Palm 'for sale'
Palm, maker of the Pre range of smartphones, is seeking bids for the company, according to reports
Bloomberg reports that Palm is working with Goldman Sachs to find a buyer, according to three sources close to the company. Rival phone makers HTC and Lenovo are reported to have already made offers for Palm, which recently sought to revitalise its fortunes with the launch of the Pre and Pixi range of high-end smartphones based on the WebOS operating system.
But while the handsets have received critical acclaim, sales of the devices have been disappointing, and the value of the company has plunged, with Palm posting 11 straight quarterly losses.
"Palm still has quite a good brand in the US market and some strong technology," Frank He, an analyst with BOC International Holdings told Bloomberg. "You can do something with it. The share have gone down a lot and the company may become attractive to anyone looking for a turnaround play."
Both Palm and Goldman Sachs have declined to comment on the reports.
Palm, which made its name making personal digital assistants in the 1990s, had hoped the launch of the Pre would reinvigorate the company. The device, which used the innovative WebOS operating system to enable users to send emails, surf the internet and use dozens of applications at the same time, was touted as an iPhone killer. But the critical acclaim did not translate in to solid sales, and Palm is currently ranked sixth in the US smartphone market, behind rivals such as Research in Motion, makers of the BlackBerry, and Apple.
Many of Palm's senior executives are former Apple employees. John Rubinstein, the company's CEO, joined the company after helping to develop the iPod range of music players, and was one of the key figures behind WebOS. But despite some of the Pre's cutting-edge features, sales remained slow, as customers gravitated towards Apple's iPhone and devices running Google's Android operating system.
"Palm's limited scale, distribution and weak global brand outside the United States all point to a takeover as the next chapter in the Palm story," said Geoff Blaber, an analyst with CCS Insight. "The company has developed a highly valuable asset in webOS. The challenge for Palm is finding a buyer prepared to pay a premium for an immature platform when many potential suitors have already invested heavily in Android."