hp palm

HP to buy struggling smartphone maker Palm for $1.2 billion 

Hewlett-Packard announced Wednesday that it will buy struggling mobile-phone maker Palm for $1.2 billion in a deal that could make HP a new force in the red-hot smartphone market, already heavily contested by Apple, Google and other companies. 

The sale would spell the demise of Palm as an independent company, after an extended struggle to recapture its early glory as a pioneering Silicon Valley developer of handheld devices and smartphones. And it left some analysts scratching their heads over the question of why HP, known more for its PCs, printers and commercial data-center products, would want to enter the crowded mobile-phone business.

But HP executives said they plan to use Palm's webOS operating system for a host

host of mobile gadgets — including tablet computers and netbooks, in addition to phones — at a time when people are increasingly using those devices to access the Internet wherever they happen to be, rather than being chained to their home or office and using a desktop PC. "Today's announcement is about how HP will provide customers with a great experience as they increasingly live their lives online, for work, entertainment and everything in between," said Todd Bradley, the HP executive vice president in charge of the company's PC division.
Still, some experts questioned whether buying Palm was a smart move.
"It's got me kind of baffled," said Ken Dulaney, a tech analyst at the Gartner research firm.Despite an initial positive response to Palm's webOS when it was released a year ago, Dulaney said it has been eclipsed by software from other companies. In addition, he said, "the market has voted" against Palm, as consumers have favored Apple's iPhone, Research In Motion's BlackBerry phones and devices running on operating systems from Microsoft, Google and other companies.HP, however, could be a stronger competitor with those companies.
Bradley said HP — already the world's biggest technology company as measured by annual sales of $114.6 billion — plans to invest heavily in developing and promoting new mobile devices for both consumer and business markets. Palm has about 900 employees; HP executives would not discuss specifics but suggested they are not planning major cuts in the operation.
While looking for ways to increase sales of Palm's existing phones, Bradley said HP may also use Palm's operating system in new tablet devices, similar to Apple's recently released iPad. He said HP sees a big opportunity to market those devices both for consumers and for specialized commercial sectors, such as education and health care.
That strategy makes sense, according to Avi Greengart at the Current Analysis tech research firm. While HP is the world's biggest seller of PCs, Greengart said, "the growth potential for computing is all in the mobile space."
But other analysts noted that Apple, RIM and other companies have already staked out dominant positions in the mobile-phone market, while HP has until now been content to remain a very minor player, selling a little-known line of phones targeted for business users.
With that history, HP will have a lot of catching up to do, in terms of developing new hardware and negotiating agreements with telephone carriers, said IDC tech analyst Will Stofega.
The question for HP is "why Palm now?" added Aaron Rakers, a tech analyst with the Stifel Nicolaus investment firm, who noted