PDA merger

Palm Inc., the market leader of personal digital assistants (PDAs) plans to acquire Handspring, a company which was founded by former Palm executives 5 years ago. The Wall Street Journal values the deal at about $170 million, based on Tuesday’s closing stock price of $12.15 a share.The combined company will be renamed when the merger is completed, sometime this fall. Palm’s OS business will be spun off as a separate entity.

The PDA industry is struggling — 1st quarter shipments declined 21% versus the same period last year (source: IDC).

However, one bright spot is Palm’s new PDA, the Zire71. Slim design, clear color screen, built-in digital camera and MP3 and video capability.

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