During the conference call, two things became very, very clear. First, The central reason HP bought Palm is the webOS - not just the operating system, but the platform around it. Palm is going to "double down" on the webOS. The second thing that became very clear is that HP plans to move the webOS beyond consumer smartphones - especially tablets seem to be the hot thing here. "Between smartphones, slates, and potentially netbooks, there are a lot of opportunities here," HP said.
There's also very good news for Palm and its employees: HP plans to keep most of the existing infrastructure within Palm intact, including the management team. This hopefully means we won't see too many people get fired, while also ensuring that the bright people who developed the webOS and its platform will be the ones to continue its development.
Overall, it seems like this is very, very good news for Palm, its employees, and its customers. As a Palm fan, I'm very excited about this deal.
The press release states the the boards of directors of both companies have approved the transaction. HP will buy Palm for 5.70 USD per common stock, which amounts to an enterprise value of approximately USD 1.2 billion. The deal is expected to finalise July 31, 2010.
"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, "And, Palm possesses significant IP assets and has a highly skilled team. 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."
Of course, Palm CEO Jon Rubinstein had his say as well. He is expected to remain with the company after the acquisition, although it is unknown in what capacity.
"We're thrilled by HP's vote of confidence in Palm's technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP's longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS," Rubinstein said, "We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners."
This is pretty good news, actually. Both Apple and Dell, two major HP competitors, have invested, or are investing heavily in the mobile space; Apple with the iPhone OS, and Dell with Android and Windows Phone 7 devices. The PC market isn't a particularly profitable one (margins are going down), so if HP wants to compete with the rest, it has to have a viable mobile platform as well. The webOS, and hopefully the Palm brand, will allow them to differentiate themselves from other PC companies which will 'just' offer Android phones.
A conference call is planned for 5 PM ET, which is about 25 minutes from now. We'll update this story as soon as more details emerge.