HP-Palm Merger

Case Code: BSTR383
Case Length: 27 Pages
Period: 2009-2010
Pub Date: 2011
Teaching Note: Not Available

Price: Rs.500
Organization: Hewlett-Packard, Palm, Inc.
Industry: Information Technology, Electronics
Countries: Global; US
Themes: Strategic Options , Mergers and Acquisitions

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

This case is about the acquisition of Sunnyvale based Palm Inc. by the Palo Alto technology giant HP, which was completed in July 2010 amid much debate about the feasibility of the combined entity. It traces Palm's footsteps in the mobile devices and platform industry and describes the circumstances which led to its take-over. It examines in retrospect how Palm, once known for its technological innovations, failed to sustain its acumen and fell back in the race for market share in the growing smartphone segment of the mobile devices industry.

The case also takes a look at HP's position in the mobile phone industry and examines the company's failed attempts at establishing itself among the market leaders.

It studies the motivation behind the merger deal, from both HP's and Palm's perspective. The case also examines the future of the HP-Palm combined entity and its chances at retrieving lost ground and creating a veritable niche in the smartphone and other mobile devices market.

Issues

The case is structured to achieve the following teaching objectives

To examine the conditions under which companies in the mobile devices industry opt for merger deals
To understand the challenges faced in the smartphone industry
To understand the advantages and disadvantages of a merger deal
To study the possible outcomes of a merger with respect to the merging of human and technological resources in the combined entity

Introduction

Background Note

Pre-Merger Challenges

HP Buys Palm

Rationale for the Deal

Market Reactions

Future of HP Palm

Exhibits