OFF TOPIC: Palm to Buy Handspring in Stock Swap
Palm on Wednesday said it would buy Handspring Inc. in a deal that unites the pioneers of the handheld computing industry in a bid to survive the sector’s protracted downturn. Palm’s board also approved the spin-off of its PalmSource unit, which makes the operating software for Palm’s handhelds. Following the spin-off of PalmSource, Handspring shareholders will receive 0.09 of a Palm share for each share of Handspring common stock.The deal comes against the backdrop of dwindling demand for handheld devices. Both companies posted losses in their last financial quarters are projecting mounting losses in the current quarter.Global shipments of handheld devices fell 21 percent in the first quarter, according to research firm International Data Corp., reflecting the decline in technology spending by corporations.Like prodigal sons coming back to the flock, the deal brings Palm’s inventors back into the fold. Donna Dubinsky and Jeff Hawkins founded Palm Inc. in 1992. In 1997, the two left the company to form Handspring, making units that competed head to head with Palm. At that time, Palm was owned by network gear maker 3Com Corp., but was eventually spun off as an independent company in 2000.