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Thursday, April 29, 2010

HP Agrees to Buy Palm

Interesting news, HP, the computer maker, has apparently decided to break into the smartphone business by agreeing to purchase the not-ready-for-prime-time Palm device maker...the pioneer who lost its way.

Palm has agreed to be bought out by Hewlett-Packard Co. for about $1.4 billion in cash. The move means that HP doesn't have to spend the R&D dollars to create a smartphone from scratch and it helps rescue an operating system and concept that has received good reviews but hasn't caught the attention of the public. As an article from the Huffington Post, called HP To Buy Palm For $1.2 Billion describes:

Palm got itself into position for a turnaround last June, when it released a sleek touch-screen smart phone called the Pre and fresh operating software for it that won good reviews. But consumers were slow to embrace the Pre and its newer, smaller sibling, the Pixi. In the most recent quarter, Palm sold just 408,000 phones. In its last quarter Apple sold 8.75 million iPhones.

And its current quarter is looking bleaker: On Wednesday, Palm lowered its forecast for the three-month period that ends in May, predicting in a regulatory filing that it will report $90 million to $100 million in revenue due to sluggish phone sales. It previously predicted less than $150 million in revenue.

However, the reason HP has purchased Palm seems to be for the WebOS Palm developed to help run smartphones like the Pre. As OSNews reports:

During the conference call, two things became very, very clear. First, The central reason HP bought Palm is the webOS - not just the operating system, but the platform around it. Palm is going to "double down" on the webOS. The second thing that became very clear is that HP plans to move the webOS beyond consumer smartphones - especially tablets seem to be the hot thing here. "Between smartphones, slates, and potentially netbooks, there are a lot of opportunities here," HP said.

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