As we reported earlier, Palm CEO Jon Rubinstein has said that the company has a plan to become profitable once again, and that he would like Palm to continue to work alone. But while the executive has made it clear that he does not want Palm to be acquired, some other firms have been sniffing around. One of them, Taiwan based HTC, took a look and has decided to pass. The fifth largest global cellphone manufacturer did have some private talks with the webOS developer and decided that an acquisition of Palm would not be right for them. A source close to the situation told Reuters, “There just weren’t enough synergies to take the deal forward.” Another company mentioned as a possible suitor, China’s Huawei, also decided to pass over Palm. According to Investment Bankers, this leaves the world’s fourth largest PC maker, Lenovo, as a potential bidder. The company at the end of last year had $2.9 billion in its coffers, enough to finance a buy out of Palm, which could run in the range of $1.5-$3.0 billion. One banker wondered what exactly a winning bidder would be buying. “What are you buying – a good operating system?” he said. “It’s a wounded brand.” In the quarter that ended February 26th, Palm sold only 408,000 units of its webOS devices, less than the 600,000 estimated by analysts. Lenovo had a cellphone unit which it sold to concentrate on computers, then bought it back last year. It has produced a model for the Chinese market but needs a product for the U.S. market which is the world’s largest based on the number of users. Lenovo is no stranger to big deals, having purchased IBM’s PC business 5 years ago.
source: Reuters

With rumors all over Wall Street during the week about a possible takeover of Palm, Bloomberg is reporting on Monday that the company is putting itself up for sale. Faced with poor sales of the two devices it was counting on to make a miracle comeback, Palm has apparently hired former Superstar Banker Frank Quatrone and Goldman Sachs to explore the sale of the company. Some of the prospective buyers include fellow cell phone manufacturer HTC, based in Taiwan, and Chinese computer maker Lenovo. Elevation Partners owns 30% of the company,an investment that once showed a ten fold profit before roundtripping when the stock went from $4 to $18 and back to $4 before last week’s rumor fueled advance..

Palm had seemingly thrown a Hail Mary Touchdown pass early in 2009 when it introduced the Palm Pre and the webOS operating system. Immediately the handset was branded as a strong competitor to the iPhone and the stock took off. At launch, sales failed to hit expectations thanks to a small number of available apps, a strange marketing campaign, a questionable build, and a screen that would now be considered undersized at 3.2 inches. Even when the Pre and the Palm Pixi were made available to Verizon customers as the Pre Plus and Pixi Plus with added memory and other features, sales remained poor. Androidmania had already begun and Big Red was selling tons of its flagship Motorola DROID handset. With a focused ad campaign, plenty of apps to choose from, the DROID became Verizon’s first phone worthy of sharing space with the iPhone. While the webOS duo still is expected to be sold through AT&T soon, that move is not seen as one that can save Palm from being sold. As a result of takeover rumors, the stock soared 32% last week after dropping over 60% this year. To highlight the problems Palm faces, the CFO, Doug Jeffries, predicts $150 million in sales for the quarter ending next month. That is half of the $300 million in revenue expected by analysts in a Bloomberg survey.

Palm is currently valued at about $870 million in market value and according to Gartner, is sixth in the North American smartphone market with a 4.3% share compared with leader Research In Motion with a 44% slice of the pie, and a 24% stake owned by Apple. While a buyer might not have any use for Palm’s hardware, the webOS software has received mostly rave reviews and could be worth something for a company like HTC that depends on operating systems from Google and Microsoft for its many handset models.
source: Bloomberg

Despite their intentions on still trucking along and hopeful about staying alive to celebrate the one year anniversary of their first webOS handset’s launch, there are rumors surrounding a company that is interested in buying Palm – and at the same time, save the company from a hasty demise. Speculations are swirling around PC maker Lenovo possibly interested in taking over the long time smartphone maker. It’s yet unclear as to what plans they may have up their sleeves for Palm if they do indeed take over the company, but these rumors seemingly have a positive affect on Palm’s stock value of late. Even though Palm CEO Jon Rubinstein may be defiant in looking for any potential bid offers, Lenovo’s purchase of Palm could increase their visibility in the market as they are about to take the plunge with their Android powered LePhone. Just a reminder for those that might’ve forgotten, it features a 1GHz Snapdragon processor, 3-megapixel camera, GPS, Wi-Fi, QWERTY keyboard. Palm’s patent portfolio is no doubt seen by many as a valuable asset to companies, but we’re confident that some of the things seen on webOS could also be integrated into other platforms. You never know, Lenovo may opt to utilize webOS’s leverage and integrate some of its components into some kind of customized Android experience a la Sense or MOTOBLUR.
via Electronista

According to Advertising Age, Palm has finally decided to fire ad agency Modernista and is currently looking for a new ad house. Modernista was responsible for the awful Palm Pre spots featuring a very pale looking woman. No surprise that the handset, once considered a worthy adversary to the iPhone, ended up selling poorly. While the weak sales cannot be blamed totally on the advertising, Verizon’s success with the Motorola DROID following a $100 million ad campaign shows the magic that can happen with a great phone and commercials that the public can relate to. At the time of its launch, the Pre had many good reviews but the low number of apps combined with the questionable ads did in the webOS device. Before Palm and Sprint could rebound, the beginning of Androidmania was underway and even getting a new lease on life at Verizon was not able to boost sales.

Where did Modernista go wrong? Commercials for two hot selling models, the Apple iPhone and the Motorola DROID, show each phone at work whether it is using apps in everyday situations or explaining in simple English that a certain handset does specific functions. Both models show useful things that real people want their phone to do. On the other hand, in the Pre ad below, the subject is reincarnation and the model says that before the Pre, she couldn’t keep track of the lives she was living much less recall her past lives. For most people, this would not be considered a function that they would need their smartphone for. Palm isn’t the only account that Modernista has lost recently. the ad agency lost its biggest account-GM’s Cadillac brand-late last year.
source: AdvertisingAge via Engadget

With a launch expected for later this summer, the training model of the Palm Pre Plus is expected to reach AT&T today. The model will be used off the sales floor to train reps, but when training is complete, the model becomes a live store display. With things starting to move rapidly, it could be that the carrier will be ready to offer the webOS flavored model a bit earlier than thought. The faster the distribution of the Pre Plus widens, the better the chances are that Palm could generate enough cash flow to stay alive. Speaking of cash, there is no word on how much AT&T plans on selling the phone for.
source: EngadgetMobile

Out of the blue, it looks like WebOS 1.4.1 has started to roll out to certain devices – but signs point to a to a limited European launch so far. Interestingly enough, some may perceive it to be nothing too major, but it does offer some minor bug fixes for background multi-tasking, compatibility for paid international apps, and the ability to use Mobile Hotspot – some goodies for our friends across the big pond. Although the update appears to be limited to O2 customers in Germany and the UK for the mean time, there was a Sprint user in Washington that surprisingly said that he received it – so it’s still a bit unclear as to who this roll out is actually affecting. It seems like the US is still in the dark for the most part, except for that one individual that somehow got it – but hopefully it’ll get released to the masses soon enough.
source: PreCentral

Both Android and BlackBerry owners who are on Verizon Wireless are starting to get their fill of Skype, but long time Windows Mobile users are still feeling a bit left out since their version was pulled out from Skype’s web site a few weeks ago. All fingers of course pointed to Big Red who played a major role in axing the support for the long time mobile platform, but there is still a shred of hope that it may come back soon. Even though some may argue about Skype’s reasoning behind ending support for Windows Mobile was a bit harsh, a recent internal memo hints to an eventual return for Windows Mobile and a new endeavor for WebOS. We’d imagine that there are still a number of Windows Mobile users in Big Red’s circle that would adore seeing an app, but it would also be equally nice for WebOS users as well to get into the mix of things. It makes more sense to offer support for the app to the platforms with the largest installed base – which undeniably would be Android and Blackberry. Luckily for Windows Mobile, they still might be the next in line to see the Skype app come back to the platform while WebOS might wait some time – that’s unless the recent price drops have really attracted customers in purchasing the handsets.
source: PreCentral via wmpoweruser

Palm CEO Jon Rubinstein reportedly released a memo on Tuesday that seemed to announce a shift from the webOS platform to Android. The memo was supposed to be up on Wikileaks at midnight, which it never was. The important part of the memo reads, “While Palm is incredibly proud of our engineers who spent timeless work and effort to bring us this advanced operating system,consumers simply have not caught on. To provide a better future for ourselves and customers, the only logical choice is to transition our hardware and software to the Android platform.” According to Wired’s Gadget Lab and Engadget, a source inside Palm says that there is no plan to switch to Android and that the company is committed to webOS.

There is no question that Android is hot at the moment. Even Rubinstein said that the DROID’s launch at Verizon before the Pre Plus was one of the reasons why his phone is selling poorly at Big Red. But there are things that Palm can do with its OS. Considering that many analysts who hated the hardware of the two phones love the OS, Palm could license webOS to another company who can make superior handsets. Whatever move Palm makes-and time is running out-dumping their home grown OS for the same software everyone else is using seems unlikely.
source: Slashdot via GadgetLab and Engadget

Things are not going well for Palm. It’s hard to believe that when the Pre was introduced last year, things looked so promising for the manufacturer. Now, the stock is down to $4, the Pre and Pixi have been flops at Sprint, enhanced versions of both failed to sell at Verizon despite high hopes, and AT&T is having problems while testing the pair of webOS phones for its network. So, you ask, what else can go wrong? How about Verizon deciding to pull the plug on promoting the Pre? According to the Examiner, Big Red will stop promoting the Pre at the end of the month. The site’s tipster says people are coming into Verizon stores with the Pre in mind, but are flipped to the Android flavored Motorola DROID by reps. In L.A., industry analyst Paul Mueller blames several defective Palm units for some of the problem. Mueller says, “When a device gets returned, people hear about it. It may  not be publicized in the media, but word-of mouth is powerful.”  But there is no question that the DROID has taken many possible sales away from the Palm units. With a much larger hi-res screen, many more apps available, solid construction and the free turn-by-turn navigation, the Android device has become Verizon’s flagship model. The carrier’s initial spots for the Pre focused on how the smartphone was perfect for “Mom” and the gender specific ads might also have been part of the problem. By the time Big Red changed the focus of the campaign, it was already too late. So now what ELSE can happen to Palm?
source: Examiner

While never actually confirmed by the carrier, AT&T was expected to offer its own version of the Palm Pre and the Palm Pixi as soon as next month. However, Peter Misek, an analyst for Canadian brokerage firm Canaccord Adams, is saying that the webOS handsets will not be released by AT&T until June or July. To make matters worse for Palm, the delay appears due to a long shopping list of technical items that the carrier has with the Pre and Pixi. As a result of these problems, AT&T is said to have reduced its initial order for the devices while lowering the marketing budget for the phones. Things are not looking too good for Palm and with the DROID said to be selling like hotcakes, Verizon might not be seeing too many Pre Plus and Pixi Plus units walking out the door.

What seemed so promising for Palm a year ago, has disintegrated right in front of their eyes. Now, it seems that all of the hope that Palm had of seeing things pick up with the inclusion of the handsets in the line-up of the nation’s largest carrier has evaporated, and AT&T apparently will be no help either. Misek now expects Palm to have shipped 670,000 units in the February quarter, down from his previous estimate of 720,000. For 2011, the analyst has reduced his estimate of sales from 4 million to 3.58 million. While no one could have forecasted Androidmania or the return of Motorola as a relevant player in the industry, perhaps the biggest surprise is how quickly the excitement that originally surrounded the Pre when it was introduced, disappeared. Does Palm have enough time left on the clock for one last Hail Mary play?
source: AllThingsDigital via EngadgetMobile