It has been announced that HP just finalized a deal to purchase Palm for $1.2 billion dollars. And it’s exactly what Palm needed. There has been speculation for the past few weeks that various big names were looking to step in, and save Palm. Some of those big names included HTC and there were rumors of Google making a go at it. But in the end HP stepped to the plate and is taking over the struggling Palm Inc. The multi-billion dollar deal which came over the wire late this afternoon, will officially close during HP’s third fiscal quarter.
The deal basically breaks down to $5.70 per share of Palm common stock purchased by HP. At the height of the Palm Pre release, which was about October of 2009, Palm’s stock was worth about $17.46 per share; by January of this year, that was down to $13.41. Since then Palm has not been able to regain momentum. It was thought that the release of the Pre and its revamped operating system WebOS, Palm would again stake its claim as one of the top mobile phone manufacturers, but a poor advertising campaign and even worse sales, quickly sunk the company.
HP’s decision to buy the struggling Palm, is a big sign that they want to take a chuck out of the mobile computing industry. HP hopes Palm’s webOS operating system, which runs the Pre and the Pixi, will help it participate more aggressively in the fast-growing market for Internet-connected mobile devices. There are already rumors that HP will make a webOS powered tablet. Along with webOS, HP also takes control of various Palm patents. While on the other hand, Palm now has some major marketing muscle and huge global user base.
Amidst all the rumors, Palm CEO Jon Rubinstein, will be staying with the company. That was made clear in the official press release.
What does this giant acquisition mean for the average consumer? Well nothing right away. We wont be seeing a boost in sales of Palm phones anytime soon, but what it does mean is that in the future we will see an amazing lineup of some interesting devices. There are already rumors of a webOS powered tablet floating around the blogosphere. Will we actually see one? Only time will tell.
[via Press Release]