Would Apple buying Palm be fruitful or disaster?

“How good is Palm’s hand? Never better, say some investors, pointing to booming sales of the company’s Treo smartphone and its greatly improved financial condition.,” Rachel Rosmarin reports for Forbes. “Time to fold, say others, arguing that the company ought to get out while the getting is good.”

“But if Palm decides to sell–the company’s shares are trading at around $36, which gives it a $1.8 billion market cap–who’s going to buy? Industry observers say the company’s assets–a loyal following, popular designs and established relationships with mobile carriers–would be enviable additions for a host of companies,” Rosmarin reports. “Apple Computer, for instance, has long been rumored to be cooking up some sort of wireless iPod. The company has filed for several patents for media players, including wireless connectivity, and Apple’s main processor supplier, PortalPlayer, said it would have a wireless chipset available to customers later this year.”

“Apple’s previous attempt at making a wireless iPod, via its partnership with Motorola, is widely seen as a failure. But in that case, Apple didn’t have start-to-finish control of the product. Buying Palm would help it accomplish that, as well as giving it a company that already has an established relationship with carriers like Sprint Nextel. That would be particularly helpful for Apple boss Steve Jobs, who has had a particularly prickly relationship with mobile carriers–last year he referred to the four dominant U.S. carriers as ‘orifices,'” Rosmarin reports. “Then again, argues Creative Strategies President Tim Bajarin, if Jobs is ever going to launch its own wireless device, he will likely insist on something that has been homegrown. ‘Apple’s DNA is such that if they decided to go in this direction, they’d use their own industrial-design wizardry,’ he argues. ‘Besides, Jobs pretty stubbornly doesn’t think smartphones are viable.'”

More potential suitors discussed, including Dell and HP, in the full article here.

“Ken Dulaney, who covers the handheld computing market for industry research firm Gartner, doesn’t see it. What Palm needs to help it survive the coming trends in the smartphone market, Dulaney says, is a partner with expertise in manufacturing handsets and access to low-cost handset parts. And that’s not Apple. An acquisition by Apple ‘would be disaster,’ Dulaney says,” Troy Wolverton reports for TheStreet.com.

Full article here.

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Related articles:
Should Apple buy Palm? – February 06, 2006
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33 Comments

  1. Apple buying Palm would be a complete waste of money. Palm doesn’t even own their OS anymore, so all Apple would get is some rather dull hardware, and a customer base that has been waiting years for Palm OS 6 to ship, which is never going to happen. Apple doesn’t need all that baggage.

    Anyone think Apple couldn’t design a Treo killer if they wanted to? Apple already had the industrial design advantage, better brand recognition, better software talents. What the hell does Apple need Palm for?

    No doubt Apple would be Palm’s (and loyal Palm fans) saviour. They could develop a cool new Palm OS that would be based on Darwin and would use XCode on Mac OS X to develop new Palm apps with. They probably wouldn’t have backwards compatibility, since they wouldn’t have any rights to the old Palm OS code, but that would be OK, because no one would want to run old Palm apps after seeing what new apps designed for Palm OS X would look like. Kind of like how after Mac OS X, nobody wanted to run Mac OS 9 apps anymore if they had a choice.

    Palm had everything to gain from Apple buying them, Apple has very little to gain, so Apple might as well just design the hardware and OS themselves and lure all those starving Palm users over to their iPod branded PDA. I’ve been a Palm user for years (having owned 5-6 different Palms) and still am. The only reason I use a Palm product is because I refuse to use a Windows PocketPC product. If Palm goes away, i’ll just stop using a PDA. I hardly use it now anyway since I have my PowerBook with me every day and when I’m away from it, I have a mobile phone, iPod and web access to my .mac account for Address Book and iCal lookups.

    Palm is on it’s way to becoming just another Windows Mobile brick maker anyway. I say we let it die off, Palm deserves it with all the bone headed mistakes they’ve made over the years.

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