HP To Buy Palm, Inc. For $1.2 Billion

Computer giant Hewlett-Packard said today it plans to acquire smartphone manufacturer Palm, Inc. in a cash deal worth $1.2 billion, as HP looks to strengthen its foothold in the growing mobile market, including smartphone games. In recent weeks, speculation about a Palm acquisition had mounted, with the company lowering its earnings projections in the face of increasing competition from mobile competitors like Apple, Google, and BlackBerry. Palm was an early leading figure in the mobile device market, dominating the now effectively-extinct personal digital assistant segment before smartphones rapidly took over. In the past year, the company has gained notice for its new technology, including its webOS operating system, which it showcased for game development at this year's Game Developers Conference in March. "Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices," said HP personal systems group EVP Todd Bradley in a statement. "And, Palm possesses significant IP assets and has a highly skilled team," he added. "The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share." HP has its own line of iPaq mobile devices -- formerly Palm competitors -- which it inherited in 2002 through its acquisition of Compaq. In a short blog post on Palm's official site, online communications director Jon Zilber wrote, "Can you say 'webOS acceleration'? We're pretty excited, and pleased we surprised the world again."