HP Will Acquire Palm for $1.2 Billion

Palm-HP Palm Inc. may live after all. Hewlett-Packard has announced that it has finalized agreements to buy Palm for $1.2 billion. This ends weeks of speculation about Palm’s future. In spite of Palm CEO Jon Rubinstein’s assurances that Palm would be fine on its own, most pundits believed that an acquisition was the only way Palm could survive. Everyone from Lenovo to HTC had been rumored to be interested in Palm, which has seen its value dwindle rapidly over the past few months.

Besides providing HP a foothold in the profitable smartphone segment, this acquisition will also allow HP to gain access to Palm’s impressive patent portfolio. However, the biggest gain for HP is undoubtedly the webOS, which powers Palm Pixi and Palm Pre.

According to Brian Humphries, HP’s Senior Vice President of Strategy and Corporate Development, webOS is the best-in-class mobile operating system. Our intent is to double down on webOS. When asked to expand on his comment, Humphries added, “We think it’s one of the best operating systems out there today. We see nothing in development in the next 3 to 5 years that comes close. We want to take HP’s financial strength and use it to take webOS to the next level.

WebOS is indeed an excellent platform that was let down by less than adequate hardware. Until now, its future was clouded by uncertainty. However, HP’s backing not only guarantees a second-generation webOS but also increases the possibility of accelerated development. We could also see webOS being used in a wider array of products including tablet PCs and netbooks.

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