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Palm Inc. Establishes Itself as Potential Acquisition Target

6:50 am on March 6, 2007 | Category: Business, Corporate, Mobile Devices, PDAs

Last week’s rumors that Palm Inc. is up for sale were substantiated yesterday by a report in the Wall Street Journal.

Palm has enlisted the help of the investment firm, Morgan Stanley, to evaluate its â€œstrategic options,â€ including the possibility of being acquired by a larger competitor. With a brand name to be envied and over $500 million in cash, there’s little doubt that Palm is a rich acquisition target.

The company’s sudden desire to sell out is believed to be a response to Apple’s forthcoming iPhone device, a potential competitor to Palm. Email-enabled smartphones sold by Research In Motion, Nokia, and Motorola are already putting significant competitive pressure on Palm’s core market.

“As of now, Palm is profitable and I don’t see why it is not a viable company,” commented Needham & Co. analyst, Charlie Wolf, “but would it be better off if owned by a larger company? That’s a tougher one to call. The iPhone is going to be a major competitor to the Treo (especially) when it starts to come down in price.”

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