In a move that is guaranteed to raise eyebrows, handheld market leader Palm is acquiring Handspring and spinning off its PalmSource subsidiary.
The boards of directors of Palm and Handspring today announced that they each have unanimously approved a definitive agreement for Palm to acquire Handspring. Aiming to combine the market leadership of Palm and the wireless expertise of Handspring, the news is also followed by the final approval of the Palm board to spin-off of its PalmSource subsidiary.
Handheld maker Palm has, following its recent reorganisation, consisted of two businesses - PalmSource, a subsidiary responsible for developing and licensing the Palm operating system, and the Palm Solutions Group, a business unit responsible for designing, making and marketing handheld devices. Immediately following the completion of the spin-off, Handspring will be merged with Palm, and the merged company will be renamed later in the year.
The transaction, encompassing the spin-off of PalmSource and the merger of Handspring with the remaining Palm Solutions Group of Palm, is expected to close in the fall, subject to certain conditions.
The merged company will be led by Todd Bradley, who will continue as president and chief executive officer, and will be structured around two business units: handheld computing solutions, led by Ken Wirt, currently senior vice president, sales and marketing, for Palm Solutions; and smartphone solutions, to be led by Ed Colligan, current president and chief operating officer for Handspring. Jeff Hawkins, Handspring chairman and chief product officer, will become chief technology officer for the merged company.
"Palm and Handspring share a vision that handheld computers and smartphones have the potential to redefine the landscape of personal computing," commented Donna Dubinsky, currently serving as chief executive officer of Handspring.
Palm's acquisition of Handspring is the latest chapter in a now decade-old story revolving around Jeff Hawkins and Donna Dubinsky, whom originally founded Palm in 1992. Palm went on to be acquired by U.S. Robotics in 1995, which in turn was acquired by 3Com in 1997. The following year, Hawkins, Dubinsky and Colligan left Palm to found Handspring, and two years later Palm separated from 3Com.
In 2001, Palm initiated its reorganization and announced its plans to create an OS subsidiary, whilst at the same time acquiring assets and several employees from desktop OS maker Be. In 2002, the completion of its PalmSource OS subsidiary followed, as did the moving of the two now-separate companies to separate campuses.
And finally, more than a decade later, the makers of Palm OS - Jeff Hawkins and Donna Dubinsky - will be back with the company they founded in 1992.
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