Sale not the only option - Palm exploring licensing, fundraising; Cisco a potential buyer 89
The shocker headline from late last night was that Palm was up putting itself up for sale. According to Bloomberg, Palm enlisted the help of Goldman Sachs and Qatalyst Partners in the quest to find a buyer. If you fear what could come of Palm should they be purchased, Reuters is here to assuage your fears. According to Reuters’ source, Palm’s retaining of the two banks (Qatalyst focuses on technology investments) is not just to arrange a sale. Palm is apparently exploring all options, as we would hope they would.
On the same table as “sell” are at least two other options: seeking additional capital investments (such as the hundreds of millions of dollars injected into Palm by Elevation Partners) and licensing the webOS operating system. Either would allow Palm to remain a standalone company, though if you had to ask us, extra money stands a better chance of success than licensing webOS. The smartphone marketplace is incredibly crowded and Google’s Android OS has snapped up licensees left and right. The smartphone marketplace is growing increasingly crowded, and as much trouble as Palm has had convincing customers to buy their phones, we can see even greater difficulties in getting manufacturers to pick up webOS.
Meanwhile, StreetInsider.com is reporting that Canaccord Adams' analysts expect that if Palm is purchased, it will be taken in at below market value (a proposition we find laughable). According to the analysts, four potential buyers have submitted bids between $1 billion and $2 billion (Palm's market cap stands at a hair over $1 billion). Only three of the potential suitors have apparently made it to the second round of bidding: HTC, Lenovo, and Cisco (surprise!). Yeah, Cisco, the company known to laypersons as the guys that make routers and big video conference rigs only presidents and CEOs can afford.
Palm’s stock rallied hard on the NASDAQ today, ending trading up 17.05%, closing the day at $6.04. Shares of Palm have risen nearly 57% since last Wednesday when the first serious rumors of a buyout surfaced.
Thanks to Mikeh20 and Markus for the tips!
89 Comments
I hope they license!
Licensing may not prove viable, though. Can you name a company that has a successful licensing and own-label model?
I can only think of two that have really pursued it, and neither has had great results: Google (which has had much more success licensing Android than with the Nexus One) and Palm way-back-when, and that led to the whole PalmSource spinoff, which Donna Dubinsky recently called a mistake.
I frankly think palm should not sell itself, but collaborate with a computer maker and make tablets as well as phones. Like sell 20% of itself to a PC maker.
Major problem with the hardware is the sliding mechanism. Palm pixi does not have hardware problems. What palm need to do, is make exactly two same devices for palm pre-2. One with keyboard, one without. Basically it would be like supporting two devices for the cost of one.
I think they should get the virtual keyboard out, so they could beta test it, if they make a keyboard less palm pre version.
PS: I wish the photo had few palm phones lying in the cookie plates.
Ok the "Bake Sale" picture made me laugh! But none of this is a laughing matter. How come no one has done a "Palm Does" commercial to show what it can do that the others can't? Worked for droid. I can't go back to a phone with out webos!
Below market value could easily happen. The increase in stock price from the $3.50 range depends, entirely, on some kind of bidding war. If there is only one buyer or a potential acquisition falls through, then the stock drops down to whatever Palm is worth as an ongoing concern which is seemingly $3.50 or less.
Huh?
Since Plam put themselves up for sale, this will be a friendly acquistion, so the price will be what they agree upon. The stockholders will have to vote on it, including E.P., so the chances of a (far) below market buyout being approved is slim, and the current market price does not take into account the value of Palm's patents.
Huh?
The stock market doesn't realize the value of Palm's patents? Yes this sale could happen at less than. $6 per share. if the offer comes in at $4 and the shareholders refuse to accept this price then the stock could fall to $3.
One analyst is saying tonight that potential buyers are going to come in right now and kick the tires but will draw the process out and let the pressures mount on Palm in order to get a better deal.
lol
that picture is funny
bake sale! where is the lemonade??
yeah i agree i laughed out loud
Greatest news picture ever.
that's a nasty picture man. Change it to something a little less insulting. I would be pissed if I was Jon.
So true. His next job may be CEO of PreCentral.net so you better watch out.
http://movies.apple.com/movies/us/apple/getamac/apple_getamac_bakesale_2...
what could Cisco have in mind with a bid I wonder?
Cisco has been making a big push into the consumer space (the Pure Digital acquisition, for example).
This seems like a perfect fit to me. Palm needs more money (Cisco has deep pockets) and Cisco wants another market to enter (they get patents and a great platform).
Of the three companies, Cisco seems the least likely to destroy what makes webOS a great platform.
People said that about Cisco when they created a server line - how they've got a compelling UCS system. I think Cisco would be an incredible win for Palm if they get that buy. Cisco's got more money than most companies and they know how to market. Cisco is looking to take over every aspect of the IT industry - if Cisco picks up Palm, this would be incredible. Just imagine video conferencing available only on your PRE! Imagine VoIP at work and transferring calls back and forth from landline to cell phone. Imagine VPN on the Pre! Imagine WebEx on webOS! Imagine what Cisco could do!
No joke, if Cisco bought Palm, Apple/Google/Microsoft would definitely be shaking. Cisco is a very serious contender and I've seen their phone lines - wireless and wired. They've got alot for phones they could do.
What's next? Raffles? Bingo? What a disgrace.
If you're going to be a troll, at least be interesting or entertaining. Yawn.
It has been a while since they last announce new features that surprise the market. What happen? Signs, Banners, Decals, Lettering
Heck, I would do a fundraiser if Palm would send me the candy or something. Anything I could do to help.
LOL this is all beginning to sound like some giant Pump and Dump scheme. Not saying I think any of this is true or false just amusing. What a circus.
EP can't sell in the open market in this situation.
And these are public actions. Do you understand what pump and dump is?
I think licensing would be the best option. I also believe a tablet would be the best option something akin to the Dell Mini 5. WebOS would be a great OS for a device like this.
I actually like the idea of Cisco. They've done well with the companies they acquired, Flip and Linksys as examples.
Goes back to Palm's roots when they were owned by 3Com, another networking company.
I agree.
Cisco would be an excellent fit.
They'd get the microphone APIs working quickly. They might even include a voip client & voice recorder as stock. :-)
They'd definitely make sure that an OTA release was never distributed without the networking in proper order.
They'd definitely be able to sell the device since they're such a large company that they could afford to do things right the first time, and they obviously understand a great deal about good value. ;)
They have TONS of strings in a WIDE range of fields across the globe.
At the same time, they need something with potential so that they can put their employees to use on new territory for them.
They're American-based. That's always nice. In San Jose, CA no less. Wouldn't take much to find local people to fit in with the gang that already designed & maintains webOS... and move guys both ways of course, since they're so close.
I mean.... what's not to like about Cisco?
Just a match made in Heaven. Literally, it'd be a great marriage.
Please license webOS!
I would love to see webOS on all manufacturers devices.
I'd also love to see them license stuff like the touchstone charger to other manufacturers, maybe even non-webOS devices.
Palm has nobody to blame but themselves. Jon should be going on record and admitting that he is responsible for this catastrophe. I'm glad Palm is selling/licensing...maybe now we'll see a more stable OS and better quality hardware. Burn me at the stake for saying this all you want, but it's the truth.
Dude Palm was struggling long before Jon took over as CEO. It's only been a little over a year since the Pre was ANNOUNCED, And in that time Palm has made smart moves to quickly expand their platform...
-A fresh, thought-out OS that is simple yet powerful.
-SDK available that potentially reach more developers than Apple's.
-Web-based app-builder
-Side-loading of apps is possible.
-PDK which makes porting games from App Store incredibly easy.
-Hands-off approach to patching/theming/etc
Among others. Jon's biggest mistake was a dumbass advertising plan, which is nothing negligible..but blaming him for everything is like blaming President Obama for the economy's crash in late '08.
Verizon pulled the plug through this empire:
www.microsoft.com
They are now manufacturers of phones...
Hard times for palm and I hope they stay intact as a unit. No licensing please. I wouldn't like to see webOS on some cheap chinese second class phones...no pun intended.
If all people who liked webOS would only had put their money where their mouth was...
Sorry for the double post....
well cisco for the most part would be a good choice. They definitely have money, and I think they would let palm be palm but support it with the money it needs. wcisco owns flip video cams and linksys so adding palm to the mix isn't bad . They can probably bring new elements to palm like better components, I'm sure they can design good hardware too. There is endless possibilities with cisco, also lenovo too because they can concentrate on building webos, and making it better. I'm not too sure aboutt htc because they have different os that they support so the future of webos might not be a priority to them, especially if their other os phone does better on the market than webos. I just hope that who ever purchase palm if they purchase palm would keep it's current team, add new talent and improve webos faster and better than what palm is doing now.
Your graphics for your stories kill me! Palm bake sale, I love it!
Who's next? GM? Ford? McDonald? Nike? United Airlines? Disney? It's becoming more ridiculous every day!
GM's already done it. United, well, it's an airline so it's only a matter of time. Ford, McDonalds, and Disney are all fantastic and well-run companies in no immediate danger (especially McDonalds and Disney).
I will be looking forward to WebOS in my Fusion.
I like the idea of cisco buying Palm we need a company with big pockets that is not already in the smartphone market so they will have a real desire to make the WebOS the big thing it should be.
I still love my Pre.
Bring out the flash already adobe! Use that as a strong point in a commercial, it will turn iphone owners heads, improve stocks, raise the bid for palm and bring in lots of ATT subscribers to Palm. Best time is now! Show all the pre's potential!
Speaking seriously it would be nice to see Palm licensing webOS to a tablet maker, having a deal with Amazon for video-ebooks downloads and a deal with HTC for designing new hardware (maybe paying with some patents).
Thing's are getting crazier by the day...
But hey, Palm, we're with you for the long haul.
All we ask, for the love of god, keep webOS alive. Don't license, you have an awesome team which can truly make webOS what it is destined to be, the second coming of the Jesus OS is webOS. Everyone knows it, you know it, we know it, we're all rooting for you.
Just realize that dream.
I love my pre. I can't fathem the thought of no multitasking. Load a page while playing a game then hoping back cheaking my bank account then filling in an order and back to my game. Oops just took a phone call and finished typing this. Could you give up that power?
fathom
my bad
There is an edit button.
Could you change the pic? Made me laugh, but that is rough!
Derek, I have to disagree with your statement:
"The smartphone marketplace is growing increasingly crowded, and as much trouble as Palm has had convincing customers to buy their phones, we can see even greater difficulties in getting manufacturers to pick up webOS."
If this is true, then Palm should just fold up. If there is no way that Palm can create a marketshare with 5-10 phones, then there is no way they will do it with just 2.
Also, I am not an expert by any means, but I have to believe that updating a phone with a new OS is much easier than creating a new phone from scratch. The old Treo was on multiple platforms. Why can't HTC's EVO be on Android AND WebOS?
Besides a merger/takeover, I think licensing webOS is the best option for Palm. If JR is right and webOS is the "best" out there, then people will see it and these phones will sell. Then, with a name in the marketplace, they should be able to sell their own phones (assuming they are of better quality).
But Android is basically a free distribution to the manufacturers. Why would they pay Palm for WebOS if they can get Android for free? I think it is more likely that HTC would either go to WebOS exclusively, and dump their Sense and TouchFlo developments just to be out of the Android-fragmented-who-knows-when-we're-getting-an-update-how-many-different-kernels-do-I-have-to-progam-this-dumb-widget-for-anyway? ratrace, or try to meld WebOS as the future u.i. overlay for all of the operating systems they work with.
Palm best licensing bet is their patents. they could offer safe-harbor to everyone, leveling the playing field for every handheld device manufacturer and developer out there against Apple. Which is the even more likely reason for HTC to buy Palm, and which could mean that HTC would just shelve WebOS entirely.
But...but...CARDS! AND SYNERGY!!
Anyone who thinks WebOS has a future regardless of whatever Palm's future ends up being is just setting themselves up for disappointment.
"Anyone who thinks WebOS has a future regardless of whatever Palm's future ends up being is just setting themselves up for disappointment."
Yep.
Given that lots of companies want to enter the smartphone OS market, and there are lots more on the horizon (Windows Phone 7, Meego, Bada, etc) don't underestimate the value of a smartphone OS that's capable of running on a phone or tablet, and already has established developers (even if it's a relatively small number), a fan base, and 3rd party support.
WebOS would be a wonderful replacement for Lenovo's Skylight tablet/netbook OS, and would give both Cisco and Lenovo a head start in the market compared to the incoming competition. And if they decide to compete vs RIM in the corporate world and add corporate features to WebOS it has the potential to be pretty devastating to RIM, which is currently really the only real contender in most of the corporate handset market...
So basically, anyone other than Google or Apple would keep WebOS alive in some form or another. HTC would likely scrap the backend and just borrow some UI elements, while Cisco, Lenovo, and lots of other potentials are likely to keep most if not all of it...
Yes, because in a world full of billions of people there can only be 3 operating systems.
Yes. That's the current situation.
He said 'difficult' but not impossible. Nothing in this market is easy. I bought the Pre before it was fully developed because I knew I had to support the franchise if Palm was to survive. They took a risk, I took a risk, and they need to get creative and openminded to survive and hopefully grow the platform.
Friend of mine brought up an interesting point:
Imagine Cisco buying Palm and putting out a 4G WebOS phone that's VoIP only. No minutes, just data and voip, and a service similar to Google Voice (if not using it outright) for text messages...
The more I think about it the more appealing Cisco and Lenovo look (Lenovo's done pretty damn well with the ThinkPad line since they bought it from IBM). Though I kinda prefer Palm stays an American owned company, so Cisco looks better in that regard...
EDIT: Additionally, I'd imagine if Cisco got it they'd make a hard and furious push to make it directly compete with RIM in the corporate space. Palm still has a relatively solid name in corporate computing and that's a much less crowded field than the consumer market. Thus it'd be capable of bridging the gap between consumer and corporate using its current UI and consumer friendly apps in conjunction with the better corporate integration Cisco might push for. It'd be the Blackberry for the growing number of users who are fed up with RIM...
I can COMPLETELY see this as a reality and webOS be the one to rule them all...
..I never thought I'd be hopeful/eager if/when serious talks about a Palm buyout started.
Cisco to save the day!
They'd leave Palm intact but would provide the needed capital and decrease a lot of the hardware acquisition and production overhead.
It would also scare the pants off GOOG, AAPL, RIM, and HTC because they now have big money on top of the patent portfolio.
Cisco? Cisco!?
I would have never even dreamed that to be a possibility. I'll have to mull the implications on that for a while before I comment.
In the meanwhile, I wonder if Palm will hire me as an exec. If this is all true, they're almost following my playbook from the March conference call. ;P
Hey, Ruby baby! PM me, I'm in the forums! ;^)
i say Cisco!!! i really hope they dont license it out, look what problems android users are having with the different versions, i hate to see that happenning with WebOS...
Somebody deleted my comment on other thread but I will use this as opportunity to say once again that Palm will not sell itself all the way.
I will say Cisco, or Lenovo.Why? Because, these two company doesn't have smartphone, or never got into the smartphone market. It will make sense, also,it's their first smartphone market,& doesn't know anything about it. They will keep current Palm's R&D engineering Team,& bring in new mangement team into Palm,& give Robi&his team, more fanacial support to succeed in future webOS development. They will keep most of Palm valuable software engineers intact, to release webOS 2.0 & develop a more solid hardware, because of their heavy financial resource,& a better universal marketing punch. With such resource, now, Robi& his team can develop webOS the way they imagine without a financial burden. In the end, Cisco or Lenova will already have a well establised OS, that is already in some part of the world. They can just continue from a start point,& doesn't have to start over into their first smartphone market. Whoever buys Palm,will have an edge for their first entrance,& be able to compete with the big boys. No to HTC.They already got the sense UI, Android,& windows. Buying Palm will just be for patents, nothing more. HTC NO! Cisco or Levono.
This.
You just described the main issue I have with HTC possibly buying Palm.
+1
Any company that will keep webOS intact.
Lest we forget, HP is introducing a competitor to the apple Maxi (iPad). Think it may have webOS?
Seeing as how it's well established that it's running Windows 7, and that the project is a partnership between Microsoft & HP, I'd say it's a solid "No" in answer to your question :P
The competitor you are referring to is called the HP slate. And it runs Windows 7 Premium with a HP optimized touch interface.
Definitely not webOS, although it would be nerdgasmic, and besides, 'takeover talks' for Palm have only just begun :-)
I am really hoping for Lenovo. HTC just has too much of a conflict of interest.
Lenovo needs a good OS for their tablet, hybrid laptops, skylight initiatives.
I said this in Dec. in a thread talking about Cisco buying Palm. I think it is still relative.
"I find this funny, a while ago there was a thread asking who should buy Palm. Everyone was saying Nokia, RIM,etc. I thought either Sun, or Cisco. Sun could integrate the mobile end within their servers, and has the Linux mindset. Cisco, is so integrated into business it is almost hard to notice. It would be great to integrate the business end from within, instead of trying to 'work their way in' from the outside. Not to mention neither company have a mobile presence."
Seriously, I so would love to see Cisco do this...
I found a post you made in November mentioning it as well: http://www.precentral.net/round-table-palm-sale
I have to admit, when you mentioned it, I thought "no way." You have my humbled apology, sir. I shall never scoff at your wild prognostications again!
I'm still not sure about the whole Cisco thing yet. When I put my finger on it, I'll post it in the forum.
hell i've been saying they should be licensing webos for nearly a year rather then make hardware.
Actually, maybe Cisco isnt just a potential buyer but, potentially, an investor/collaborative partner?
:)
Oh yeah, I like the thought of Cisco. Best pairing I've heard thus far!
I hate to say it but I want HTC to buy Palm.
I'm giddy thinking about an HTC flagship phone with WebOS on it.
I've seen some decent products come out of HTC.. but not all great. If they already have 2 OS's to play with, why bother with a 3rd?
But Cisco.. now that might be a worthy pairing. An easy to use, multi-tasking beast, professional smartphone... very enticing.
Ha! I said Cisco weeks ago! It would be the perfect product fit for them. AND they would purchase it with the intent of continuing webOS, there would be no reason to kill it off.
plz I don't want any one to buy them and if so I want it to be hp if not give it one more run wit new hardward and the 2.0 software
Cisco sounds great. I'm sure they could get one of their 720p sensors from the flip into the back of a palm phone and they really know how to do video conferencing etc. That sounds like a great idea, plus they have good ads!
First it was HTC, then Lenovo, then RIM and now you guys are calling for Cisco? Wow, you guys sure can be persuaded with each new article.
Next article will have Tyco as the next prospective buyer and you all will be jumping up and down in joy talking about how you can add little wheels and be able to use your phones on your race tracks!
if cisco bout palm and put their power behind the brand I think you would see the perfect cloud based phone .. It would be the perfect solution.. And probably be the end of the iphone era
You're very humorous!
Don't get too excited about Cisco. They've been known to buy companies for their IP and shut down the actual business.
You'd have a good point....if it made any sense.
It does make *a little* sense.
Not exactly "shut down the business", but they did stifle the homebrew community behind Linksys when they realized Linksys was essentially giving out routers for $40 that Cisco was selling for 10x times that price.
Cisco really had no choice but to do that with Linksys, but I really don't think that would apply to Palm. At least, I hope not. I hope that they wouldn't create a device so secure that homebrew comes to an end. That would really suck.
It does make sense if you want the intellectual property, such as Palm's rich patent portfolio or their Web OS, but you don't want the money-losing business it's attached to. Of course, I would hate to see that happen and would love to see Web OS proliferate.
Helios, name one.
I've had a relationship with Cisco for almost 12 years, and not once has this happened. Yes, companies are purchased and technology is either incorporated into existing products or re-branded, but Cisco doesn't throw money away to shut down products or companies. In fact, Cisco has the best reputation in the IT industry for making smart acquisitions.
See my above post about what they did with the homebrew community behind Linksys.
It is a small concern, but I still think Cisco would be the best fit... and I hope this buyout hurries along, honestly. Time to get to work.
Neopath.
http://searchstorage.techtarget.com/news/article/0,289142,sid5_gci125005...
Cisco FTW!
In all seriousness, if someone buys them, Cisco would be THE ideal company. They would infuse a lot of cash into Palm, especially in terms of marketing, and would be able to provide Palm the clout to push into the corporate sector. Palm would be able to push out more corporate centric features and really give RIM a run for their money, assuming Cisco pushes them for even better hardwarre.
If this has to happen, Cisco would be the best one.
Cisco? Who is that?? Isn't Cisco that rapper or something like that?
Come on people...that picture is funny. Dont you all have a since of humor at all? Geeeze
Why Cisco Will Buy Palm -- http://www.kensheppardson.com/2010/04/12/why-cisco-will-buy-palm/