By Jon Fortt
March 20, 2007

Unstrung is reporting that the sale of Palm (PALM) could come as soon as Thursday, when the device maker is due to report earnings. The list of potential buyers is said to include private equity firms Texas Pacific Group and Silver Lake Partners, and phone makers Nokia (NOK) and Motorola (MOT). Morgan Stanley has been working with Palm to explore options. (Palm shares are up nearly 5 percent on the rumor.)

Why all the excitement over Palm?

First of all, it’s seen as a great value. Its market cap is under $2 billion, while revenues for 2006 came in over $1.5 billion. It’s got an established brand in the smartphone space and now it has the freedom to build on top of the old Palm OS.

Second, the smartphone space is heating up. The buzz around Research in Motion’s (RIMM) BlackBerry Pearl and Apple (AAPL) iPhone are showing that the broader public is interested in smartphones now – they’re not just executive toys.

Third, with low-margin feature phones getting more commoditized by the day, every handset maker craves a high-end play. Carriers like smartphones too – it will take more than a RAZR to run the data services they know are their future.

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