Nokia rumored to be mulling takeover bid for Palm 31
Try as we might, we simply couldn’t track down the source of this any further than “Europe”, but rumor has it that Finnish smartphone maker Nokia is considering making an acquisition bid for Palm. Nokia, which like Palm, has fallen behind in the smartphone market as Research in Motion and Apple made considerable market share gains. Unlike Palm, Nokia has failed to recapture many hearts, minds, or wallets with its recent releases. James Faucette, an analyst at Oregon-based Pacific Crest Securities, said that a takeover of Palm would help Nokia to “close the gap” between it and the market leaders. Such a takeover would also likely give Palm a much larger research and development budget, Faucette said that Nokia’s $3 billion R&D budget is more than 10 times larger than Palm’s, which is no surprise. Neither Palm nor Nokia would comment on the rumors.
Faucette also claims that while Palm stock is trading around $17, to Nokia it may well be worth $25 to $30 a share. Looking at the outstanding stock currently on the market, that would put the acquisition value at $3.96 billion - $4.75 billion (including the impending 16 million share secondary stock offering). If we were to factor in the ~1/3 of Palm owned by Elevation Partners, the hypothetical bid would balloon to $5.94 billion to $7.13 billion.
Palm stock was buoyed significantly by the news, rising 7.02% ($1.12) to close at $17.07, a new 52-week high for PALM. During the day shares traded as high as $17.50. Yesterday Palm surged 14% in a perfect storm of trading and news. Monday and Tuesday combined, Palm has risen 21.8%, and from the December 2008 lowest close of $1.42, at the close of trading today Palm was up an astounding 911%.
Now, we do have to ask ourselves how likely it is that Nokia would actually make a bid for Palm. It is a possibility, given the age and limitations of their S60-Symbian operating system. It would also give Nokia a significant foothold in the United States, where they have long struggled for traction. Purchasing Palm would not just add to Nokia’s market share, it would also add the Pre, Pixi, and - most importantly - webOS to Nokia’s product portfolio, as well as the still-has-life-left-in-it Palm name.
It would not be unheard of for Nokia to make a large multi-billion acquisition; last summer they purchased Navteq for $8.1 billion. Even after that massive purchase, Nokia has around $9 billion in the bank - more than enough to self-finance a takeover of Palm.
But would Palm be amicable to such a takeover bid? Our judgment is no, as Jon Rubinstein and the rest of Palm seem to have an attitude that they can do it alone and do it better. It is likely that more than a few companies have privately expressed interest in Palm. If Palm’s judgment of their potential position in the expanding smartphone market is correct, they could very well become a large player in the sector in the next few years (which would make a takeover bid even more expensive).
Our friends at sister-site Nokia Experts would probably agree; Palm and Nokia should, and likely will, remain two separate companies.
31 Comments
I would be OK with that. Better than Microsoft... Just keep WebOS for dang's sake!
I like this one alot. Nokia does make some great quality phones. Imagine the N900 with Web OS.
Weird - pehaps we could see the return of PalmOS to Palm via the Garnet emulator :D
Noooooooooo!!!...I hated the last nokia I had about 100 years ago!!
but on second thought those billions would be cool to spend on ramping up WebOS R&D!!!...Wow a palm/nokia merger just might work!...both kinda need what the other ones got...
Hm, I don't know if I should be happy or sad.
If Nokia buys Palm I hope they don't touch Web OS and stick with the hardware design.
Leave the software to the PalmOS team.
Okay so our source for this story is "Europe" and we're not sure exactly which 1 out of 731,000,000 people said this, but somehow we decided even though we couldn't nail down a source this wild completely random rumor deserves front page attention? I love this site, it has been a tremendous resource for Pre apps, news, hacks and knowledge, but sometimes I think these guys consult a magic 8 ball (maybe even the one in the home brew gallery) for news material because I don't have enough fingers to count all the silly stories these guys have come up with.
It wasn't a rumor that we heard - when we report these kind of rumors its because some larger news outlet (such as Bloomberg) thought it worth mentioning or because, as was the case today, the rumor had an impact on the company (stock price).
Fair enough. It just seems a bit far fetch and without any reliable source I simply wonder of its worth. However if you're interested I heard from a guy in Asia that Nabisco may also be interested in buying Palm.
Oh, give 'em a break. It's a blog. They are reporting the "news" of "rumor." It's what blogs do. And then they give you a run down on their take of the likelihood of the rumor being true. Standard stuff. Blogs that don't do these things have few followers, and no commenters.
If it is true, Nokia better keep their grubby little fingers out of WebOS. Nokia may make great hardware, but once you start using their terrible interfaces, it makes sense why they can't make it in the smartphone arena.
Pretty far fetched rumor, but still, the thought of the Palm team being the software house for Nokia is a pretty tantalizing one. Nokia's hardware is (usually) pretty top notch, so that could be an interesting match, but I'm afraid this is probably nothing more than pipe dream.
this actually makes sense. the ovi sdk is also based on HTML5/CSS/JavaScript. It's very similar to webOS.
I like this! ^_^)Y
i dont like the new comments
I hope palm doesn't sell. One of the things that has always made palm great is the fact that they think outside the box. Some times there is a large gap between innovations but still that would get lost in a large company atmosphere no matter what nokia might say or do. If nokia wants to license webos then great, otherwise I hope John R and crew are left alone to finish what they started.
I hope palm doesn't sell. One of the things that has always made palm great is the fact that they think outside the box. Some times there is a large gap between innovations but still that would get lost in a large company atmosphere no matter what nokia might say or do. If nokia wants to license webos then great, otherwise I hope John R and crew are left alone to finish what they started.
I hope palm doesn't sell. One of the things that has always made palm great is the fact that they think outside the box. Some times there is a large gap between innovations but still that would get lost in a large company atmosphere no matter what nokia might say or do. If nokia wants to license webos then great, otherwise I hope John R and crew are left alone to finish what they started.
Sorry, don't know why it posted 3 times. Screen bounce maybe?
Didn't Nokia just sponsor the Endgaget interview with Jon Rubinstein? Interesting.....
I also seem to remember the interviewer needling Nokia about having someone come in and clean up house. Its just a coincidence, but the interviewer seemed to be referring to Jon with these statements.
Maybe Nokia was listening.
I hope palm doesn't sell. One of the things that has always made palm great is the fact that they think outside the box. Some times there is a large gap between innovations but still that would get lost in a large company atmosphere no matter what nokia might say or do. If nokia wants to license webos then great, otherwise I hope John R and crew are left alone to finish what they started.
Nokia is the world's largest cell phone manufacturer, and they are desperate to gain some market share here in the US. But, they are also adverse to carrier subsidies, which is one major hurdle for them in the US market. There are some intriguing aspects to this possible deal. Nokia definitely makes high end hardware. And isn't their new "maemo" OS (which I guess is replacing symbian) also based on Linux. WebOS might be a big prize in their eyes. But it might also be seen as the biggest competition to what they are trying to do.
Anyhow, if I were Palm, I would be concerned if this rumor is true. I have a hard time believing that, from a cultural standpoint, that these two companies would be able to be friends and play nice.
If Nokia could bring Palm's hardware quality and manufacturing standards up to Nokia's level, this might be a very good thing.
Wow... with Palm's patent portfolio... Nokia will be... wait for it...
Nokia is the world's largest cell phone manufacturer, and they are desperate to gain some market share here in the US. But, they are also adverse to carrier subsidies, which is one major hurdle for them in the US market. There are some intriguing aspects to this possible deal. Nokia definitely makes high end hardware. And isn't their new "maemo" OS (which I guess is replacing symbian) also based on Linux. WebOS might be a big prize in their eyes. But it might also be seen as the biggest competition to what they are trying to do.
Anyhow, if I were Palm, I would be concerned if this rumor is true. I have a hard time believing that, from a cultural standpoint, that these two companies would be able to be friends and play nice.
5 years ago, Palm wanted to divest its hardware business and become a software company. Now they have a mobile OS laden with world-class potential but are still plagued with complaints about hardware build quality, and need capital for R&D and market development on the platform.
Nokia makes some of the world's greatest mobile phone hardware, driven by the weakest smartphone operating systems, and are hemorrhaging market share worldwide, but have a large war-chest of capital for acquisitions.
When looked at this way, it does actually seem like an interesting opportunity for both companies.
One interesting thing to note:
Palm has staked its future in using Linux.
Nokia has also staked its future in using Linux.
Perhaps the two have more in common than many people think. Couple that with Android, which is also Linux, and you notice a big trend.
I'd be perfectly OK with this as long as Palm continues to operate at the very least semi independently. I'm okay with Nokia using WebOS but I would like to see Palm remain a separate brand. Since Nokia have so much difficulty with the US smart phone market, they could use Palm for the U.S. and Nokia everywhere else. Of course the Palm phones should keep their distinctive design philosophy, but with access to Nokia's R&D and Nokia's volume manufacturing Palm would get a nice boost in its speed to market with software updates and better quality manufacturing as far as phone cases go.
Nokia sucks. All their phones seem cheap. I hope this isn't true. The palm pre is a great product from a US company. Lets keep it that way.
Source of the false rumour that Nokia is going to buy Palm is a press release issued Tuesday in Finland, home of Nokia, about Nokia's purchase of Plum Ventures, Inc. That's Plum, P-L-U-M, not Palm! Of course if you are a non-English speaking Finn Palm and Plum are just two very similar, random sets of characters. That and previous Nokia/Palm rumors started the rumor anew in Finland. It jumped the big pond to The US, and back again to Europe, without the clarifying press release. Palm stock shot up when the rumor began circulating widely and still hovers above $17.00 a share. Wouldn't want to hold a lot of Palm Stock when this hits the wires. English version of release: http://media-newswire.com/release_1099224.html
A fresh injection of R&D capital might be just what the doctor ordered so that Palm could get the webOS infrastructure (including the App Catalog) up to speed more quickly than they have so far.
Whatever will be, will be....
BTW, if you don't see what you're looking for on this site, you can also find Palm Pre accessories here.
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