Tej Kohli stumbled upon a report by Bloomberg which states that California based Smart Phone Manufacturer Palm Inc. is looking to sell itself. Read the inside story at Tej Kohli blog:
After failing to make a mark in the smartphone market, Palm Inc., is seeking a buyer to purchase their company and is inviting bids from interested companies as early as this week, said Bloomberg, which quoted 3 people familiar with the situation.
However, the spokesperson for Palm in Europe declined to comment on the report.
The US based provider of mobile products, which manufactures the Pre and Pixi phones and develops WebOS phone software, has apparently talked to investment banking and securities firms – Goldman Sachs Group Inc and Qatalyst Partners about finding a potential buyer.
The Taiwan based HTC Corp, and Lenovo Group Ltd., which is based in China, are likely to contest for the ailing smartphone maker.
China-based Lenovo group and Taiwan-based HTC group are likely to bid for the loss-making smartphone group.
In its third quarter results last week, the company announced a loss of $22 million/ 13 cents per share. In fact before posting its third-quarter results, palm lowered its forecast on February because of the slower-than-expected sales of its products.
Besides the losses, it also reduced its revenue forecast for the fourth-quarter. Compared to the 305.8 million estimate made by the market analysts, the company is expecting less than $150 million revenue in its fourth quarter.
“Palm’s limited scale, distribution and weak global brand outside the United States all point to a takeover as the next chapter in the Palm story,” said CCS Insight analyst Geoff Blaber.
“The company has developed a highly valuable asset in webOS. The challenge for Palm is finding a buyer prepared to pay a premium for an immature platform when many potential suitors have already invested heavily in Android,” he added further.
Earlier, the major technology companies like Dell, Microsoft Corp. and mobile handset makers like Nokia and Motorola, were also cited as potential buyers.
Why Palm failed to impress people?
The first and the foremost reason was its poor marketing. The ads were confusing and some even considered them crappy.
Another blunder was to link its Pre smartphone with Sprint network, which already had several glitches. Additionally, the price tag of $199 for its Pre was high enough to dissuade buyers. Also, when it comes to applications available to the buyers, Palm is behind Apple.
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