Palm reportedly up for sale

HTC and Lenovo may bid, but there could be others

Palm Inc. is being put up for sale, with Goldman Sachs Group Inc. and Qatalyst Partners helping the Pre smartphone maker find a buyer, according to a report from Bloomberg.

The report says that HTC Corp. of Taiwan and Lenovo Group Ltd. of China have considered buying Palm and may make offers.

Palm has had a roller coaster year financially , even though most analysts think the Palm WebOS is high quality and could be successful for a potential buyer.

"WebOS is a good OS and it could make a strong competitor to Android-based devices..., especially in the home markets of the acquirer," said Jack Gold, an analyst at J. Gold Associates.

While Palm isn't offering anything that HTC doesn't have, Gold said, Lenovo would be able to supplement its existing China-based mobile phone devices with the WebOS. He said China-based ZTE or Huawei could also leverage the Palm brand and technology in China -- and internationally -- and have plenty of cash to do so.

In addition, Access and even Softbank might even decide to acquire the OS and license it, without making any hardware, Gold said. Other possible suitors include companies in India that Gold did not name or Sony Ericsson, which might be interested in selling the WebOS internationally. Until now, WebOS has not been marketed much outside of North America.

According to Bloomberg, the latest spate of rumors helped bolster Palm's stock price by 32% last week, even though prices have dropped more than 60% this year. A steep drop occurred in late February after the company said sales of its new smartphones, the Palm Pre and Palm Pixi, had failed to meet expectations.

Analysts generally feel Palm finds itself up for sale because of poor financial results stemming from strong competition from the iPhone and Android devices; a failure to market Palm devices outside North America; and weak marketing.

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Matt Hamblen

Computerworld (US)
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