Palm putting itself up for sale
Palm is putting itself on the block and starting its search for bidders as early as this week, according to Bloomberg.
Who is on the short list of potential buyers? It’s not Google, but close enough: HTC. That makes sense because buying Palm could save HTC in Apple’s patent infringement lawsuit. How? HTC may find in Palm the patent portfolio and thus the leverage it would need to settle the suit.
Bloomberg said that Lenovo may want to buy Palm too. However, the most interesting bidder by far is HTC.
Apart from Apple and Google, Palm–which currently has a $870.8 million market value–is the only company with a modern smartphone operating system in the market. Palm has a long history in the PDA and smartphone worlds. Its original Palm Pilot–its low-cost Newton wannabe–was a total success back in the 1990s, and its Treo smartphones were probably the first nice PDA/phone hybrids. As a result of this long story, Palm owns patents that may become very effective weapons against both Apple's omnipotent iPhone and its lawsuit.
Apple and Palm have threatened to sue each other in the past. Palm CEO Jon Rubinstein, who was at Apple during the development of the iPhone, came to Palm to create a theoretical iPhone killer and save the company from irrelevance. He built a nice phone, but his marketing strategy failed miserably. During this time, however, Apple never sued Palm, presumably because Palm has enough patents to sue Apple back and make the legal battle pointless.
Although Palm has plenty of good intellectual property and a great smartphone operating system, its Pre and Pixi phones have been a sales failure. Knowing this, would the Palm Pre and the WebOS survive the sale? Or better said: Can anyone turn WebOS into a real contender in the current smartphone war? Between Google and Apple battling head to head–and Microsoft soon to join the war with Windows Phone Series 7–my gut feeling is that no, WebOS will not survive.
It seems like the only thing that makes sense is buying Palm to use its patents against Apple lawsuits and to improve future phones. That’s exactly what HTC needs. And maybe Google would like to help a bit here, just to avoid having to indemnify HTC in case Apple destroys it to bits.
