Palm Reported To Be For Sale

Palm Inc, manufacturer of the Palm Pre and Pixi and developers of the webOS smartphone operating system is seeking to be acquired, according to reports published over the weekend. An acquisition of Palm would be the latest twist for a company that was once a division of U.S. Robotics, and later 3Com after it acquired U.S. Robotics. In 2000 3Com spun off Palm so that it again became an independent company. The company as it stood in 2000 lasted two years until it split in two forming, PalmSource, which licensed the PalmOS operating system to hardware companies, and PalmOne, the company that made Palm handhelds and smartphones. In 1998 Jeff Hawkins, Donna Dubinsky, and Ed Colligan, the original founders of Palm, left 3Com to form a competing company called Handspring, which merged into Palm Inc, in 2003. PalmSource eventually became acquired by ACCESS and later PalmOne bought back rights to the PalmOS and renamed itself Palm Inc. to become the company that it is today.

In January, 2009, Palm Inc. announced the new incarnations of their hardware and operating system software, which are the Palm Pre and webOS. Prior to the announcement in 2009 Palm made incremental improvements to their Treo hardware and the PalmOS, and even sold Treos running Windows Mobile, but that did not help it retain the dominance it once held in the handheld and smartphone market. At the time of the 2009 announcement, with Apple’s iPhone taking the smartphone market lead and Google’s Android in the wings, it was widely thought that Palm had to deliver a home run in order to continue to exist.

Despite positive critical acclaim for webOS and Palm Pre, Palm has simply not been able to gain significant marketshare due probably in large part to the success Google and it’s hardware partners have had with Android. While webOS is considered a very worthy competitor to the iPhone OS and Android, Palm has been hampered by imperfect hardware and availability only on Sprint. While the Palm Pre Plus is now available on Verizon, it appears to be a case of too little, too late for the one time king of the smartphone market.

In a market where five other platforms (iPhone, Android, Windows Phone, Blackberry, and Symbian) are competing for customers, it will be interesting to see whether any company will seek to buy Palm for the sake of continuing to sell webOS phones. The most likely reason why a company such as HTC or RIM were to buy Palm is to own the patents Palm owns. If Palm is simply bought for its intellectual capital, it will be a sad ending for one of the pioneers of the handheld and smartphone industry.