Hewlett-Packard to buy Palm for $1.2 billion

The last two years have not been easy for anyone who is associated with Palm, once considered a leader in handheld devices, thanks to Apple’s iPhone which currently holds the lion’s share of the handheld devices market and Research in Motion’s Blackberry.

To make matters worse, despite the well-reviewed webOS released last year, Google Inc.’s Android software has yet again eclipsed its chances of getting back up on its feet as flagging product sales have only added to the woes of the company known for its pioneering efforts in the area of Smartphones.

With the only option of selling out, it was confirmed that HP and Palm has reached a formal agreement (and signed off by both boards) for the former to acquire the latter at an amount of $ 1.2 billion including debt, which is the current value of Palm based on its latest filings.

Although, this works as a ‘shot in the arm’ for Palm, this gives Hewlett-Packard a chance to make its entry into the smart phones market. Experts say that even with its inexhaustible funding and global reach (unlike Palm’s US-only distribution capability), HP will still not be able to turn things around when it comes to the vice-like grip that both Apple and Research in Motion have on the mobile market but it will definitely cause ripples amongst the likes of Motorola, HTC and most significantly, Nokia.
What remains to be seen is how HP will use the acclaimed webOS not only for its smart phones but also for the HP Slate that intends to give Apple a run for their money.