HP buys Palm, acquires key smartphone technology

HP has announced that it will purchase Palm for about $1.2B in cash, which is about a 30% premium on the company’s market value when it was announced. For Palm, it simply means “survival”, but for HP, this could mean having a shot at controlling its own destiny in a very competitive market. In some sense, this acquisition might provide what Palm has always lacked: cash. The Pre sales have been hampered by a Sprint exclusive that prevented the rapid expansion of the Pre in the market. By the time it reached Europe and Verizon, the customers desire to buy the Pre was gone. The story unfolded like that because Sprint provided a chunk of the funds necessary to design and build the Pre. For HP, getting its hands on Web OS will mean better differentiation than “hardware”. 

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