RIM to buy Palm?

Ok, this is just a rumor and should be treated as totally unconfirmed speculation, but BargainPDA is reporting that RIM mulling over a buyout of Palm. Why? Well, apparently RIM wants a backup biz in case they have to stop selling their line of BlackBerry handhelds here in the US (they're embroiled in a long-running patent lawsuit with NTP, which claims that the BlackBerry's email tech infringes on several of their patents). And if things should happen to go RIM's way in the suit, then they could always add BlackBerry support to upcoming Treos, something that's been just-around-the-corner for months now anyway. Whether RIM could make an offer that Palm and its shareholders would accept is another matter, but let's not kid ourselves that it's starting look more and more like Palm's glory days are behind it — it might just be the right time for them to sell.

[AlphaGeek @ Dec 19th 2005 12:20AM]

Adding Blackberry support to Treos would be pointless as a defense against NTP's patent enforcement. It's not the device that infringes, it's the system of operations (i.e. the Blackberry service) that NTP objects to.

[Peter Rojas @ Dec 19th 2005 12:20AM]

AlphaGeek,

Could you please reread what I wrote: "And if things should happen to go RIM�s way in the suit, then they could always add BlackBerry support to upcoming Treos." That's only if they are able to sort out their legal problems.

[Dan @ Dec 19th 2005 12:20AM]

dang, peter rojas just stepped up and told you what to do! haha, that's awesome. peter, still working on podcast 50 - the maven was pretty good.

[weeble @ Dec 19th 2005 12:20AM]

Seems like more then a rumour

Palm just officially announced Blackberry Connect for Treos in 2006..

http://www.palm.com/us/enterprise/products/blackberry_connect.html

[motech @ Dec 19th 2005 12:20AM]

why dont you both check this out:
http://www.palm.com/us/enterprise/products/blackberry_connect.html?cid=treo_20051108

[TZK @ Dec 19th 2005 12:20AM]

Makes sense in a lot of ways. They could both benefit, since they have both lost market share with Windows mobile.

[Scott @ Dec 19th 2005 12:20AM]

blackberrys are cool

[Homer J @ Dec 19th 2005 12:20AM]

As someone who works in M&A, I believe this has must have been mulled over by top-level management in top strategy sessions. Their acting on it, is another story entirely - though on a Lehman scale, the I-bankers must be licking their finger!!!! Wish I was in on this deal....

I dont know much about the patents behind MSFT and Palm's email technology, but NTP so far seems to have left them alone - so I make the assumption the technolgoy works differently.

Buying Palm therefore serves as both a consolidation play, as well as a defensive move becuase when it comes right down to it, the user does not care how email lands in their pocket they just want it to work - the system brand therefore makes "zero" difference to most users.

[Scott @ Dec 19th 2005 12:20AM]

blackberrys are cool

[Craig @ Dec 19th 2005 12:20AM]

Palm's "glory days are behind them?" That's an odd statement, especially looking at their stock price (significantly up from lows in both '03 and '04). I mean, if you compare how nearly any IT-based company is doing compared to, say, 1999, you could argue that its "glory days" were behind it, but I don't think that'd be true for most companies with highly desirable products out on the market right now. And given Palm's diversifying product lines, I think their future looks pretty bright. People have been saying "it's over for Palm" since at least 2000 -- at some point, they may be correct, but the little kid who cried wolf one too many time lost a lot of credibility before he was proven right.

[KC @ Dec 19th 2005 12:20AM]

This would be a great aquasition for RIM irrelavent of their leagal troubles...

RIM could maintain its focus on Corporate and Government with Blackberry and at the same time use Palm to satisfy the pressure from the masses to include the things that the corporate and government "bread and butter" customers loathe such as built in camera...

A two brand approach allowing them to target broader markets without weakening the Blackberry brand could work very well for RIM and allow them to truly become the Global leader in the Smart Phone market.

I hope this is more then just a rumour!

[Steve @ Dec 19th 2005 12:20AM]

When people say stuff like this, they really mean "The glory days of Palm OS are behind us". Palm themselves, as has been pointed out, seem to be reinventing themselves fairly successully.

Steve Litchfield

[Michael @ Dec 19th 2005 12:20AM]

Hey guys calm down. I have no idea whether this is a real deal or not but I can see several things that would cause most Boards to seriously look at the possibiltiy:

From RIM's persepctive:

(1) They have a huge business built on disputed patents and could use multiple contingency plans.
(2) a deal would remove a major competitor and
(3) They have to be worried that one day Microsoft will get their act together - it would help to have a foot in the hardware world if that happens.

From Palm's standpoint: The Treo currently rules the smartphone world but every manufacturer you can imagine is working on a Treo-killer. An infusion of capital and the very lucrative client base that RIM maintains would help stave off those competitors.

Cost is a major issue but remember that RIM had a tentative settlement of the patent issues for something like $450 million - and that didn't get them any new technology, personnel, revenue, clients or business.

[Joshua Ochs @ Dec 19th 2005 12:20AM]

I seem to recall Tivo being on a deathwatch. And Apple used to be "beleaguered". They seem to be doing fine.

Not to say Palm isn't in a difficult position, having lost PalmSource (never should have been spun off in the first place), but they're far from out. Really, what they lack is any control over their destiny with the loss of PalmSource, which is exactly why they're covering their bases with Windows Mobile.

They have a decent product portfolio that makes sense (even if their naming convention doesn't: consumer-low: Zire, consumer-high: LifeDrive, pro-low: Tungsten-E, pro-high: Tungsten, phones: Treo), sales are good (especially on the Treo), and management seems pragmatic, if not inspiring.

Does it give me warm fuzzies about Palm? No, but I sure wouldn't count them out.

[Dustin Hood @ Dec 19th 2005 12:20AM]

What Model Blackberry is that pictured?

[Peter Rojas @ Dec 19th 2005 12:20AM]

Damn, you Palm fanboys are a touchy group -- and I say this as a fellow Palm fan and long-time Treo user. First things first: I never said they were going out of business or not doing ok -- if they weren't at least a viable business then there'd be no reason for RIM to acquire them -- but there is no denying that their glory days as a brand (note that I said "brand" here) are behind them. Palm will NEVER dominate or define the world of handhelds like they did five or eight years ago. That moment has passed and they will never, ever be as important a part of the market as they were. There is simply too much competition now from other players, and they are also now competing in the world of cellphones and smartphones, where, like it or not, they are not much more than a bit player compared to the likes of Motorola, Nokia, Samsung, HTC, etc.

Unfortunately, there are a few commenters who can't seem to have a reasonable discussion about this, so I'm closing comments.