Hewlett-Packard bails out struggling Palm in $1.2-billion acquisition

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Hewlett-Packard will buy Palm for $1.2 billion, ending a seemingly desperate two-week search for potential buyers for the struggling cellphone maker.

Just over a year ago, Palm announced the Pre, a fresh smart phone that captivated attendees of the Consumer Electronics Show in 2009. Running a new and attractive system called WebOS, some called it ‘an iPhone killer.’

But thanks to an exclusive deal with Sprint, the third-largest U.S. wireless carrier, and a slew of creepy, confusing ads, the Pre and its companion Pixi failed to pick up steam. Palm continued to lose ground to competition from Apple, Research in Motion and newcomer Google’s Android.

A pair of upgraded Palm phones on Verizon Wireless didn’t do much to boost Palm’s presence.

The deal could make sense for HP, which has a pitiful showing of smart phones. (What’s an iPaq, anyway? Did you mean iPad?) Giving Palm a much-needed injection of cash may allow the company to continue developing WebOS.

And speaking of iPad, HP has the Slate tablet computer on the horizon. The Windows-powered device looks lackluster.

A prettier, touch-optimized interface could go a long way toward making the Slate more attractive. And Todd Bradley, HP’s personal systems group vice president, seems to agree, indicating in a statement that WebOS could be a good fit for the product.

-- Mark Milian
twitter.com/markmilian