Is Palm for Sale?

Is Palm  shopping for a new owner?

Analysts have been speculating about whether Dell   or Hewlett-Packard  might be willing to buy the software company to help their own smart phone strategies.

Gartner analyst Todd Kort also dismissed reports that Motorola or Nokia may buy the smaller Palm. It would be more of a benefit to Dell or HP getting into the smart phone market, he told That possibility gained more buzz recently when Taiwan’s DigiTimes, quoted unnamed sources, said Dell was ready to compete with Palm, RIM  and HP in the smart phone sector.

Palm spokeswoman Marlene Somsak refused to comment on the reports, saying “we are focusing on growing the company.” Dell and HP were not immediately available for comment. Motorola refused comment.

Last month, Dell hired former Motorola  executive Ron Garriques to head the computer company’s new Global Consumer unit.

HP appeared to support the theory when it introduced its iPAQ 500 Voice Messenger, the company’s first foray into the smart phone area.

Although Palm is just a “bit player in the overall phone business,” the company developed one of the best personal information managers for phones, said Avi Greengart, a Current Analysis analyst who covers wireless technology.

But the results haven’t been as strong in Palm’s bottom line. In November, for example, Palm revised earnings expectations to between $390 million to $395 million, down from the $430 million it had expected, as a result of shipping delays in its Treo 750 smartphone.

Following a 2003 decision to split Palm into two separate companies, one devoted to software and one to hardware, Access Systems in 2005 paid $324 million to acquire PalmSource, the unit that developed the Palm OS. The same year, PalmOne, the second Palm spin-off company, renamed itself Palm Inc. It later paid $44 million to Japan’s Access Systems for a perpetual license of the operating system used by Treo smartphones and PDAs. The agreement ensures current and future Palm devices remain compatible with Palm’s Garnet operating system.

Whatever the outcome of its talks with investment firms, analysts said Palm needs to find partners to work with as part of its long-term strategy. “If they try to continue to go it alone, the financial health of the company is likely to fade considerably,” said Gartner’s Kort.

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