HP to buy Palm for $1.2 Billion

Hewlett Packard has officially announced that it will buy Palm Inc. HP will either purchase Palm shares at a price of $5.70 (Rs. 276.30 approx.) per share or enterprise value of $1.2 billion approximately. HP and Palm board of directors have approved this deal and hence, Palm will officially fall under HP's umbrella. Palm had reported poor first quarter earnings despite launching products like Palm Pre, Palm Pixi and brand new WebOS. Hence was looking for potential buyers in market.HP will be buying Palm mostly for the WebOS. HP noted that 'combination of HP's global scale and financial strength with Palm's WebOS platform' to gain aggressive lead in rapidly growing smartphone market. Clearly, HP too wants a piece of smartphone market pie. Both companies will increase in the investment in Research and Development as well as Marketing of WebOS. There's no timeline defined as when exactly WebOS would be deployed on HP products since closing the deal is the first priority. There's no clarity on whether HP would be bringing any more Windows Phone 7 devices or not but WebOS will play an important role in HP's mobile product ecosystem. If the WebOS integration to HP products is fast enough, we may see HP-WebOS phone at Mobile World Congress 2011 next year. There would be several questions that would arise - like will India, amongst other countries, get to see Palm Pre or Palm Pixi. We'll have to wait till the deal closes on July 31.