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Palm seen as takeover target due to iPhone rivalry

updated 02:35 pm EDT, Fri March 13, 2009

RBC Upgrades Palm

Palm's designs for the Pre and webOS have spurred RBC analyst Mike Abramsky today to upgrade his rating of Palm's stock, indicating that the smartphone creator may be a takeover target due to its appeal versus the iPhone. He now expects Palm to outperform market expectations and specifically cites the Pre's hardware and software advantages as potentially leading other companies to consider a buyout. Estimates would put the company's worth at about $15 to $16 per share, or about twice the going rate for Palm's stock.

Abramsky doesn't claim to know of any deals but notes that a bid might come from both existing companies looking for webOS to those who have either no hardware, software, or either for mobile devices.

"Possible buyers include handset and hardware vendors such as RIM, Microsoft,
Nokia, Samsung, LG, Sony Ericsson, Hewlett-Packard, Dell and others," he writes, with neither Dell nor Microsoft making actual cellphones so far.

The RBC researcher singles out the Pre's hardware QWERTY keyboard as an important factor that may sway some buyers. In software, Palm is also expected to be "less restrictive" than Apple in allowing apps on to its own online store and to support a broader range of features, such as in-browser Adobe Flash (confirmed for late 2009) as well as integrated contact information from both social networking sites as well as e-mail and IM. Palm's plans to build versions for both CDMA/EVDO and GSM/HSPA networks, as well as to eventually build differently-shaped webOS phones, are also potential advantages.

While Palm carries risks, including the possibility that it may run low on funds, Abramsky is confident the company can raise enough funds to see itself through to the Pre's spring launch and turn around its fortunes. The Sunnyvale, California-based company's main obstacles are its ability to orchestrate a smooth launch as well as the difficulty of winning back defectors who left Palm's models for other devices.




by MacNN Staff

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Comments

  1. ff11

    Joined: Dec 1969

    +1

    RIM

    Why would RIM buy Palm? I don't see an obvious hardware or software advantage they would receive from such a purchase.

  1. russellb

    Joined: Dec 1969

    +5

    Funny

    I always find this comment funny "Palm is also expected to be "less restrictive" than Apple".

    Apple can hold out and be as restrictive as they want while they hold the lead and then in a blink of an eye OPEN up their software and open up the Iphone to further blow competitors away.

    It also does not allow for the V3 of the Iphone and V4 as Apple continue to improve and introduce new things. All these comparisons are comparing NEW upcoming devices to OLD previous Iphone versions, they need to be comparing them to "what Apple has up and coming"

  1. johncarync

    Joined: Dec 1969

    0

    Another Prediction

    I think this is the same guy who predicted Circuit City was a good takeover target. :-)

  1. slider

    Joined: Dec 1969

    +1

    The Frustrating Thing

    Frequent readers/posters at these xxxNN site are pretty aware of the BS of these analysts' comments/predictions. The problem is that investors seem to put a lot of stock in what these guys are saying and influence the stock price of companies. When they are right they are just stating what the general community already knows, but even then they seem to blow it more often than not. Oh, and lets not forget the advice from these guys regarding what this or that company "should" do - if these guys are so business savvy, why aren't they running their own companies and making a fortune? The cliche should be "those that can do, and those that cannot Analyze".

  1. bobolicious

    Joined: Dec 1969

    0

    Palm software betters...

    ...iPhone in some areas such as contact access for large databases - my ancient treo still seems easier to distill contacts than the current hunt & peck of iphone v2 - so do I hang hopes on v3...?
    ;-)

  1. dimmer

    Joined: Dec 1969

    0

    If...

    If the Pre isn't a massive, massive hit (and it's looking doubtful that it will be) Palm will be roadkill within a year or two. If someone wants to buy it just to shut it down and reduce competition, it's still probably not worth the effort.

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