Analyst: Nokia should buy Palm

New Arrivals Catalog Cover“Over the past few years, Nokia’s dominance of the smartphone market has been steadily eroded by competition from the likes of Apple and Research In Motion. In its latest quarter, the company’s smartphone market share slipped to 35 percent from 41 percent,” John Paczkowski reports for AllThingsD.

“The company desperately needs a worthy super-smartphone contender (it’s clearly not the N900 or N97) or it will end up reducing forecasts for market share and profitability in perpetuity,” Paczkowski reports. “So what should Nokia do? Wedge Partners analyst Brian Blair has a suggestion.”

Paczkowski reports, “Nokia should buy Palm–for its webOS operating system and for the guy who quarterbacked its development, CEO Jon Rubinstein. And then the company should abandon its Symbian and Maemo operating systems–Blair dismisses them as ‘inferior’ and ‘lacking polish and smoothness’–and build just a handful of smartphones, all based on Palm’s webOS.”

MacDailyNews Take: Somewhere Palm-backer Roger McNamee is drooling with anticipation. Our take from January 21, 2009: “Palm’s Pre dog and pony show is nothing more than takeover bait. They simply do not have the resources necessary to create another mobile platform, especially one that is superfluous. If Palm’s Pre is not a ruse, then those responsible are kidding themselves.”

Paczkowski continues, “‘You need each other,’ Blair explains in an open letter to Nokia’s leadership. ‘You have the manufacturing and distribution capabilities and global carrier relationships and Palm has the second best operating system behind the iPhone. Alone, it will be difficult for Palm to ramp globally and compete with the top players largely because it takes meaningful marketing dollars to ramp units across global carriers especially while you remain focused on R&D efforts. You, by yourself, will cede market share to your competitors each quarter as smartphones become a larger part of global handset sales and you fail to offer a compelling offering in that category.’ Continuing his evaluation, Blair says, ‘I know you said you expect flat market share in 2010 but that isn’t going to happen if you don’t act. I think you could lose 10% of your share by the end of 2010 to your competition, taking your global share under 30%.'”

Full article here.

MacDailyNews Take: We don’t know if Blair owns Palm shares or not, but it was the very first thing that popped into our minds when reading this – especially since the Palm Pre and WebOS, despite metric tons of hype, have utterly failed to set the world on fire. If Nokia ever decides to eschew their own dog food, they’d do better to use Google’s free Android OS than waste their money on the mess that is beleaguered Palm.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. These anal-ists never seem to be working for the right people. Nokia and Apple needs to hire these guys the anal-ists seem to know exactly how to spend their monies.

    just my $0.02

  2. I like it; Nokia buys Palm, Microsoft buys RIM, and Dell buys Motorola. While they try to integrate their purchases Apple will continue to leap frog the handset industry and begin eying other industries.

  3. Android is not without it’s problems. Multi screen sizes and resolutions. Multi hardware configurations. Multi OS customizations. 10,000 Apps in the Google App store that may or may not work on your Android OSed phone.

    Then there is Google’s looming OS monetization in the form of unwanted ads infesting every corner of the phone screen. Google has to be paid for it’s OS somehow.

    Google’s Android has just killed Windows Mobile. That is all they have accomplished so far. There is still an evil corporation behind the only OS for manufacturers who don’t write their own OS.

    Nokia, if you can roll your own OS, do it.

  4. Years after iPhone launch, the fools are still tripping over each other, still nowhere near a coherent platform. Still no clue. Still the same ol’ directors, same ol ‘designers’, same ol marketing bodies….

    Why doesn anyone still have any respect for any of these monkeys with suits on?

  5. Nokia would be smarter if they just kept developing Maemo Linux. They might need to hire some better UI people, but having their own OS that they control is a far better strategy. All they need to do is put the proper software development effort into it. They already have tremendous relationships built with the carriers. They ought to be using the Linux community, too. They could really make an impact with the right push behind Linux with a variety of devices.

  6. No, Nokia shouldn’t by Palm. That’s just stupid. There’s nothing wrong with the OSes Nokia’s developed in-house, except that they suuuck, and it’s not like buying Palm helps.

    Nokia’s “focus on non-smartphones”, which I’ll generously dub the “Third World Strategy”, isn’t going to work either. Probably time to do a shut-the-company-down-and-give-the-money-back-to-the-shareholders.

  7. Everyone’s got an answer to Nokia’s problem.

    Like so many captain’s of industry, all they’ve done in the last decade was take profits without investing. Nowhere is this more evident than with the Telcos and phone manufacturers.

    Steve Jobs came out swinging and on his first try, derailed their gravy train. Can you say Razor? Phhfft!

    Suddenly, they look to their research and development for answers but they jumped ship years ago and all you hear are crickets.

    cheep. cheep. cheap.

    Those who are desperately trying to make up for lost time have only shallow cosmetic changes to cover up the same tired technology.

    Jobs was right, these people are five years behind the power curve, and that’s a lo-o-ong time in tech years.

  8. Right. and Nokia should also buy GM, and a few banks, and the Republik of California, and any other insolvent institution that they can get their hands on. That would bolster their market share for another quarter, right?

  9. “The company desperately needs a worthy super-smartphone contender (it’s clearly not the N900 or N97)

    With such interest-piqueing names as “N900” and “N97”, it’s clear Nokia hasn’t learned one damn thing about marketing to consumers.


  10. “If Nokia ever decides to eschew their own dog food, they’d do better to use Google’s free Android OS than waste their money on the mess that is beleaguered Palm.”

    Absolutely not. The market rulers are going to be those that are completely and thoroughly vertically integrated. Android is going to spawn a bevy of Windows-like box assemblers. The only thing they will have to differentiate themselves will be price, and that’s a losers game.

    The webOS isn’t OSX, but then it hasn’t had the time to mature that OSX has had. That said its an order of magnitude ahead of Android and RIMM both.

    Nokia with webOS would be a worthy competitor to the iPhone, especially considering that they would get the Palm development team with it.

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