After weeks of speculation, Palm has confirmed that it is being taken over by HP in a $1.5bn (£985m) deal. What now for the future of the company that basically invented the handheld computing market in the 1990s?
There is no doubt that Palm was ripe for the picking. The initial enthusiasm for the Pre smartphone wasn't matched by strong consumer demand, launched as it was in the teeth of major pushes by Apple and Google.
The Pixi line was not a huge success either, and Palm has been trying to recover ever since. The company lowered revenue expectations for its third quarter, and posted disappointing financial results.
However, HP was not thought to be among the companies likely to make a move, having made little headway in the mobile computing sphere.
HP marketed a line of PDAs at the launch of Microsoft's first Windows CE operating system, but they were unpopular and, while it has kept up links with Microsoft, the world's biggest PC manufacturer is not a force in handheld computing or smartphones.
So why did HP splash out $1.5bn on Palm? Analysts priced the firm at $1.2bn to $1.3bn (£787m to £853m) and, while numerous companies were mentioned as potential bidders, no-one seemed prepared to buy.
Palm chief executive Jon Rubinstein announced less than a week ago that Palm could survive perfectly well as an independent company, suggesting that he was not prepared to negotiate.
As to what HP is getting out of the deal, the answer is software. Palm has a well-deserved reputation for building hardware people want to use, with designs as good as anything the competition can produce. But HP knows how to do hardware, and it's the webOS operating system that the company wants to control.
HP has always been a Windows customer and says it still will be, but what HP seems to want is the same as Apple: a complete operating system that can be locked around a device.
The smartphone market is growing faster than ever, long-term rival Dell is getting into the market, and HP has obviously decided to jump in too.
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