The Palm Pre that was once cited as an ‘iPhone killer’ in the smart phone business has been purchased in a recent deal by US computer giant Hewlett-Packard (HP) for $1bn cash. According to HP they wish to use Palm web Operating System as to enhance HP’s capability in fast growing market for smart phones and connected mobile devices. Including Palm’s debt this deal could occur around at $1.2bn.

HP is paying $5.70 for each Palm share, and is optimist that deal would commence by means at the end of July. Yet HP is paying a premium to Palm’s closing share price on Wednesday of $4.63, still it is quite below the company’s 52-week high of $18.09. Previous year Palm launched a properly reviewed touch-screen phone that too failed to reach at appropriate sales figures and target.

Although once a trailblazer in handheld devices, Palm has in recent years struggled to compete in a market dominated by Apple and BlackBerry. According to a statement from HP Palm’s chairman and chief executive, former Apple executive Jon Rubinstein will still work with the company. Donna Dubinsky and Jeff Hawkins founded Palm in 1992, and in 1995 it was purchased by US Robotics, a modem maker that itself was procured by 3Com in 1997. Palm was spun off again as its own company in 2000. It was also rumored that Dell that is HP’s rival was too interested in procuring Palm.

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