Palm Is Up For Sale, HTC And Lenovo Consider Making Bids

Talk about a change of plans. Over the weekend, we heard that Palm's boss (Jon Rubinstein) was confident that he could get things turned around. The company has had trouble lately keeping their stock price afloat, and they've also had trouble moving their two webOS phones, the Pixi and Pre (along with the Pre Plus and Pixi Plus on Verizon Wireless). And while he may be firmly committed to Palm's future success, it seems that the success may lie in the hands of another parent.

According to a breaking report from Bloomberg, Palm has officially put themselves "up for sale and is seeking bids for the company as early as this week." The report stemmed from quotes from three undisclosed persons familiar with the matter, and while this obviously must be regarded as rumor for now, it's not like Bloomberg to put out a report it doesn't firmly believe is true.

Reportedly, Palm is working with Goldman Sachs and Qatalyst Partners to find a buyer. That's a pretty typical move for a company of this magnitude, and the report also mentioned that both HTC and Lenovo have "looked at the company and may be potential bidders." Dell, however, decided to pass. All of these situations are interesting in their own right. HTC has been burning things up in America and around the globe; just three years ago, no one knew who HTC was, and today, it's a household name. HTC seems to be doing just fine on their own. Google's Nexus One was designed and built by HTC, and most of the popular Android phones today have an HTC label on them. Why would HTC show interest? It seems that HTC may be interested in something Palm owns, which is presumably something other than hardware. Palm owns a lot of intellectual property, and HTC has already shown that they have a thing for software with the introduction of the Sense overlay that coats Android and Windows Mobile. The one thing that HTC really lacks is their own software platform. Today, HTC simply makes hardware for software companies to invade; HTC builds a phone, Google/Microsoft loads on the OS, and a final product is born. What if HTC didn't have to rely on those software makers to create those final products? What if HTC sold the total package? What if Palm webOS became HTC webOS? You can probably see how attractive that might sound to a company already established in the industry, and if the company finally feels that their time is now to break free, a sizable bid just might float out.

Now, about Lenovo. To most Americans, this probably comes as a surprise. Believe it or not, Lenovo isn't a newcomer to the smartphone industry. Over in China, Lenovo's OPhone is already out, and it's a pretty nice looking handset. But again, Lenovo is in the same position as HTC when it comes to software. The company currently uses Android, so they obviously have to rely on someone else before popping out a final product. Any company worth their salt would love to do everything in-house if it made financial sense, and if Lenovo had access to webOS, there's a better than average chance that the company could launch immediately into the U.S. market and compete with Apple, HTC, LG, Samsung, Dell and everyone else.

Speaking of Dell, why would they pass up the offer? There have been reports in the past that U.S. carriers saw Dell's first phone prototypes as vanilla, and while the Mini 3 (now known as the Aero) looks pretty good, it's using a highly modified version of Android that has tracks of AT&T all over it. But Dell has never been a software company; they've made themselves giants by selling custom hardware configurations using operating systems built by someone else. Dell isn't exactly in the same position as those other guys, but we still say there's a missed opportunity here. As "fine" as the Aero is, it's no Pre Plus. Though, it's possible that Dell has already invested so much money on in-house designers, that bringing on more designers from another company would simply be counter-productive.

It's hard to know exactly why each of these companies is or isn't bidding, but one thing is for sure: the smartphone industry as a whole could see a serious shake-up if a mainstay like Lenovo or HTC gets ahold of Palm's assets. In fact, we'd wager to say that Apple would have a whole new problem on their hands in shaking the competition if giants like Palm and HTC ran together as one. It seemed like a pipe dream just a few months ago, but now it's looking all the more possible. Could the HTC HD3 have webOS on it? One can only hope.