Rumors are flying about the possible acquisition of Palm, Inc. by Nokia, Corp. With the Treo brand doing well, the rumors baffle some analysts, while others say the deal makes sense.
Why would Palm need to be acquired when they are profitable and increasing sales? The company has faced stiff competition lately and has stumbled, selling fewer devices than analysts expected in recent quarters.
Rumors were swirling about a possible acquisition by Motorola, but those rumors died down. Now there are new reports of interest by Nokia.
Nokia has been a company focused on its own Symbian operating system and has insisted it was better than the competition. They have not been able to crack the high end cell phone market in the US, however. Buying Palm could give them the leverage they need in the US, but they'd be acquiring a company built on their competition -- the Palm OS and Microsoft Windows Mobile.
Casey Ryan of Nollenberger Capital Partners in San Francisco said "a private buyout would make more sense. Palm is a basically sound company in a growing industry and could appreciate strongly over the next few years."
It remains to be seen if Nokia will take the plunge but it is sure to be an interesting ride.
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