Should Apple Buy Palm?

Ed Sutherland ()

Should Apple Buy Palm? Palm seems in dire straights. Cannaccord Adams has cut its estimates following word AT&T may delay launch of the Palm Pre and Pixi from April to June or July. Now other analysts are suggesting Palm’s 400 handset patents could spark a bidding war between Apple and Google.

Cannacord analyst Peter Misek said Tuesday he’d “recently learned” AT&T would delay launching the two Palm handsets due to what he said was a “long list of technical issues” with the smartphones. Additionally, the carrier plans to “sharply reduce its marketing budget for the launch.” Along with weak sales, technical issues have started impacting Palm’s relationship with carriers, Misek said.

Another analyst, Ehud Gelblum of Morgan Stanley, said Tuesday he believes Palm’s only hope is to close its manufacturing and license the webOS. However, others see Palm as a ripe target for acquisition, notably either Google or Apple.

“Palm may not have a big revenue stream. It may not have bright possibilities. But it has over 400 patents in the mobile and handset spaces that would likely come in handy should a company find itself targeted in a suit by Apple,” BNET’s Erik Sherman writes. Apple has said Palm could be on its short list of companies likely sued for patent infringement claims. Although Palm would unlikely be able to finance a defense, “Google could buy a law firm and not even notice the drop in its bank account,” Sherman said. Apple could also buy Palm to deny Google that legal cushion.

We’ve seen this bit of legal maneuvering in past confrontations between Apple and Google. Late last year, Apple acquired Lala, a streaming music service some saw as a strategic buy to thwart Google’s move into digital music. On the heals of that showdown, Apple bought Quatro, the rival to mobile ad firm AdMob, which Google acquired while the Cupertino, Calif. company was in the midst of negotiations.

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About the author

Ed Sutherland

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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  • Scott

    If apple bought palm, they could re-acquire a lot of former Apple employees that palm poached away following the release of the iPhone… Kinda ironic, no?

  • One More Comment

    Yes, so they can fire them, and they’ll go to Google.

  • Bob Forsberg

    The top mobile device company should buy a failing mobile device company……why? Sounds like something Obama would do.

  • Vincent

    IMHO: It would be nice if Apple bought Palm and made a more rugged Palm Pre, and learned to make a multi-tasking iPhone in a Palm Pre form factor…

  • http://www.kazzmedia.com Kevin Cassidy

    Vincent, there already is a multi-tasking iPhone … it’s called the iPhone.

  • Bill

    “Vincent, there already is a multi-tasking iPhone … it’s called the iPhone.”

    No, it’s not. At least not in the ways that matter. But I think Bob’s point is valid: why buy Palm? The negatives would far outweigh the positives.

  • jorge

    No, Apple should not buy Palm, just let it fade away..
    Apple should buy AMD…

  • http://www.GregMills.info Greg Mills

    With a market cap of $900,000,000 the issued 320 Palm patents would cost $3 Million each. There is also the cost of maintenance fees and scads of attorney time to evaluate the patents. While there might be some employees that would not be fired on the spot, buying Palm would be sort of like having a blue wale deposited on your front yard…. what the heck do you do with it before it begins to stink? Google needs Palm more than Apple does. Perhaps Sprint will buy them so they can go broke together….

  • Michael K

    No. Why purchase mediocrity? What benefit does buying Palm bring to Apple? Not just no… H-no.

  • http://www.toxicspark.com Andrew Macdonald

    if Apple were to buy Palm, i doubt they would continue creating the Palm handsets etc.

    My feeling is that if a company like Google or Apple were to buy Palm, it would be solely for the patents and good talent that Palm has.

  • firesign3000

    For the love of everything good, hell no. Palm needs to just fade away.

  • williamh

    Other than some bitter ex-employees and a failing product, I don’t see much else of value.

  • CaryMG

    Why the FUCK would Apple do such a Godawfully stupid thing right smack in the middle of a heretofore unprecedented business roll ?

    Oh that’s right ….
    It’s a slow day Apple news-wise, so this is a way to agitate people & get a response.

  • Tim Ardan

    Maybe Palm could sell a few handsets if they put out a working demo for people to try. I’ve been looking for months and haven’t seen one.

  • simo

    Not to be too nit picky here, but that should be dire “straits” not “straights”.
    Just sayin’…

  • Troy

    “Vincent, there already is a multi-tasking iPhone … it’s called the iPhone.”

    “No, it’s not. At least not in the ways that matter. But I think Bob’s point is valid: why buy Palm? The negatives would far outweigh the positives.”

    Hmmm.. i wish people knew what they were talking about.

    the iPhone OS is Mac OS X, which is based on Unix. Everything about it is built on multitasking. All of the core functions multitask (web downloads, phone, music, etc, etc). The key difference is apple has chosen to not allow multiple 3rd party app to multitask. Why? well there a numerous good reasons.
    1) The core functions must be instantly available – a phone isn’t any good if when you go to make a call and it gives you a spinning cursor for 30 seconds like your desktop.
    2) Battery life will be negatively affected – there is a sweet spot for a handset: it must make it through a whole day without a recharge. Given current tech, battery density, and 3G power, it is hard to get a full day without dealing with backgrounding applications.
    3) it has a small screen, how are you really going to multitask anyways?
    4) There are only a few types of applications that really need background threads – most notably internet radio – which can be solved by a apple solution.

  • Sean Peters

    shorter Troy: blah blah blah… blah blah apple has chosen to not allow multiple 3rd party app to multitask blah blah blah
    1) blah blah
    2) blah blah blah
    etc.

    Dude, it really doesn’t matter if the underlying OS is capable of multi-tasking, if Apple has disabled the functionality for most applications. In practice, aside from the few built-in apps, you can’t multi-task. You would have been much better off to just stick with the argument that in practice, you don’t really need multi-tasking that much (which is true, with some glaring exceptions). But claiming that the iPhone really can multi-task is just dumb… Steve’s not allowing it to.

  • Bill T

    I think there is a time and place for multi-tasking and it would be foolish to presume that it won’t come to the iPhone, but not by way of Apple buying Palm. I’ll be sad to see Palm go, if it does. They made great products for a long time, but really let them get themselves burned by the iPhone.

    Conversely, Apple is slow to warm to functionality that other PDA and smartphones had for years: hardware keyboards and ebook readers, just to name a few. If Palm and Android go down, look for dumber and dumber smartphones.

  • http://www.definitivemind.com James Katt

    Apple should buy Palm for the patents on mobile technology it has.

    This way, if Apple can defend itself better in IP lawsuits by having more sledgehammer patents for the countersuit.

  • Plummer

    Apple has far better and SUCCESSFUL mobile technology right now. Palm on the other hand has only FAILURE written on it.

    Why should Apple buy out a failure company that has NOTHING superior to offer to Apple’s ecosystem?

    As for all those losers who left Apple (a few years ago) and are now at Palm, I wish them the worst. I wish that they will all get laid off and be jobless in the coming months, once Palm starts putting up the “going out of business” sign.

  • Dylan

    The only possible reason Apple would ever buy Palm is for the patent portfolio. Palm has enough patents right now to single-handedly destroy both Android and iPhone OS — but they don’t nearly have the funds. Palm has patents on things like a touchscreen dialer, conference calls, and ambient light sensing (sound familiar?) Whoever buys Palm will be basically immune to IP lawsuits, because the Palm Portfolio is just plain SCARY.