mobile OS. Pretty much anyone who's used it agrees on that. It's just that the Pre hardware is crap and Palm was totally clueless when it came to marketing.
I agree. WebOS is the a great mobile OS. It is said that palm has to sell its company. well maybe they need more startegy in terms of marketing and HP is really good at that.

Nothing beatsTaiyo Yuden CDs

1130.4.2010 0:57

Originally posted by rylai17:
Originally posted by Memnock:
WebOS is a great mobile OS. Pretty much anyone who's used it agrees on that. It's just that the Pre hardware is crap and Palm was totally clueless when it came to marketing.
I agree. WebOS is the a great mobile OS. It is said that palm has to sell its company. well maybe they need more startegy in terms of marketing and HP is really good at that.
Not to mention the GREAT connections it has with retailers.

121.5.2010 2:27

Another merger in progress. The Board of Directors at Palm has sold out the employees. Hp will eliminate duplicate positions, outsource jobs and a few lucky people may be able to continue working for another year before fire you. Each member of the Board of Directors should have enough to retire but will not because they are motivated by greed.

131.5.2010 10:00

$1.2 billion, in cash? I call bull. Sure, Hollywood might depict having that much money in a brief case for a transaction the ultimate bad ass move, but in the professional, real world, it doesn't work that way. It's all formalized on paper and the transaction goes through via a "wire" or business check (usually a giant cardboard check [if the purchase is worth the publicity] which enables a photo op. that way the press has something other than words to print!).

If I was selling my company for that much money, and the buyer came into my office with a briefcase full of bearer bonds worth $1.2 B, I wouldn't think he's a badass- I'd refuse to sell, as he'd clearly be an idiot carrying that around with him.


-adamryan

141.5.2010 10:19

Originally posted by adamryan:
$1.2 billion, in cash? I call bull.
In financial world, buying something "in cash" means that it is paid in money -- wire transaction or whatever -- as opposed to share exchange, where the acquired company gets to own portion of the merged company. And yes, it is commonly used terminology. And no, it doesn't mean a fleet of UPS trucks brining piles of $100 bills to the Palm HQ ;-)


151.5.2010 16:25

Originally posted by thepohl:
That's really too bad. -Not a big hp fan thier dv9000's, 2000's and 6000's shit out and they left tons of customers screwed. Of course they blamed nvidia for thier graphics cards, I blame the lack of air flow and faulty design. They have terrible customer service and constant software/driver issues. In my veiw phone manufacturing is just another thing they will screw up!
This is like BlockBuster's mergers/market attempts and will turn out the same way. HP use to be great with hardware but never good with software. Now they can't do good with either as stated so well above. I have one of the mentioned laptops above as well as other friends of mine and just after the warrranty was up I had three major hardware failures not to mention the software horror stories their HP Advisor and other programs create. Their service is amongst the worst out there and they could careless about their customers. There is nothing I would buy at this point from HP especially their printers!

161.5.2010 23:36

Originally posted by dRD:
Originally posted by adamryan:
$1.2 billion, in cash? I call bull.
In financial world, buying something "in cash" means that it is paid in money -- wire transaction or whatever -- as opposed to share exchange, where the acquired company gets to own portion of the merged company. And yes, it is commonly used terminology. And no, it doesn't mean a fleet of UPS trucks brining piles of $100 bills to the Palm HQ ;-)


yes that's correct. If i were palm and I will be paid in cold cash, seeing in front of my company numbers of trucks fully loaded with money? na-ahh.. I dont think so.. =)

Nothing beatsTaiyo Yuden CDs

172.5.2010 4:45

The annual compensation for a single Hedge Fund Manager has more value than the efforts of 1,250 employees of a 15 year old technology company. What is wrong with this picture?

A 1,000 people will be out of work by May 31, 2010 deal or no deal. The folks at Palm introduced innovations which changed the world in a good way. Thank you for your efforts, each and every employee of Palm.

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