Breaking news, fresh off of the wire: HP just finalized agreements to buy Palm for $1.2 billion dollars.
HP’s $1.2 billion dollar purchase breaks down to roughly $5.70 per share of common stock. While this is spot on with the $1.2-$1.3 billion pricetag Palm was rumored to be shopping around as of late, it’s still a mammoth difference from what Palm was trading at just months ago. In October 2009, Palm was worth about $17.46 per share; by January of this year, that was down to $13.41. It has, unfortunately, been a downward spiral ever since.
And for all you webOS fans out there: Don’t worry — it doesn’t look like the platform is going anywhere just yet. It appears that the companies plan to continue the development of webOS, leveraging HP to “rapidly accelerate the growth” of the platform.
HP has seemingly been lightening their efforts in the pocketable mobile space lately — but with the iPAQ line and countless Pocket PC handsets behind them, they’re by no means strangers to it.
However, the smartphone space might not be HP’s only interest here – given HP’s recent desire to take on Apple in the tablet space (with the HP Slate) and that Windows-powered tablets just don’t seem to sell, might we see a webOS-powered tablet sometime in the future? Paired with the proper hardware, webOS could easily make for an absolutely incredible tablet experience.
Even if HP abandoned webOS altogether (which, again, doesn’t appear to be the plan right now), they just bought them selves a monstrous card to play: Palm’s patent catalog. It’s a porcupine tactic: It’s hard to make a big dent in the smartphone biz when every company around can throw patent infringement suits at you — but when you’ve got hundreds upon hundreds of patents (or quills) in your armory, people are going to be a whole lot more careful about stepping on you.
Contrary to previous whispers, it appears that CEO Jon Rubinstein will be staying with the company. To quote the release, “Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.”
Seems a lot of money to pay for a has-been brand with no decent products.
To be fair, Web OS is good software. They’ve just been putting it on pretty bad hardware so far. It’s all from former Apple devs that Palm’s been poaching recently, so the software is going to be good, of course.
Yeah, but why go with WebOS 3% market share and have to advertise the hell out of it, rather than continue to piggyback on “free” Android and WP7 marketing?
Gee, maybe because then you’re just one of many offering the same product.
WebOS is nice, they are just failing on the device side of things. HP is an interesting fit.
Patents, HP’s modern business is based on their huge IP portfolio.
I agree. I think the patents are key. I remember everyone going on about Apple suing Palm before Web OS came out but analysts often pointed to how many patents Apple was most likely infringing on that Palmed owned.
I think this gives HP the protection they want/need to move into the smartphone market. . . then again who know what they will do.
Will you Apple folks give it a rest with your naysaying crap. You all know webOS is a great platform but you can’t even admit it to yourselves.
WebOS may be cool, but $1.2 billion seems like a lot of money for a failing gadget maker.
$1.2 billion was a little steep. It was a premium of a little over $1/share on today’s closing price.
However, there’s a very good chance we will now see WebOS extended to other platforms (HP netbooks, tablet, etc).
And there’s no denying that Palm started bringing in some pretty good talent over the last year.
Besides, WebOS is actually some nice work.
Great news. I don’t even own a Palm anymore (strictly iPhone 3Gs now) but I’m happy that the Palm tradition will live on…at least for awhile longer. The question is: Can HP’s marketing might globally make room for a 4th major OS in the competitive marketplace? And what will they do about being enticing enough for the telcos to get behind the Pre, Pixi, etc. Hopefully, they will have a brand new piece of hardware by the time this deal closes.
I think there are 5 major OSes owned by these corp….
- Apple
- Google
- Microsoft
- Nokia
- Palm/HP
Ummm, RIM?
As in any OS war the winner is going to be the one where most developers gyrate to. In the end its going to be a three way race between Apple, Google and MS. RIM, Palm and Nokia don’t stand a chance.
Ridiculous. Yeah, and in 1997 Apple was dead. Blah blah blah. One good phone with decent marketing and it all could change.
Rubinstein recently said that they’re restlessly working on some new webOS devices. With HP (being the giant company that it is) behind, these new devices actually do have a chance of success.
They probably aren’t buying the brand as much as they are buying the technology and talent.
SO Finally it has got sold.
It’s great the Palm is in safe Palms of HP now.
After the acquisition was announced, Palm then cut guidance in half. Interesting. I’m sure HP was made aware of this beforehand, though.
HP is retarded. The spiraling downfall of HP begins. 1.2 billion is way overrated.
Then again, HP’s net income in 2009 was about $9 billion, so it’s not like it’s such a big financial effort.
On a not so serious note – I think HP agreed to buy Palm just because their HQs are so close to each other.
Yeah, carving out a slice of the smartphone and tablet market with a unique OS is insane.
I mean, it’s only the fastest growing sector.
1.2 billion seems like a lot but HP have been looking for a way into the phone market and this seems like a good one. Suprised HP wasn’t one of the names being thrown around as a potential buyer more before this.
That is a lot of money for basically a few phones and a phone OS. I mena what else does Palm do? PDA’s have been dead for some time. I think with the iPhone 4Gen coming out and Blackberry doing a refresh of its software. If anything HP should have bought Palm for a song.
overrated? omg, Palm was worth BILLIONS more just some month ago, actually in oct 2009 they where worth like 3x as much.
Its a strong brand name with a good OS, HP got a good deal imo.
I own a Palm Pre and I love it. However, the prices it was trading at were significantly overvalued with a lot of expectations priced in on Pre sales. The reason it dropped so hard is because those expectations never came to fruition.
It was public that Palm was shopping itself. Palm closed today at a market cap of about $780 million.
That’s a rather large premium, if you ask me. Especially for a company that isn’t turning a profit and just lowered their guidance after the acquisition announcement.
I agree. Palm has good software, just need some innovative hardware and HP is very good in this space.
HP now has in its arsenal, its own eco-system /platform equivalent to apple/android. Hope HP makes some truly revolutionary mobile computing devices that can compete with i-Pad mania…. The best of it is it doesn’t have to depend upon Android.
For all those saying that HP paid too much consider that Palm start the whole idea of a PDA and made it popular. (I’m sure some will argue the Newton but it didn’t catch on). Palm has a lot of nice IP and I’m sure patents that would be a nice add to HP’s portfolio.
So I don’t think they spent too much, maybe just the right amount. I see this could pay off in the long run.
I think this could be good or bad. I would love to use a HP slate device running webOS.
But, it could also be bad … because honestly HP has been ruining the voodoo brand name. Hopefully, they don’t do the same with Palm.
The patents alone are worth a billion given what the mobile space is worth today and will be worth tomorrow.
Hard to put a price on being able to (more than) defend your ground against Apple, Microsoft, Google, RIMM and Nokia given they’re all more than happy to sling lawsuits.
USD$1.2 billion is a very high price tag to pay for Palm!
could have bought a killer android or killer iphone LBS app. One ultimate utility app for everything will be a game changer for mobile. not a cluster of disconbobulated patents.
HP move surprised me hopefully in a good way, I never saw a Palm by any service provider available then Germany only WTF.
Palm FAILED big time I’ll take this vid as an comedy relief example. http://www.youtube.com/watch?v=MNh39h02zYI&feature=fvw. Yah I know.
Anyway HP should take control at management and drive this thing world wide and a give it a little bit off pizzaz. Leave the development area intact please their good guy’s we need them.
I think HP sees a way to protect themselves and move into the smartphone market in a big way. They may be following some of Apple’s recent moves, realizing that the mobile arena is the major area for growth and they may just see Palm’s portfolio as the protection they need.
This is great news indeed! webOS has potential, and is one of the few mobile OS/hardware combo’s that is both elegant and powerful (like the iPhone which iLove).
This should also help HP compete against the iPad, as loading Windows 7 was not a bright idea IMHO.
It will be hard to manage Redmond’s affialiation with Pocket PC product and Palm WebOS Products
Long live WebOS!! I’m sure picking up Palm’s huge patent portfolio was a huge factor in their decision. But I hope that WebOS doesn’t become a sidenote to all this. If they just slap WebOS on better hardware (incl tablets) and promote it the same way they promote their other stuff (with celebs), then we could see a serious momentum shift.
I’m thinking 1st & 2nd qtr of 2011 is when we should see some new products. Let’s do this!!
I put HP on my list of companies that would be good to buy Palm. Even though the CEO from HP said the company doesn’t really want to get into the phone business, I knew that could just be misdirection. With so many other tech companies getting on the phone bandwagon I knew HP couldn’t keep away from it.
HP might be a good fit with Palm. HP has been doing really well in the PC/laptop business, making some of the best products. If they can put the same quality into phones and tablets with WebOS then they may have a win on their hands.
Only time will tell what will happen though. I’m hopeful that things will work out well and WebOS will become a top contender.
I really like WebOS on my first release Palm Pre. It is a very good OS, but it has lived on very fragile hardware since it’s inception.
Hopefully with HP now owning the OS we will see it on better, less delicate hardware in the future.
I have seen this news fly all over…the news..
Come just make the deal this may the last change for both of you share the cake..
Interesting post. It sounds like a risky bet for HP due to the recent lackluster performance of Palm products. At the same time, the patent portfolio under Palm’s belt holds strong potential presuming they develop products to fit changing consumer behaviors. All too often, these companies focus on fancy new products and technologies and neglect to consider consumer needs and behaviors.
great news…
Heres to HP outdoing Apple without becoming evil like Apple.