& cplSiteName &

Palm Thursday: No Deal Yet

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
3/22/2007
50%
50%

Market expectations of a quick sale of Palm Inc. faded today and the mood quickly shifted. Thursday night, Motorola Inc. (NYSE: MOT) -- considered by some to be a front-runner for the PDA pioneer -- warned that handset woes will continue to pull down its earnings. This evening, Palm released numbers that missed analyst estimates.

Several sources, however, continue to say Palm's banker Morgan Stanley is trying to seal a deal, whether it be a private equity buyout or a vendor buyout. Others are now naturally more cynical about a sell-off of the Treo-maker. (See Palm Deal in the Final Stretch, Palm's in Play , and Palm Action Heats Up .)

"Something is in the works, it is just a matter of time," says one Wall Street source, citing information from advisory sources and shareholders. Motorola and Nokia Corp. (NYSE: NOK), along with private equity firms Silver Lake Partners and TPG Inc. have all been named as possible buyers. Another source says that Dell Inc. (Nasdaq: DELL) is now creeping more aggressively into the picture.

"If it doesn't happen today, it will happen soon," agrees Carmi Levy, analyst at Info-Tech Research Group . "Palm just can't go it alone anymore."

Palm's CEO, Ed Colligan refused to comment on the takeover talk on the company's earnings call Thursday afternoon, as he was pressed with aggressive questions on the topic. "It’s our practice not to comment on rumor and speculation," he said. "We're 100 percent focused on running the business."

Yup, heard that one before.

The Wall Street source named Nokia as the vendor that would pay the most for Palm. A private equity source, however, tells Unstrung he heard that a Palm deal was "nipped in the bud" by Nokia's head of multimedia, Anssi Vanjoki, who is tipped to be the company's next CEO by some observers.

Nokia has so far refused to comment on what it describes as "rumor and speculation."

The Finish phone giant, however, isn't the only vendor looking at Palm's prospects. Dell has been snooping around, a couple of separate sources tell Unstrung.

Dell also said that it wouldn't comment on "rumor and speculation."

Motorola avoided the question of whether it was talking to Palm on a Wednesday conference call. The company's CEO Ed Zander was directly asked about Palm but didn't answer, referencing instead a "family matter" that will prevent him from attending his scheduled CTIA keynote. Analysts and sources, however, cautioned against reading too much into Motorola's silence.

"My sense is that it will still be a private equity buyout," says the Wall Street source, noting that this is management's preferred option allowing them to keep control. It would, however, likely net a lower valuation than a vendor buyout; with other sources questioning if a PE firm would buy into a single technology company such as Palm.

If Morgan Stanley cannot secure a deal for Palm, Info-Tech's Levy reckons that the gadget maker's prospects will get worse in a market plagued by decreasing margins and dominated by larger competitors, such as Motorola, Nokia, and BlackBerry . "It would be better for everyone if Palm was bought as a going concern," he says.

"Otherwise, their option is to break up the company and shop the technology, selling the individual parts, which is not optimal for the Palm community."

Palm reported its third quarter results for its 2007 fiscal year after the bell on Thursday. The Sunnyvale, Calif.-based company reported earnings of $11.8 million, or 11 cents per share, compared to earnings of $29.9 million, or 28 cents a share, for the same period last year. Excluding certain costs such as stock-based compensation and development charges, the company earned 16 cents per share, short of the expected profit of 12 cents per share, according to Reuters.

The results from the previous year included a a tax-related gain. Revenue grew more than 5 percent to $410.5 million for the period. The firm said that its Treo smartphone revenue went up 25 percent for the quarter, compared to the previous year.

— Dan Jones, Site Editor, Unstrung

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP’s Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
LRTV Custom TV
Cable & the Move to IPTV

5|31|16   |   04:44   |   (0) comments


Cable operators are looking at transitioning operations to IPTV, and some have already started. What issues do operators face? What opportunities will this bring to customers? These are just a few of the questions Alticast considers in this interview between Alan Breznick and Susan Crouse at INTX 2016.
LRTV Custom TV
Ooredoo at UBBS 2016

5|31|16   |   06:04   |   (0) comments


At UBBS 2016 in Dubai, Light Reading is joined by Ooredoo Qatar's Yann Courqueux for an in-depth interview on their success.
LRTV Custom TV
du's Success Infrastructure

5|31|16   |   11:48   |   (0) comments


At UBBS 2016 in Dubai, Light Reading is joined by du's Jasim Alawadi for an in-depth interview on deploying all types of technology.
LRTV Custom TV
What Is Customer Experience Management?

5|31|16   |   05:53   |   (0) comments


At UBBS 2016 in Dubai, Light Reading is joined by Huawei's Michael Spratt for an in-depth interview on customer experience management.
LRTV Custom TV
UBBS 2016 World Tour Highlight

5|31|16   |   02:43   |   (0) comments


At UBBS World Tour 2016 in Dubai, Light Reading takes an exclusive look at the latest Huawei technology and the future of broadband.
LRTV Interviews
Getting Somewhere With TV Everywhere

5|31|16   |   7:08   |   (0) comments


Comcast's Vito Forlenza describes the progress his company is making with TV Everywhere and the challenges that remain.
LRTV Custom TV
Cisco's Innovations in Cable

5|26|16   |   03:18   |   (0) comments


Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for ...
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
Cisco's Patel Hails 'Microculture' Successes
Iain Morris, News Editor, 5/26/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
AT&T's Margaret Chiosi Retires
Ray Le Maistre, Editor-in-chief, 5/25/2016
CenturyLink Targets 'Six Nines' Reliability
Iain Morris, News Editor, 5/31/2016
West Coast Gets Its First 10-Gig City
Mari Silbey, Senior Editor, Cable/Video, 5/26/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Please Pass the Waterproof Phone Click Here
Walruses: more tech-savvy than you might think.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.