Speculation has increased recently that Nokia may be looking to acquire Palm to boost its smartphone presence, particularly in the United States. However, analysts are saying that such an acquisition is unlikely to happen for several reasons, including Palm's current market value and Nokia's own smartphone roadmap.
Palm's stock has shot up this year, thanks to the launch of the company's webOS operating system, giving the company a market value of around $2 billion. If Nokia were to try and snap up Palm, it likely would have to pay a premium.
Another reason analysts discount the deal is Palm's close relationship with Sprint Nextel, which has been steadily losing postpaid subscribers. Sprint is, for now, the sole U.S. carrier supporting Palm's webOS smartphones (Verizon Wireless has promised to sell the Pre next year).
"Is a relationship with Sprint worth $2 billion?" Frost & Sullivan analyst James Brehm told Dow Jones Newswires. "If I were in Nokia's position, I would put that money into branding and advertising."
It's worth noting, though, that Palm has relationships with a variety of carriers, and is rolling out the Pre in international markets.
In addition to such factors, analysts also noted Nokia's own smartphone plans. The company heavily supports the Symbian platform, and just released its first Maemo-based phone, the N900. According to a report on The Really Mobile Project blog, Nokia plans to stop using the Symbian platform by 2012 in its entire N-Series line of devices in favor of Maemo. A deal for Palm could unnecessarily complicate those plans, analysts said. Nokia representatives have reiterated the company's support of Symbian.
- see this Dow Jones Newswires article (sub. req.)
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