Palm is for sale--RIMM, Apple, and Google crush smart phone pioneer

04/12/2010 1:30 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Palm, a pioneer in what turned into the smart phone market, has hired Goldman Sachs and Qatalyst Partners to find a buyer, according to Bloomberg.

Leading candidates, Bloomberg reports, are Taiwan’s HTC and China’s Lenovo Group (LNVGY). Lenovo recently repurchased its former mobile phone business from the group of former employees who had bought the unit in 2008 when Lenovo decided to concentrate on computers.

Palm shares were up 16.7% as of 12:30 ET this morning, April 12. Shares rose 32% last week on rumors of a takeover bid. The stock had been down 60% for 2010 before the recent moves.

Palm, No. 6 in the North American smart phone market in the fourth quarter of 2009, had bet a turnaround on its new Pre and Pixi smart phones based on its new WebOS operating software. But sales have been disappointing. Big price cuts by Verizon (VZ)—the price on the Pixi Plus went to $29.99 and on the Pre Plus to $49.99—haven’t ignited sales. Last month the company forecast that it would report less than $150 million in sales for the quarter ending in May 2010. Wall Street analysts had been predicting $300 million.

Other potential buyers include Nokia, (NOK), and China’s Huawei Technologies and ZTE. Dell (DELL) has indicated that it has no interest in buying Palm.

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