11
Apr
HTC Palm

Palm Is For Sale

According to Bloomberg, one of the top financial news sources in the world, Palm has hired an investment banking giant Goldman Sachs to arrange a sale of the company, at least according to 3 people familiar with the situation (read: anonymous informants/insiders).

HTC and Lenovo are listed as potential bidders in a bidding that may happen as early as this week. Dell is also mentioned but said to have passed on making an offer.

Palm has been in financial trouble for years after its PDA and smartphone products had been overtaken by competition. The Pre, released on June 6 2009, was touted to be the silver bullet that would pull the company out of bankruptcy. Clearly, it failed to do so as a product and as a platform.

A Look At Palm's History

I think now would be a good time to take a look at Palm's history that led to this day, especially if you haven't been following the events of the past months and years:

  • Palm was founded in 1992 to create a PDA for consumers, called Zoomer.
  • Zoomer failed (this failing thing is turning out to be a trend, isn't it?) but Palm survived by doing a bunch of unrelated and not very interesting stuff
  • In 1995, Palm was acquired by US Robotics which was acquired by 3Com, and then spun out back to independence in 2000 under the NASDAQ ticker symbol PALM. The price, adjusted for all splits between then and now, would have been around $541 a share
  • After 2001, Palm started developing PalmOS and subsequently went through a bunch of reorganizations (look up PalmSource, palmOne, and ACCESS if you want to know the details) which, I have a feeling, didn't help morale and employee turnover, setting Palm up for an eventual failure
  • In 2002, Palm, which has been developing PDA devices exclusively until now has transitioned to the smartphone market with Treo as its flagship product, starting with Treo 180 and really getting the recognition with Treo 700w - the first Windows Mobile Palm product
  • Still having financial difficulties and its stock dropping to its lowest point in years - in the low $1-$2 range, Palm decided to finally scrap PalmOS in 2008 and announced a new direction - WebOS and the Pre
  • Following the announcement, the PALM stock started climbing and hit as high as $16-17 in June-September 2009.
  • Fun fact: in 2009, Palm was listed as having 939 employees
  • Personal fun fact: I own a Palm Pre as well and it's a piece of crap in most aspects
  • Failing to catch up to its competitors - mostly Blackberry, iPhone, and Android devices, largely attributed to poor/weird commercials and failure to spark interest among developers, Palm's stock plunged back to the $3 range by the end of March 2010. Price targets of $0 by some analysts surely didn't help the situation
  • At this point, accounting for all stock splits, Palm's stock has plunged 99.05% from its opening day price back in the year 2000
  • A rumor circulates that Palm might be looking for a buyer soon
  • Around the same time, another rumor, this time of an internal memo announcing an upcoming switch from WebOS to Android ripples through the web, though debunked by Engadget
  • And here we are today

Palm And HTC

Now let's take a look at some HTC/Palm/Android related events and try to add 2 and 2 together:

  • HTC is listed by Bloomberg as the number one potential buyer for Palm
  • HTC was sued by Apple about a month ago for violating 20 patents
  • The suit clearly targeted Android, but Apple decided to sue HTC instead of Google
  • HTC is the world's largest manufacturer of Android phones but doesn't have a big patent portfolio, compared to Apple, which made it an easier target compared to Google
  • Palm, on the other hand, has a patent portfolio that can only be described as ginormous, due to its pioneering achievements back in late 1990s and early 2000s
  • If HTC suddenly got a hold of said patents, they would give them enough leverage to fight Apple, probably even without Google's help
  • If you have doubts about just how important patents are in patent wars, read this insightful and entertaining blog post by Sun's former CEO Jonathan Schwartz entitled Good Artists Copy, Great Artists Steal and aimed directly at Steve Jobs. In the post Jonathan describes how he dealt with Microsoft and Apple when they tried to bully Sun with their patents. It's a great read

There could simply not be a more perfect storm for Palm's acquisition. I am confident they will lead to its sale to HTC.

HTC has been doing remarkably well, in part due to the number of various handsets the company has been pumping out seemingly non-stop in the last year. In addition to all the patent benefits, HTC will gain an experienced team of mobile hardware, software, and UI developers, which will undoubtedly allow for an even faster expansion.

If the acquisition does go through, it is unclear whether HTC will try to merge WebOS with Android, drop it altogether, or keep the 2 operating systems going in parallel. We, as consumers, will probably get the best of both worlds.

What do you, our readers, think will happen? Is there a hole in our analysis? Please share in the comments.

Artem Russakovskii
Artem is a die-hard Android fan, passionate tech blogger, obsessive-compulsive editor, bug hunting programmer, and the founder of Android Police.
Most of the time, you will find Artem either hacking away at code or thinking of the next 15 blog posts.

  • Greg Dorsey

    I didn't think Palm was actually worthy of picking up until I realized how many patents they must indeed have. They're not as worthless as I thought after all (though I maintain the Pre is still pretty rubbish).

    I don't think WebOS will merge with Android - IMO it's more likely it'll be canned.

  • Kane

    I wish HTC rolled the WebOS card system into Android somehow rather than having us use awkward task managers. That is the number one way I think WebOS is better than Android - switching between apps is so painless there.

  • anakin78z

    I would really like to see Palm join the OHA, and become one of the main code contributers to Android. I haven't really seen much of WebOS, but supposedly it has a lot of the polish that people complain is missing from Android. The card system seems to also be a hit.

  • Jeremy P.

    I've been waiting for this news since I first heard about the Apple suit and Palm going under. HTC getting a hold of Palm's IP will shut Apple up. I'm only curious as to why Apple isn't trying to buy up Palm for those patents.

    • http://www.androidpolice.com Artem Russakovskii

      Jeremy, it will be a very cruel joke if Apple steps in with a bid and wins. And by joke I mean disaster.

      Knowing Steve, they might just do that and try to crush HTC with now Palm's patents.

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