Palm deal will overhaul HP's tablet OS strategy
Hewlett-Packard's purchase of Palm could redefine the PC maker's mobile OS strategy, potentially impacting the company's reliance on Microsoft operating systems.
Hewlett-Packard's purchase of Palm could redefine the PC maker's mobile OS strategy, potentially impacting the company's reliance on Microsoft operating systems.
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What are the financial basics of this deal?
Hewlett-Packard has announced it plans to buy struggling phone maker Palm for US$1.2 billion (NZ$1.67 billion).
The announcement, which came just after the US stock market closed on Wednesday, follows recent rumours of a number of suitors, including Lenovo and HTC, vying to buy the iconic brand.
Palm last year released a new operating system, WebOS, that now runs on two phone models. But amid tough competition from Apple's iPhone and Google's Android phones, Palm struggled to sell the phones. During its last earnings call, Palm said that it had a large inventory of phones that hadn't yet sold and so future earnings would be lower than expected.
"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," said Todd Bradley, executive vice president of HP's Personal Systems Group, in a statement. He added that HP intends to use the Palm technology in an effort to become a leader in the mobile device business.
Palm chairman and CEO Jon Rubinstein called the deal a "vote of confidence in Palm's technological leadership".
HP said that Rubinstein is expected to remain with the combined company.
The deal is expected to close by July 31.
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