H-P Completes Palm Purchase

PALO ALTO, Calif. ( TheStreet) -- Hewlett-Packard ( HPQ) has completed its $1.2 billion Palm acquisition and is taking aim at Apple ( AAPL) and Research In Motion ( RIMM) in the booming smartphone and tablet markets.

The deal sent shockwaves through the tech sector when it was announced earlier this year, marking a change in direction for computer and server giant H-P.

In addition to new phone hardware, H-P is also getting its hands on Palm's highly-regarded WebOS. With multitasking capabilities, WebOS is a viable alternative to Apple's iPhone OS and Google's ( GOOG) Android software and is seen as the jewel in Palm's crown.

H-P CEO Mark Hurd has already nixed suggestions that the deal is all about smartphones, explaining that the phone maker's IP will boost H-P's mobile device strategy.

"With webOS, HP will deliver its customers a unique and compelling experience across smartphones and other mobility products," said Todd Bradley, executive vice president of H-P's personal systems group, in a statement released on Thursday. "This allows us the opportunity to fully engage in growing our smartphone family offering and the footprint of webOS."

Jon Rubinstein, the former Palm CEO, will now head up a Palm business unit within H-P, reporting to Bradley. Palm will be responsible for webOS software development and webOS based hardware products, according to H-P.

H-P shares dipped 42 cents, or 0.97%, to $42.86 on Thursday, mirroring the broader retreat in tech stocks that saw the Nasdaq fall 1.30%.

-- Reported by James Rogers in New York

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