HP to Buy Struggling Palm for $1.2 Billion

Hewlett-Packard plans to buy struggling phone maker Palm for US$1.2 billion.

Hewlett-Packard plans to buy struggling phone maker Palm for US$1.2 billion.

The announcement, which came just after the U.S. stock market closed on Wednesday, follows rumors this week of a number of suitors, including Lenovo and HTC, vying to buy the iconic brand.

Palm last year released a new operating system, WebOS, that now runs on two phone models. But amid tough competition from Apple's iPhone and Google's Android phones, Palm struggled to sell the phones. During its last earnings call, Palm said that it had a large inventory of phones that hadn't yet sold and so future earnings would be lower than expected.

Palm and HP have scheduled a 2 p.m. Pacific Time conference call to further discuss the deal.

(More to follow.)

Copyright © 2010 IDG Communications, Inc.

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