Looming Palm takeover could hinder Apple
Recent indications that Treo maker Palm Inc. may be acquired by one of its rivals have the potential to reshape the entire cellphone market, and could have their own ramifications for Apple's still unreleased handset.
Wireless industry website Unstrung broke rank with its peers on Monday and claimed to have reliable knowledge of an impending buyout of Palm, known best for the original PalmPilot and its Treo smartphones.
Although the frontrunner wasn't mentioned, site editor Dan Jones characterized the potential acquisition as a frenzied, four-way competition for the device maker. Two private equity groups are involved, Jones said, but the most significant potential buyers are likely to be two of the company's greatest rivals, Motorola and Nokia.
While either company winning the bid could have a major impact, a successful takeover by Motorola could revolutionize the cellphone industry -- and threaten Apple by extension, the source said.
Palm has been both a blessing and a curse to both Microsoft and its Windows Mobile OS, alternately competing with and supporting Microsoft with different versions of the Treo. A Motorola purchase of Palm would make the latter the single largest supplier of Windows Mobile devices and could lock Nokia out of much of the North American smartphone business. This would whittle the number of competitors in the market down to three in 2007 and make Apple an obvious target.
"If they own Palm, all of a sudden Motorola becomes Microsoft's best hope for competing against RIM and Apple," the informant reported.
Such a shift could cause problems for the iPhone if it were to take place, based on earlier analyst reports. Financial institution Morgan Stanley recently singled out Motorola and Palm as respectively irrelevant and vulnerable to the Apple device but had not factored in the possibility of a merger that strengthened the position of either rival.
That investment same bank is said to be brokering the deal on behalf of Palm and may provide an answer to questions as soon as Thursday, when it hopes to finalize the buyout and possibly deliver the news as part of the phone manufacturer's fiscal third-quarter 2007 report.
Wireless industry website Unstrung broke rank with its peers on Monday and claimed to have reliable knowledge of an impending buyout of Palm, known best for the original PalmPilot and its Treo smartphones.
Although the frontrunner wasn't mentioned, site editor Dan Jones characterized the potential acquisition as a frenzied, four-way competition for the device maker. Two private equity groups are involved, Jones said, but the most significant potential buyers are likely to be two of the company's greatest rivals, Motorola and Nokia.
While either company winning the bid could have a major impact, a successful takeover by Motorola could revolutionize the cellphone industry -- and threaten Apple by extension, the source said.
Palm has been both a blessing and a curse to both Microsoft and its Windows Mobile OS, alternately competing with and supporting Microsoft with different versions of the Treo. A Motorola purchase of Palm would make the latter the single largest supplier of Windows Mobile devices and could lock Nokia out of much of the North American smartphone business. This would whittle the number of competitors in the market down to three in 2007 and make Apple an obvious target.
"If they own Palm, all of a sudden Motorola becomes Microsoft's best hope for competing against RIM and Apple," the informant reported.
Such a shift could cause problems for the iPhone if it were to take place, based on earlier analyst reports. Financial institution Morgan Stanley recently singled out Motorola and Palm as respectively irrelevant and vulnerable to the Apple device but had not factored in the possibility of a merger that strengthened the position of either rival.
That investment same bank is said to be brokering the deal on behalf of Palm and may provide an answer to questions as soon as Thursday, when it hopes to finalize the buyout and possibly deliver the news as part of the phone manufacturer's fiscal third-quarter 2007 report.
Comments
Imagine switching all the Treo users to iPhones over the next few years
Hinder them because there are only three companies left? Fewer choices mean less competition. Sounds like a good thing for Apple.
I guess the point is that several scattered weak opponents are easier to beat then a few focused strong ones.
I'm sorry, much though I value many of the articles here, this one is pants and none of the conjecture makes any sense at all.
Motorola or Nokia buying Palm impacts Apple about as much as the prospect of Acer buying Gateway.
Simply, it doesn't.
Huh? This "source" is smoking crack. What on earth does a merger of Motorola and Palm have to do with the iPhone? So what if Motorola (or Nokia) took on Palm. Their devices still suck, and they're no competition for the iPhone. More importantly, Windows Mobile 6 is to OS X what Mac OS 7 is to Vista - hopelessly outdated and outclassed.
I'm sorry, much though I value many of the articles here, this one is pants and none of the conjecture makes any sense at all.
Motorola or Nokia buying Palm impacts Apple about as much as the prospect of Acer buying Gateway.
Simply, it doesn't.
Huh?????
It has all in the world to do... Can you not see the implications of a stronger enemy? Think.
Apple's got cash. Who knows maybe they are the ones getting ready to buy Palm.
Imagine switching all the Treo users to iPhones over the next few years
That would really stir up the market!
Could the DOJ antitrust division put the kabash on such a move? Seeing as Apple doesn't even make a phone yet, I guess they are safe...
While either company winning the bid could have a major impact, a successful takeover by Motorola could revolutionize the cellphone industry -- and threaten Apple by extension, the source said.
If a takeover "revolutionizes" the cellphone industry, it's good for everyone. It won't "hinder" anyone. It will drive better competition. I smell the seed of someone trying to keep a takeover attempt from happening after spreading plenty of FUD.
Huh?????
It has all in the world to do... Can you not see the implications of a stronger enemy? Think.
I see two weaklings clinging onto eachother hoping to come up with some way between them to battle a looming giant. Palm sucks. Motorola sucks. Nokia? Outdated. Windows Mobile? Sucks. Sorry, the enemy here is Windows Mobile, not Motorola or Nokia or Palm, per se. What's Nokia going to do with Palm that it wouldn't be doing already to fight against the iPhone? What's Motorola going to do with Palm to fight the iPhone? Write a new OS? Nope.
The genius of the iPhone is in the software as much as anything else, and the integration with iTunes, iPhoto, etc. That's something that buying Palm can never give the others. The implications? One company will spend a lot of time trying to integrate Palm into their product portfolio and waste a lot of money trying to get some value out of an outdated product line while trying to design something new to compete with Apple.
Either way, Apple wins by effectively making Palm irrelevant.
Think.
Apple so aren't going to buy any of these companies by the way. Why buy a dying hulk that has nothing you want? RIM are going to get slaughtered. Their software sucks, and their user base have been crying out for the next big thing for years now. Hello iPhone! Rev.B and C are going to own the smartphone just as much as the iPod == portable standalone digital audio player.
How are two shitty companies supposed to become better by merging?
Pixie dust.
http://youtube.com/watch?v=708wDFX28lc
Reading these reports makes me want to quit my job and become an analyst.
These analyst reports make no sense. How would Motorola purchasing Palm make them the largest Windows Mobile supplier and become Microsoft's best hope in fighting against RIM and Apple?? So the logic is Moto + Palm = Windows Mobile OS AND no more Palm OS!? I don't understand why this guy thinks Motorola merging with Palm will somehow create a mega Windows Mobile supplier. Why? Because Motorola can effectively kill off Palm OS?
Reading these reports makes me want to quit my job and become an analyst.
Palm is already manufacturing WM5-based Treos. Nowadays, it seems that their product roll-out strategy is to release a new flagship Treo under the Windows Mobile banner, then sell a lower-model-number, equivalent-hardware device a few months later running FrankenGarnet.
Moto also has some smartphones based on Windows Mobile.
Put the two together, and you've still got a combined company that sells smartphones phones based on at least three OSes... But the largest single chunk of smartphones out of that combination would be based on WM.
I've not seen any WM6 based devices in person yet, so I cannot comment on whether it is any better as an OS than WM5.
It's patented to the hilt, nobody can imitate it: imitation=get sued.
The only way to compete is to go one better, which doesn't seem like it cant be possiable for at LEAST 5 years. It took Apple 2 (maybe 3) years to get this done - how long do you think it would take Moto/Palm, Nokia or Sony to come even close?
Moto or Nokia buying Palm makes NO difference to anything. Windows mobile devices arent even in the same postcode as iPhone's interface - thats where it counts to the global majority of people.
The other thing, and this is the killer blow, say Nokia buy palm. who cares? - ALL the telcos still have ALL of the current phone/smartphone makers by the short ones. When have you ever heard a telco modify thier network to accomdate some new model from Nokia? never.
The big story is the 'deal' with the telcos - Apple has changed the game with iPhone, just most people haven't looked past the hardware into the bigger picture.
Z