With today unfolding yet another chapter in the ongoing, soap opera-like saga of Palm’s fate, it appears that Lenovo, the world 4th largest PC manufacturer, has emerged as the front runner to purchase the struggling mobile company and its failing brand.
While this revelation may offer a glimmer of hope to all those who thought it was too early for Palm to fade from view, don’t get too excited yet; for it seems Lenovo, like Homer Simpson in his journey through the NASA space program, may be leading this race only by default.
But even with Lenovo in the driver’s seat, there are continued whispers that a more established company may yet swoop in to best the Chinese PC manufacturer in this fight for Palm.
Recent reports have indicated that HTC, previously the most likely candidate to scoop up Palm, has backed out of the running, apparently coming to the realization that Palm is actually a big step backwards for the Taiwan-based mobile manufacturer. With every other competitor in this ill-fated race dropping out completely, Lenovo remains the only one standing.
For many, the reason that Lenovo may be the ideal fit for Palm is that Lenovo is a company with enough free cash to purchase the Palm brand, and a company that has eyes for making a dent in the American mobile market, something that Palm could provide.
While even the speculation of Lenovo’s bid for Palm has seen the Chinese PC manufacturer’s shares rise a dramatic 5.9 percent on Friday, is purchasing Palm a good move for Lenovo? There are good reasons to think it’s not.
If Lenovo’s intent is to purchase a ready-made mobile brand with a previously establish share of the American mobile market, it seems impossible for Palm to deliver that. Withsuch a small piece of the pie in the American market, a slice that’s growing smaller every day, the Chinese tech giant would find that it would have very little to work with at the outset, as rebuilding Palm would probably take almost as much effort for Lenovo as creating its own brand would.
The only way it would make sense for anyone to purchase the struggling mobile company would be if the price for Palm was incredibly low, but with Palm’s estimated value in the area of 1.3 billion, that’s a hefty price to pay for a company that’s quickly becoming obsolete.
I wouldn’t be surprised, however, if while the world follows this Lenovo story, we witness another, stronger company swooping in to purchase Palm, one like Nokia perhaps. Not only does Nokia have significantly more cash-on-hand than Lenovo, but Nokia is one of the only established brands that would clearly benefit from purchasing Palm.
As noted in a report on the mobile site TechCrunch, with Nokia’s stock price taking a dip over the past few months, there are several good reasons to think the Finnish-based company should grab Palm now. 1) Nokia clearly has the ability to purchase Palm; 2) there are clear incentives to purchase Palm’s patent portfolio (can anyone say ammunition in their patent litigation war with Apple?); 3) a strong business motive to acquire Palm.
While it still remains to be seen who will scoop up the dying Palm brand, I wouldn’t give the struggling mobile company to Lenovo just yet.
Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).
Written by: Matt Klassen. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >
