In what has to be the fasted price drop in the history of smartphone pricing promos, AT&T has officially lowered the price of the 4 day old Palm Pixi Plus to free. As of today, the AT&T web store is displaying a big orange FREE price tag on the pixi+ after the usual contractual discounts and rebate. The deal even comes with free shipping and a choice of blue or black back covers.

The Pixi Plus just went on sale at the carrier this past Sunday for $49. While free offers such as this are somewhat common at third party channels, it is quite unprecedented for such a new smartphone to drop to zero after less than a few days on the market.

Palm has lost yet another key webOS engineer in the aftermath of the HP deal. Rich Dellinger, who had the role of user interface design architect, was apparently the brains behind webOS's highly praised unobtrusive notification system.

Mr. Dellinger is now back at his former employer Apple, where he will take on a similar role as a senior UI designer. His departure comes after two other high profile "webOS architects" departed for other ventures in the valley.

Palm today announced is has agreed to settle a class action lawsuit recently brought over the HP buyout deal. The lawsuit filed shortly after the HP announcement claimed common stock holders were cheated while holders of preferred shares such as Elevation Partners got an unfair benefit from the transaction.

Palm has now entered into a memorandum of understanding in which they agreed on the terms of a settlement of the litigation, which would include the dismissal with prejudice of all claims against all of the defendants. Interested readers can find all the granular details and background info in this SEC filling. The acquisition deal with HP remains unchanged.

AT&T is now selling the Palm Pixi Plus smartphone in retail locations and the web. The Pixi debuts with a $49.95 price tag after the usual 2-year contractual discount and mail in rebate. The AT&T flavored model comes in just a bit higher than the current "free" Sprint Pixi or Verizon's $29.99 Pixi Plus.

The Pixi Plus features a thin design, fixed keyboard and built in WiFi. It comes equipped with a 320 x 400 pixel TFT display, 8 gigabytes of user storage and a 2 MP camera with a flash. AT&T is also tossing a free touchstone charger with any purchase.

HP has released a prepared statement, by way of engadget, on the recent stir over comments made by HP CEO Mark Hurd yesterday. Apparently the reasoning is that smartphones are indeed amongst the range of devices they have in mind for webOS. The prspeak reads:

When we look at the market, we see an array of interconnected devices, including tablets, printers, and of course, smartphones. We believe webOS can become the backbone for many of HP's small form factor devices, and we expect to expand webOS's footprint beyond just the smartphone market, all while leveraging our financial strength, scale, and global reach to grow in smartphones.

Speaking at a bank sponsored technology conference today, Mark Hurd, CEO of HP made some interesting remarks concerning the Palm acquisition. While we only have a small second hand, out of context quote to go on via ZDNet, he reportedly made some curious remarks concerning HP's plans for webOS.

Hurd said that the company isn't going to "spend billions of dollars trying to go into the smartphone business; that doesn't in any way make any sense."

Hurd further goes on to state that HP bought Palm Inc. for its IP (intellectual property). The follow up quote (also posted after the break) further elaborates his reasoning and desire to load up printers and other web-connected devices with a consistent software environment i.e. webOS.

In a final acknowledgement that all things Windows Mobile and Garnet OS from Palm are headed to extinction, Palm's Store is having a blowout clearance sale on peripherals and accessories for their entire range of legacy devices. In short, Palm appears to be blowing out everything related to the Treo Pro, Treo 800w, Centro and all older devices with this sale that ends June 30th. Some deals are definitely more attractive than others, so read on to see what our picks are for the best values in the lot.

One of the highlights from the sale is the Palm Centro Leather Flip Case for $9.99, available in choice of four colors to match all of the Sprint and AT&T Centro offerings. A Palm Spare Battery Charger (including a spare battery!) for $14.99 for the Centro and Treo 800w is also a solid value. A savvy Palm user will know that the Centro/800w battery is also unofficially compatible with the Pre and Pixi so this is quite a good deal indeed.

An enterprising Palm enthusiast has recently acquired a Palm Foleo and has started a blog to chronicle his impressions of the stillborn device. The blog is going by the moniker of IXLE Foleo and the author has begun to post about his thoughts on the device along with a number of screenshots and usage experiences.

Nearly three years ago to this day, the Palm Foleo project was announced with great fanfare, yet was cancelled before its public release. To date public and online appearances of the device have been rare and often shrouded in secrecy. A Foleo unit even surfaced on eBay last week and quickly sold for over $600. Perhaps with a unit in the hands of a more technically inclined and experience Palm OS user, we can expect to see some insight into the Palm mobile companion that never was.

Palm's soon to be new corporate administrators announced today they would be eliminating 9,000 positions over the coming years in a new restructuring effort. HP will be investing in fully automated commercial data centers, operated by its own converged infrastructure software.

The build up of data storage "cloud services" is being billed as a enterprise modernization effort and is aimed at better positioning the unit for growth. $1 billion will be spent on the transformation, which will end 9,000 positions over a multiyear period. According to the company the cuts will come from expected productivity gains as a result of the automation. A majority of the redundancies will be made from the business unit which includes the former Electronic Data Systems (EDS), which HP acquired in 2007.

PIC reader Tolga M. wrote in with this eyewitness report of a Palm marketing effort currently underway this weekend in Times Square, New York City.

Hi there guys, was taking some out-of-town friends around NYC today for some sight-seeing and ran into a large group of people wearing snazzy Palm 'uniforms' in the middle of Times Square. They were giving out Palm branded lip-balm, bags, and other goodies, and demo-ing the Pre Plus to passers by, and had acquired a good-sized crowd. Interestingly they also had 4-5 'Smart' Cars all decked out in Palm wrap-arounds. We were on our way somewhere and I forgot I had my camera so I don't have any shots, but I briefly talked with one of the Palm reps and they seemed very knowledgeable and friendly and said they'd be there for a few days (probably taking advantage of the Memorial Day tourist crowd).

They are giving away 8 Pré's per day via an electronic raffle that they can enter you for (you give them your email). So if you're in NYC this weekend check it out. I think they have a billboard in Times Square too. All in all it seemed like they had someone with half a brain planning the event. Okay, have a great weekend!

Matias Duarte, Palm's VP of Human Interface and User Experience, has left the company according to a digital daily report this morning. Originally hired in Sept '07, Mr. Duarte was one of the leads on the webOS project and was responsible for much of the overall design and user interface. Readers may remember him from the initial unveiling of webOS at CES in Jan 2009.

Reports have now been confirmed that Duarte is taking a new spot at Google, where he will become the new User Experience Director for Android.