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More on Palm's Potential Suitors

Tue Apr 27, 2010 - 3:36 PM EDT - By Annie Latham

Palm continued its bumpy ride as stories persisted about potential suitors. Here's a quick roundup of what's being said.

On Friday, at All Things Digital's Digital Daily, John Paczkowski wrote a piece titled "Who Will Buy Palm? If Not HTC, How About HP?" where he gave reasons why acquiring Palm would be a good way for HP to capture a larger portion of the important mobile market. The reasons why included:

> With Palm's assets, HP could target the consumer space as well as the enterprise.

> Palm's webOS is scalable. HP could use it in other devices-tablets, for example-differentiating them from those of competitors using open source operating systems like Android.

> In Palm, HP would gain a turnkey smartphone division

> Palm and HP both call Silicon Valley home, and former Palm exec Todd Bradley currently heads up HP's Personal Systems Group.

> HP has some $14 billion in cash on hand, more than enough to cover Palm's rumored $1.3 billion asking price with plenty left over.

Over at MocoNews, in Tricia Duryee's story on Friday titled "Palm's Back-Up Plan If Its List Of Buy-Out Candidates Shrinks To Zero," she wrote:

"So, if all buy-out candidates fall through, what could Palm do? Palm could extend its distribution, increase revenues and marketing power if it considered licensing webOS to other hardware vendors. The model could be similar to Microsoft's, which lets dozens of handset manufacturers license its Windows Mobile operating system for their hardware. It would also be similar to the Android OS, however, Google does not charge for the software.
To date, Palm has developed both all the hardware and software for its handsets, which is costly and time consuming. Palm's capacity to develop more devices going forward will be seriously constrained by its cash balance. With partners, it could extend the webOS brand to more phones, and even other emerging devices, like tablets or e-readers. In the MarketWatch interview, Rubinstein called the idea 'an interesting concept' and said Palm may be willing to do so, if the 'right strategic partner came along with the right kind of business model.' "

Over the weekend, a New York Daily News story mentioned Lenovo ("Palm's Future is in the Hands of Lenovo"):

"China's Lenovo, the world's No. 4 personal computer brand, has emerged as the leading candidate to buy struggling Palm after the maker of the Pre smart phone was rebuffed by other potential Asian buyers, sources said Friday."

A story by Ryan Kim on the front page of the Sunday San Francisco Chronicle, titled "Palm may be forced out of market it launched," drew parallels between Palm and two Valley computing innovators, Silicon Graphics and Sun Microsystems, that were ultimately overtaken by the market.

"Even if you pioneer a space, you have to fundamentally keep reinventing yourself or you run the risk of being taken over by competitive forces especially if the big guys come into your territory," said Tim Bajarin, president of consultancy at Creative Strategies.

Enter Monday, and Lenovo's name popped up again. This time, in a story appearing at InformationWeek titled "Lenovo Eyes Struggling Palm." In it, Forrester Research analyst, Charles Golvin said, "It will be very difficult for the webOS platform to survive." He also noted, "There it's a much stronger fit for Lenovo to expand beyond PCs and move into smartphones," Golvin said. "They don't really have a great deal of bench strength to target that segment."

Which brings us to Tuesday's Crazy-Ass Rumor Du Jour: RIMM Seriously Mulling Bid For Palm?

You read that correctly. Eric Savitz's story taps one appearing in the Toronto Globe & Mail stating "there's a school of thought" that RIMM (Research in Motion) "must break with its conservative past" and make a $1 billion bid for Palm.

And the beat goes on...

So far this week, PALM continues to trade below $5.


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