
If you know me you’ll know I’m a pretty huge fan of mobile devices. There has been some developments over the last 48 Hours that could alter the landscape of the existing Smartphone Market.
Bloomberg have stated that Palm have instructed Goldman Sachs to try and find a buyer for the company.
Palm currently have the Palm Pre for sale in the UK on O2 and Palm Pre and Palm Pixi for sale on Sprint in the USA. These exclusivity deals have backfired on Palm and they have not shipped as many units as they had hoped. Due to this there is a lack of interest by developers of applications on the handset. Lack of applications then in turn affects sales. It’s a catch 22 situation.
WebOS (the operating system Palm phones now run on) is a fantastic operating system. Innovative and forward thinking. The problem Palm have had is in the quality of the hardware the operating system runs on. I have held the Palm Pre myself and I just wasn’t impressed. The phone felt very plasticky and build quality was questionable. I have read reports of people being on their fifth handset but are still adamant fans of the Palm platform.
So why could all of this change the Smartphone Market?
Well, it all depends on who buys Palm. There are a wide range of reasons why different companies would want to buy Palm.
The first would be for a computing company to enter the Smartphone Market.
Lenovo, Dell and HP are all rumoured to be interested in purchasing Palm to enter the market. Why is this important? Well Palm with a new cash injection working with companies experienced in supplying quality hardware could be an exciting mix! WebOS with hardware that doesn’t fall apart after 3 months sounds good to anyone entering a 24 month contract. Obviously the merger between Palm and a PC/Laptop manufacturer could take time for the new owners to get used to the different operating model of selling Smartphones. If this takes too long then Palm would be left behind Android, iPhone and Windows Phone 7.
The second option would be for an existing phone manufacturer to purchase.
HTC and RIM (Blackberry) are touted as the most likely contenders to purchase Palm. I personally feel HTC would be the best company to buy Palm, I believe this due to HTC having experience in building quality and innovative hardware would be a potent mix with WebOS. Currently HTC build phones running operating software by Google and Microsoft. Having their own mobile operating system would give them much more flexibility with their own platform. There is also another reason HTC could want to purchase Palm. Currently HTC are facing various lawsuits from Apple due to patent infringements. Palm have a fairly sizable file of Patents which would help HTC in fending off Apple.
The third option, and the most scary, would be Palm to be bought out by Apple.
Apple, being very cash rich at the moment could easily purchase Palm without it affecting their balance sheets. If Apple did buy Palm it would be a very sad day indeed. I believe Apple would buy Palm purely for the Patents and would use them to suppress competition. As history has shown a lack of competition brings about a lack of innovation. As only the patents are needed Apple would shut down Palm.
I hope I have made it clear why the possible sale of Palm could change the landscape of the current Smartphone Market, who would you like to purchase Palm? Leave your ideas in the comments below.