Rumor has it that HTC has walked away from an opportunity to acquire Palm and that Lenovo has emerged as the front runner to buy the struggling handset maker. Just like IBM’s Thinkpad enabled Lenovo to buy credibility in the U.S. market, Palm may do the same for cellphones.
As we hear that HTC did not find enough synergies to buy Palm (or, as other sources claim, Palm’s books were just too much of a risk for HTC) it seems that a much more financially potent buyer is eyeing Palm. Lenovo, which has grown to become the fourth largest PC maker worldwide, is now apparently weighing its options to expand its cellphone business, which is largely limited to Asia at this time, into a global opportunity.
“A most suitable candidate will be a mainland Chinese company,” said Lu Chialin, an analyst at Macquarie Securities in Taipei. “They’ve got a lot more free cash and don’t have the brand presence in the United States, so that will all give them that boost they need.” Investment banking sources said they had heard that Lenovo is looking into a possible bid for Palm, but did not have any further details.
An interest of Lenovo in Palm could work out very much in the same way as Lenvo’s acquisition of IBM’s Thinkpad PC business. Palm, a pioneer in the handheld segment, has value for Lenovo that goes well beyond the company’s current financials. In fact, Lenovo may be interested in Palm’s brand to get its phones, some of whiche are Android-based – like the O1 – into the lucrative U.S. market.
Jack Gold has offered his view on a possible acquisition of Palm previously here on ConceivablyTech and noted that “if someone did come along and purchase Palm and made the required substantial investment, the most likely competitor to be negatively impacted would be Nokia. With Palm acquired and decent financial and marketing backing, it could impact on Nokia’s smartphone business more than any other company.”
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