New York, June 05: Palm Inc. on Wednesday said it would buy Handspring, uniting the pioneers of the handheld computer industry in a bid to survive the sector's protracted downturn. Palm's board also approved the spin-off of its PalmSource unit, which makes the operating software for Palm's handhelds. Following the spin-off, Palm will swap 0.09 share of its common stock for each Handspring share.

The deal comes against the backdrop of dwindling demand for handheld devices. Both companies posted losses in the latest quarter and are projecting mounting losses in the current quarter.
Global shipments of handheld devices fell 21 per cent in the first quarter, according to research firm International Data Corp., reflecting the decline in technology spending by corporations.
Alex Slawsby, an analyst for market research firm IDC, said of the Palm-Handspring deal, "It's something that has been rumoured. It's one of the hottest things to speculate on and it has been that way for years now. Bureau Report