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Thursday, July 15, 2010, 12:55 pm PT (03:55 pm ET)

Apple attempted to purchase Palm, was outbid by HP - report

Apple reportedly sought to purchase its smartphone rival Palm earlier this year, but was outbid by PC maker HP, which paid $1.2 billion for the struggling company.

Dan Frommer at Silicon Alley Insider on Thursday reported that Apple was in the race to buy Palm, along with Google and Research in Motion. That information comes from an anonymous source familiar with the negotiations.

"Apple was mostly interested in Palm's huge library of intellectual property and patents (450+ patents on file, another 400+ applications on file)," the report said. "And unlike some other bidders, Apple even seemed committed to funding Palm's operations, perhaps to challenge RIM's dominance in the keyboarded segment of the smartphone industry, our source says."

Frommer also said that Google was interested in Palm's intellectual property too, but was allegedly more interested in the company because it "thought Apple might want it. But Google supposedly didn't know Apple was bidding for Palm, so it didn't proceed."

But HP ended up sealing the deal, and now owns Palm's creations, including its much-touted webOS mobile operating system. The company plans to use webOS on future tablet devices that it hopes will compete with Apple's own iPad, also based on an operating system originally created for a smartphone.

Palm and Apple have one significant connection in Jon Rubinstein, who helped to invent the iPod for Apple. He is credited with discovering the 1.8-inch hard drive within Toshiba's labs, and placing it inside Apple's iconic portable music player. Rubinstein later retired from the company, where he was was last the vice president of the iPod division, in 2005.

Two years later, Rubinstein joined Palm, and just last year, with when its Pre smartphone went on sale, he was named the new chief executive of the company.