HP Offers to Buy Palm

US$1.2 billion is the price. Surprising but not totally. Remember HP’s iPAQ, functional and somewhat popular PDAs, way back when. HP’s Todd Bradley, EVP for HP’s Personal Systems Group and previous Palm CEO: “The attractiveness of the smartphone market is compelling to us.” Jamie Townsend of Townhall Investment Research:

In our view, the recent announced purchase of the company by Hewlett Packard will be completed without any other bidders. We do not believe that Hewlett Packard will be able to either revive Palm’s current poor sales of the Pre and Pixi or, that eventual new handsets incorporating WebOS will represent a meaningful new competitive threat to other handset vendors.

Quite pessimistic. HP has very strong ties with the enterprise and has a huge retail presence globally and especially in the US. I think HP can carve out a small niche in the smartphone market that can capture share in both consumer and enterprise markets. I think both Apple and RIM are probably looking carefully at this development since HP’s enormous resources cannot be ignored.