Analysts ponder: Will Palm be acquired?

Palm's fortunes have soared since it unveiled its Pre smartphone--the company's stock price has quadrupled since January. It crossed the $15 per share threshold yesterday, which was its highest mark since 2007. All of this has made analysts wonder if Palm will be gobbled up by a well-capitalized tech company.

The speculation that Palm could be acquired, perhaps by Dell, is not new, but it has gained steam in the past few days. Collins Stewart analyst Ashok Kumar told investors in a note Friday that a Dell-Palm deal would "be born of mutual necessity and represent a strategic fit for both parties."

"I think people are connecting the dots, and Wall Street wants to play this game," Matthew Thornton of Avian Securities told MarketWatch. The markets for PCs and mobile devices are blurring with the rise of smartphones, Thorton said, but if PC makers like Dell or Hewlett-Packard want to get into the mobile game in a serious way, they would either have to make their own products or acquire an established player.

"RIM is too big. Apple is too big. Motorola has problems," he said. "When you look at all the assets that are available, what you have left is Palm. So some of the rationale does make sense."

Meanwhile, analysts also are guessing how the Pre is faring in the market. Most analysts have concluded that 50,000 Pre units were shipped on the phone's launch weekend and 50,000 followed thereafter.

"We believe that between 90,000 units and 100,000 units were sold in the first week," Pacific Crest Securities analyst James Faucette told Reuters. "Given the high number of people still on waiting lists ... the company appears to be on track to exceed our previous August quarter unit shipment estimate of 500,000."

For more:
- see this MarketWatch article
- see this Reuters article

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