Apple Tried To Buy Palm Before HP Won The Bidding War — And RIM Completely Blew The Deal
And RIM Completely Blew The Deal — The race to buy Palm earlier this year was fast and hot, with the company's bankers contacting 16 companies about the deal, including five serious potential suitors. — HP won the bake-off, acquiring Palm for $1.2 billion in late April.
Context & Ripple Effects
Palm has been shopping itself for years: back in June 2007 it sold a 25% stake and overhauled its board (a restructuring that put the company explicitly in play), after a deal was reportedly in the final stretch earlier that year. What changed by spring 2010 is that the process became a full auction — bankers contacted 16 companies, five of them serious suitors.
First-order effects
- HP closed at $1.2 billion in late April, taking control of Palm's webOS software and smartphone assets outright.
- RIM, confirmed as one of the serious suitors, walks away with no modern touch-OS acquisition just as its own platform faces iPhone pressure.
Second-order effects
- With Apple and Google building their own operating systems, HP is now the only major PC maker holding an independent mobile OS — raising the stakes for Dell, Acer, and others who must license or partner instead.
- RIM's blown deal leaves it choosing between an expensive internal OS rebuild or licensing someone else's platform, either path costing more than the $1.2 billion HP paid.
Third-order effects
- If the pattern holds, standalone mobile operating systems stop being viable businesses on their own and become assets consolidated by hardware companies with distribution — shrinking the field to a handful of platform owners.
- Auction dynamics like this one — wide banker outreach, fast bidding — are becoming the template for how distressed handset makers exit, which shapes valuations for any remaining independents.
The trend: Mobile operating systems are consolidating from many independent platforms into a few owned by large hardware companies, with HP's Palm purchase as the clearest data point yet.