The blogosphere have a reiteration of speculation that has been happening for years that someone (insert favorite supplier here) is going to buy Palm. This time the rumor is about Motorola following on from its Symbol acquisition to purchase Palm. Whilst this could be highly desirable for Palm’s shareholders, one does have to look at the motivations of the potential buyers (usually Motorola or Apple are cited):
- Product design: both Motorola and Apple have enough smarts in this area, as has Nokia, RIM and Sony Ericsson. In addition, players like HTC mean that companies can now buy in ‘iconic’ design a la T-Mobile. In addition Palm is said to be relying heavily on a Chinese design company for its new cheap Treo, not exactly what you’d expect from a company with a strong product design team
- The brand: the Palm brand lives on though it was built on machines made six plus years ago based on a software platform and user experience that Palm has since read the last rights to as it continues its Windows migration. The Treo brand is a valuable competitor brand to RIM, and may be attractive to aggresive entrants into the US marketplace like Nokia, Samsung, LG or one of the many hungry Chinese(both Taiwan and communist China) players Ningbo Bird, BenQ, Lenovo or Acer
- Software: Palm has burnt the biggest asset the UI with its sale to Access, however the company does have useful experience for a Chinese buyer in localisation for carriers and a shiny new Dublin centre for European market entry. For Motorola a purchase of Access the current owner of PalmSource would be more likely as this would fit in with the company’s ambitions to grow market share in Asia and be a progressive move for its existing Linux phone offering in China
- Distribution and carrier relationships: Handspring invested a lot of time building carrier relationships in the face of strong competition from traditional handset manufacturers. These relationships would be invaluable for a new entrant player. In addition, Palm used to have a wide (though sometimes ineffective) retail reach for its devices. Six years ago, Palm products were the number one selling item in Dixons (DSG) stores airside at British airports and on Virgin Atlantic flights
If you want to know who is most likely to buy Palm, look East.
UPDATE (26/9/2006)I have just read the transcript from Palm’s latest financial analyst briefing and it didn’t fill me with confidence. From what I could see, Access are disengaging from the OS business, Palm moving rapidly to becoming a Windows only shop with little differentiation. The company is milking loyal Palm customers as a cash-cow but not offering them much in return. This is like Apple circa 1997, but without the happy ending.