HP's Palm Plans May Leave Microsoft

At the Consumer Electronics Show in Las Vegas on Jan. 6, Microsoft Chief Executive Steve Ballmer brandished a prototype Windows tablet computer made by the company's largest hardware partner, Hewlett-Packard. The device, among a group of "slate PCs" Ballmer showed, would be "almost as portable as a phone" and "as powerful as a PC," he said.

HP has said it wants to make Palm's WebOS, which has been praised for its intuitive user interface and ability to run several applications simultaneously, the basis for a new generation of smartphones and tablet computers that would compete with Apple's (AAPL) iPhone and iPad, as well as smartphones from Research In Motion (RIMM) and Nokia (NOK).

HP's acquisition of Palm is the latest speed bump in the complicated relationship between Microsoft, the No. 1 PC software maker, and HP, the world's largest computer maker. HP has developed its own user interface technology for desktops and laptops that run Windows, in a bid to make computers easier for consumers to navigate. Now it's poised to pursue its own direction in the smartphone and tablet markets at a time when Microsoft is trying to gain share in the growing categories.