Could Palm end up in RIM’s hands?

Palm may end up for sale after its Pre phone flopped

Canadian Press

Around this time last year Palm was rolling out its new Pre smartphone—a glossy black orb that was supposed to resurrect the handheld computer pioneer from the dead. But while the Pre and its innovative touchscreen operating system won over tech followers, including some who suggested it was superior to the iPhone, it failed to catch on with consumers. Palm was about two years too late to the market with the Pre (the iPhone came out in 2007). It didn’t help that the Pre’s surreal TV ad campaign brought to mind powerful antidepressants, not a sleek mobile device.

As a result, it is increasingly looking like Palm will end up on the sales block. Executives are reportedly shopping the company around for US$1.1 billion, and interested buyers are said to range from laptop makers like Lenovo to European cellphone giant Nokia. But maybe the best match, say some observers, would be Research In Motion, the Waterloo, Ont.-based company that makes the popular BlackBerry. “It makes lots of sense,” says Ken Dulaney, an analyst at Gartner Research. “I have been a big fan of this connection for years. RIM has not come up with a compelling touch user interface and Palm has that.”

While RIM continues to do well with its keyboard models, particularly among corporate types, its efforts to appeal to the growing consumer market for touchscreens has been markedly less successful. RIM’s Storm model debuted in 2008 and was immediately derided as clunky—the result of trying to shoehorn a keyboard-oriented operating system into a touchscreen. Palm’s Web OS would fill that gap nicely.

The problem, according to Dulaney, is the price that Palm shareholders are demanding, and RIM’s stubborn pride. “I am afraid that they believe they can fix what they have and are so proud of their assets that buying Palm would seem to them like a failure. But in reality it would be a great move.”