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HP Buying Struggling Palm For $1.2 Billion; Cites Its OS

Hewlett-Packard is buying mobile-phone maker Palm, which has been in a protracted struggle to compete against devices that have leapfrogged it technologically in recent years, for $1.2 billion, Brandon Bailey and Troy Wolverton report. HP executives plan to use Palm's webOS operating system in everything from tablet computers to new phones.

"Today's announcement is about how HP will provide customers with a great experience as they increasingly live their lives online, for work, entertainment and everything in between," says Todd Bradley, the HP evp in charge of the company's PC division.

Several analysts were baffled by the announcement. Gartner's Ken Dulaney points out that despite high marks from analysts when it was released, the market has voted against webOS. "The question for HP is "why Palm now?" says Stifel Nicolaus analyst Aaron Rakers. For its part, HP says it has a global reach that will, in the words of chief strategy and technology officer Shane Robison, "take these products to places that the Palm guys simply couldn't."

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Palm has been on a "dramatic rollercoaster ride" since its "birth as a gleam in Palm founder Jeff Hawkins' eye in 1982," writes David Lidsky in a Fast Company timeline of the company's high and low points.

Read the whole story at San Jose Mercury News »

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