Nokia, Motorola named as potential Palm buyers

Analysts remain divided over which companies, if any, may buy troubled smartphone maker Palm--but different handset vendors' names keep getting thrown into the ring.

According to analysts at Morgan Stanley, Nokia and Motorola could be a "strategic fit" to acquire Palm, alongside HTC and Research In Motion. The Morgan Stanley report also named Dell, Lenovo, LG, Microsoft and Samsung as companies that are "possible but likely less interested" in purchasing Palm. Representatives from the companies generally declined to comment on the topic.

The picture is mixed since some vendors have bet heavily on one platform (think Motorola and Android) while others favor their own approaches (think Nokia and Symbian or Samsung and bada)--thus making a purchase of Palm and its webOS platform a clunky fit.

Indeed, some analysts frown on the idea of an acquisition. "What does Palm bring to the table that HTC doesn't have?" asked Jack Gold, an analyst and principal of J. Gold Associates. "Palm has limited channels (carriers), limited international presence outside of North America, a diminishing customer base, and has lost most of its momentum after it launched the webOS and Pre/Pixi with lukewarm support from its carrier partners and a less-than-successful marketing campaign."

Speculation about Palm's fate kicked into overdrive during the past few days following multiple reports indicating Palm tapped Goldman Sachs and another investment bank, Qatalyst Partners, to find a buyer. Palm's webOS devices have struggled to gain traction in the market.

Interestingly, the acquisition speculation has driven up Palm's stock price--it's up nearly 60 percent over the past week. That, in turn, may make any potential acquisition more costly. "If we were to use $6.50 a share, that inherently calls for a take-out value of $1.5 billion," Avian Securities analyst Matthew Thornton told MarketWatch. "When you factor in the convertible preferred shares and options that are in the money, the price goes up fairly considerably."

For more:
- see this Bloomberg article
- see this MarketWatch article
- see this GigaOM post

Related Articles:
Report: Palm searching for a smartphone suitor
Palm CEO admits to hitting 'speed bump' with webOS
Verizon takes axe to Palm device, service pricing
Palm beats revenue expectations but device sell-through slumps

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