Palm May Sell This Week

Smartphone developer Palm may be sold to a competitor by the end of the week, according to an anonymous financial analyst speaking with Unstrung. The trade news site claims that investment firm Morgan Stanley is keen to have any one of four buyers close a deal by this Thursday -- including offers from Motorola and Nokia.

Motorola is particularly interested, according to the report, as a successful buyout would not only help to keep Nokia out of the US business market but would also help it compete against RIM, whose BlackBerry smartphones frequently dominate the workplace.

The move would also help out Microsoft for the phone industry in general, Unstrung's source adds. A potential Motorola acquisition of Palm would give Microsoft's Windows Mobile OS a consolidated, Windows-only phone designer that would better compete against other phone makers, particularly newcomer Apple and its iPhone.

"If [Motorola] own[s] Palm," the source said, "all of a sudden Motorola becomes Microsoft's best hope for competing against RIM and Apple."

Despite its near-total domination of the computer OS market, Microsoft has consistently struggled to gain the upper hand in mobile phone software. The majority of smartphones use the open Symbian platform, including Motorola's buyout rival Nokia, or else use a proprietary system such as Palm's own Treo 700p.

The use of a mobile version of Mac OS X for the iPhone puts pressure on Microsoft to consolidate its efforts, which are currently distributed between Motorola, Palm, and numerous smaller designers such as HTC and i-mate.

By Electronista Staff