HP buying smartphone maker Palm for $1.2 billion

HP touts Palm WebOS multitasking, mobile app sharing capabilities

HP announced today it will acquire the struggling smartphone maker, as part of HP's Personal Systems Group. The transaction has been approved by the HP and Palm boards of directors.

According to a statement attributed to Todd Bradley, executive vice president, HP's Personal Systems Group, "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. And, Palm possesses significant IP assets and has a highly skilled team."

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On paper at least, if HP can preserve those assets, it could leverage Palm's well-regarded mobile operating system into a viable mobile platform. But that would make HP for the first time a personal systems platform provider, competing directly with Microsoft (Windows Phone 7, due out later this year), Apple (with it spectacular and continuing iPhone OS success), and the growing Android smartphone presence.

Todd was also quoted as saying "The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market."

Today at 5 pm EST HP will hold an investor's conference call to go into details of the purchase. Palm is filing a preliminary proxy statement and other relevant documents with the SEC, which will go into technical details for current Palm investors.

For the last several months, speculation has been swirling that Palm was seeking a buyer. The speculation blossomed after Palm reported much worse than expected quarterly sales of its Palm Pre and Palm Pixi smartphones, based on its innovative webOS software, and executives indicated little chance of a big improvement in the coming quarter. Earlier this month, Palm's software chief quit

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