Bloomberg reports that Palm has put itself up for sale

This article contains unofficial information.
Bloomberg reports that Palm has put itself up for sale
With rumors all over Wall Street during the week about a possible takeover of Palm, Bloomberg is reporting on Monday that the company is putting itself up for sale. Faced with poor sales of the two devices it was counting on to make a miracle comeback, Palm has apparently hired former Superstar Banker Frank Quatrone and Goldman Sachs to explore the sale of the company. Some of the prospective buyers include fellow cell phone manufacturer HTC, based in Taiwan, and Chinese computer maker Lenovo. Elevation Partners owns 30% of the company,an investment that once showed a ten fold profit before roundtripping when the stock went from $4 to $18 and back to $4 before last week's rumor fueled advance..

Palm had seemingly thrown a Hail Mary Touchdown pass early in 2009 when it introduced the Palm Pre and the webOS operating system. Immediately the handset was branded as a strong competitor to the iPhone and the stock took off. At launch, sales failed to hit expectations thanks to a small number of available apps, a strange marketing campaign, a questionable build, and a screen that would now be considered undersized at 3.2 inches. Even when the Pre and the Palm Pixi were made available to Verizon customers as the Pre Plus and Pixi Plus with added memory and other features, sales remained poor. Androidmania had already begun and Big Red was selling tons of its flagship Motorola DROID handset. With a focused ad campaign, plenty of apps to choose from, the DROID became Verizon's first phone worthy of sharing space with the iPhone. While the webOS duo still is expected to be sold through AT&T soon, that move is not seen as one that can save Palm from being sold. As a result of takeover rumors, the stock soared 32% last week after dropping over 60% this year. To highlight the problems Palm faces, the CFO, Doug Jeffries, predicts $150 million in sales for the quarter ending next month. That is half of the $300 million in revenue expected by analysts in a Bloomberg survey.

Palm is currently valued at about $870 million in market value and according to Gartner, is sixth in the North American smartphone market with a 4.3% share compared with leader Research In Motion with a 44% slice of the pie, and a 24% stake owned by Apple. While a buyer might not have any use for Palm's hardware, the webOS software has received mostly rave reviews and could be worth something for a company like HTC that depends on operating systems from Google and Microsoft for its many handset models.

Palm Pre Plus Specifications | Review
Palm Pixi Plus Specifications | Review

source: Bloomberg



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5 Comments

1. DonkeyPunched

Posts: 321; Member since: Jan 10, 2010

:[ I wish they could have done better. I was really interested in Palm and their system... :\

2. Jyakotu

Posts: 867; Member since: Dec 12, 2008

Ditch making hardware and let WebOS be used on other manufactuerer's phones. Sounds like a good strategy to me. webOS is an amazing OS...just Palm making hardware wasn't cutting it.

3. tiolawa

Posts: 115; Member since: Dec 05, 2009

HTC would be a good fit to buy Palm. Ditch the crappy hardware and leave the web OS intact. Or some body suggested the idea of using the web OS and using the concept to create a new skin for android that would give you the apps to compete and a kick ass operating system.

4. allboutverizon

Posts: 66; Member since: May 20, 2009

Did we not see this coming? Don't get me wrong, I like Palm as a company, but I think what hurt them is keeping up with the Market. WebOS was a step in the right direction but they needed that in 2008. In 2009 they were playing catch up to all the other companies. They were very slow to be innovative and application development for WebOS has had a very slow take off, and when users look at the Iphone that has limitless apps, and Android Market . Not to leave out Blackberry App World (which isn't doing all that well either). It was bound to not end good. They waited to long in my opinion to be creative and that seriously hurt them, so I saw this coming. Sad because they were a good company.

5. iHateCrapple

Posts: 734; Member since: Feb 12, 2010

I love Blackberry but App World sucks! And Web OS really isnt that good, yea it's neat lookin and has a nice "feel to it" but every Pre or Pixi Plus sold in my stores comes back...

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