PalmSource - now an acquisition target?

Colin Dunstan · 05-24-2005, 07:52 AM

More PalmSource news today. The Deal is quoting Jamie Friedman, an analyst at Fulcrum Global Partners LLC, saying that the change in leadership is a signal that PalmSource could become an acquisition target any moment soon:

Quote:

"They lost a CFO in February, who was replaced by a better CFO, then they lost the head of sales in March, who was replaced by a better head of sales, and now you have the CEO leaving. It is a scenario where the company could get acquired.

According to her, potential buyers could be palmOne (feel how the wheel is turning?) and Blackberry-maker Research in Motion.

Update: Two related links both from C|net thanks to Laurens:
PalmSource may be in play
PalmOne spends $30 million to drop 'One'

Update 2: Just checked PalmSource stock price and it is +13% today!

hacker · 05-24-2005, 08:29 AM

Quote:

Originally Posted by Colin Dunstan

"They lost a CFO in February, who was replaced by a better CFO, then they lost the head of sales in March, who was replaced by a better head of sales, and now you have the CEO leaving. It is a scenario where the company could get acquired.

I don't get the logic here... they're replacing bad management with significantly better management, and somehow this means they're ripe for a buyout?

Your theory is bass ackwards...

Laurens · 05-24-2005, 10:33 AM

PalmOne spends $30 million to drop 'One' (CNET)

Alexander Turcic · 05-24-2005, 10:37 AM

Quote:

Originally Posted by Laurens

PalmOne spends $30 million to drop 'One' (CNET)

Do they really not have anything better to spend money on

Laurens · 05-24-2005, 10:38 AM

And more from CNET: PalmSource may be in play

Quote:

The most likely buyer could be PalmOne, the hardware unit of the company formerly known as Palm. "This has the hand of PalmOne behind it," Friedman said. "It seems mysterious that Nagel would have stepped down and left the board."

sUnShInE · 05-24-2005, 09:41 PM

So we're clear: They were Palm, then they decided to become 'PalmOne' and spent millions of dollars on promotion, press, new letterhead, and uniforms for the janitors... and now they're spending $30M to become Palm again.

Oh, sure, I get it.

Incidentally, from the Wash Post article:

Quote:

In another development with potentially major implications for both companies, PalmSource's new interim chief executive said Tuesday that he plans to move the company toward an open source system, possibly Linux.
...
"I can tell you several major players have already contacted me and what they tell me is this: They want an open alternative _ no closed, proprietary systems," McVeigh said Tuesday at a PalmSource conference in San Jose. "That's where we're going. We've already talked about the possibility of moving over to Linux."

McVeigh declined to disclose the names of the "major players."

I don't doubt that this is a RIM acquisition situation. All the better for consumers. Give me a phone that integrates Blackberry email push, Treo/Tungsten functionality, and you can actually (gasp) hear. I'm into it (famous last words?).

Bob Russell · 05-24-2005, 10:27 PM

I can give you a bit more info straight from the top.... Ed Colligan and Patrick McVeigh, the "top dogs" at PalmOne and PalmSource.

They were pretty closed about the process leading up to the agreement, but PalmSource got something out of it. Over the next years, they will be rebranded to some new name representing the platform they provide, and it will not be "Palm." They get lots of money, and that can go directly towards Cobalt on Linux where they have many things they want to accomplish. It really is their future, and there are apparently great hopes of enticing new licensees once they get there.

For one thing, phone manufacturers doing advanced things are finding they need a nice multitasking multithreaded environment. I suppose Cobalt already provides that, but probably even more so with Cobalt on Linux. That means they can choose Microsoft and hefty licensing fees, or... PalmOS. And I guess a few other proprietary players, but openness seems to be greatly desired.

At any rate, the point I'm trying to make is that their future licensees probably don't want to have strong Palm branding. They want their devices to not point to Palm, especially if PalmOne is a competitor.

On the other hand, the advantage is obvious for PalmOne. They have been limited in what they can do with the branding when they share it with PalmSource. If they decide in 10yrs to offer devices on another platform, they want people to look at Palm as the best mobile device maker, not the company that makes devices using PalmOS.

I think it's a win-win situation for everyone except those of us that are attached to the idea that the heart of Palm is really PalmOS, not the devices. But for the sake of the platform's success, I guess we just have to trust the leadership that it's best for all.

hacker · 05-24-2005, 11:24 PM

Quote:

Originally Posted by sUnShInE

So we're clear: They were Palm, then they decided to become 'PalmOne' and spent millions of dollars on promotion, press, new letterhead, and uniforms for the janitors... and now they're spending $30M to become Palm again.

Close.... They were USRobotics, then part of 3Com, then Palm... from there, they decided it was strategically smarter to break apart their software and hardware divisions apart, so there was no conflict of interest. It also allowed them to be able to sell PDA hardware running non-PalmOS software (which never really happened).

So it breaks down like this:

USRobotics -> 3Com -> (Hanspring splits off) -> Palm

software -> Palmsource
hardware -> palmOne/Handspring

And now that their vision is clear, full-on smartphone direction with Cobalt powered by Linux... there is no need to even think about PocketPC or non-PalmOS running on the same hardware.. so they merged back again.

Strategically, it makes perfect sense. I consider the Palmsource/palmOne split a mistake, as they tried to dip their toe into using Palm hardware to power non-PalmOS software.

All companies make at least one blunder.. this was probably theirs.

sUnShInE · 05-25-2005, 07:37 AM

Yea, I recall the good ol' 3Com days. I was trying to be whiny and dramatic about the fact that they're throwing money around.

Quote:

Originally posted by BobR
I think it's a win-win situation for everyone except those of us that are attached to the idea that the heart of Palm is really PalmOS, not the devices. But for the sake of the platform's success, I guess we just have to trust the leadership that it's best for all.

I heart the platform, not the brand. Sometimes you're at the mercy of things out of your control. From here we will either a point of great nostalgia for what was once ours or we will be flooded with great new products. I guess we'll see. I hope it's the latter.

TadW · 05-25-2005, 03:14 PM

I believe PalmOne on the one hand will lose some customers (guys who swell in nostalgia and still run Palm OS 3.0), but on the other hand will win back new fans -- especially those who have been constantly frustrated with Microsoft's inferious mobile OS.

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05-24-2005, 10:33 AM	#3
Laurens Jah Blessed Posts: 1,295 Karma: 1373 Join Date: Apr 2003 Location: The Netherlands Device: iPod Touch	PalmOne spends $30 million to drop 'One' (CNET)

05-24-2005, 10:27 PM	#7
Bob Russell Recovering Gadget Addict Posts: 5,381 Karma: 676161 Join Date: May 2004 Location: Pittsburgh, PA Device: iPad	I can give you a bit more info straight from the top.... Ed Colligan and Patrick McVeigh, the "top dogs" at PalmOne and PalmSource. They were pretty closed about the process leading up to the agreement, but PalmSource got something out of it. Over the next years, they will be rebranded to some new name representing the platform they provide, and it will not be "Palm." They get lots of money, and that can go directly towards Cobalt on Linux where they have many things they want to accomplish. It really is their future, and there are apparently great hopes of enticing new licensees once they get there. For one thing, phone manufacturers doing advanced things are finding they need a nice multitasking multithreaded environment. I suppose Cobalt already provides that, but probably even more so with Cobalt on Linux. That means they can choose Microsoft and hefty licensing fees, or... PalmOS. And I guess a few other proprietary players, but openness seems to be greatly desired. At any rate, the point I'm trying to make is that their future licensees probably don't want to have strong Palm branding. They want their devices to not point to Palm, especially if PalmOne is a competitor. On the other hand, the advantage is obvious for PalmOne. They have been limited in what they can do with the branding when they share it with PalmSource. If they decide in 10yrs to offer devices on another platform, they want people to look at Palm as the best mobile device maker, not the company that makes devices using PalmOS. I think it's a win-win situation for everyone except those of us that are attached to the idea that the heart of Palm is really PalmOS, not the devices. But for the sake of the platform's success, I guess we just have to trust the leadership that it's best for all.

05-25-2005, 03:14 PM	#10
TadW Uebermensch Posts: 2,583 Karma: 1094606 Join Date: Jul 2003 Location: Italy Device: Kindle	I believe PalmOne on the one hand will lose some customers (guys who swell in nostalgia and still run Palm OS 3.0), but on the other hand will win back new fans -- especially those who have been constantly frustrated with Microsoft's inferious mobile OS.

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