With the launch of Palm's webOS (and two webOS smartphones), this year has been a strong one for the device maker. However the company still hasn't been performing well financially. Palm's webOS platform is innovative, but with more handset makers and carriers gravitating toward Android, we believe Palm will find it increasingly difficult to hold its own in the competitive smartphone market.
But Palm's products are inspiring. The Pre is a solid smartphone, and the Pixi is a quality, lower-price alternative. Palm also is likely to produce more webOS devices in different form factors as the year progresses. All of that makes the company a solid acquisition target for a handset maker looking to strengthen its smartphone portfolio.
One possible suitor is Dell. The computer maker has begun to dip its toe in the smartphone market, but the consensus so far is that Dell's offerings are dull. Buying Palm would be a smart way to breathe life into its strategy. Another possible buyer is industry leader Nokia, which has recently lost its footing in the smartphone game. Buying Palm would help Nokia revive its flagging smartphone fortunes.