Palm Sold to Hewlett-Packard

220px-palm-Treo700pHewlett-Packard (HP) is now expected to re-enter the smartphone arena after it announced that it has a deal to buy struggling Palm Inc. The amount in talks is 1.2 billion dollars.

Palm revolutionized the digital mobile industry when it introduced Palm Pilot in the 1990s. However, competition from rivals Apple, maker of iPhone, Research in Motion Ltd, makers of BlackBerry and the Android phones from Google, has driven the company to declare losses during the last two fiscal years.

Even the release of its well-praised new operating system WebOS didn’t help propel the smartphone maker back into the limelight.

HP is now anticipating new prospects with the planned acquisition. “The smart phone market is large, profitable and rapidly growing,” said Personal Systems Group Vice President Todd Bradley. “HP intends to be a leader in this market.”

He further informed that Palm will become a division of HP. Jon Rubinstein, Chairman and CEO of Palm and a former Apple executive, is expected to remain with the company.

Previous potential buyers include Lenovo from China and HTC from Taiwan.