HP and Palm have just issued a joint announcement that Palm will be acquired by HP. The cost of the deal is $5.20 per share, or $1.2 billion to purchase all outstanding shares of the company.
Palm will now become HP’s main mobile phone device infrastructure, replacing the aging iPAQ line as their flagship mobile device lineup.
While HP was not rumored in buyout talks, the pairing of Palm and HP has more synergy than other companies, such as Lenovo. Palm and HP are both headquartered in Silicon Valley, and Palm will be able to continue to operate with minimal immediate changes to the company’s strategy or path.
HP will gain webOS and be able to pursue new opportunities that may have been out of Palm’s reach. HP has been dabbling in both tablets (with Microsoft) and smartbooks (using Android). It is possible HP could even leverage webOS as a reliable, consumer-and-touch friendly variant of Linux to extend even to mainstream computing applications.