Analyst: Palm May Be Acquired in the Next Two Years
Palm’s got potential–M&A potential.
That’s the word from Deutsche Bank analyst Jonathan Goldberg, who believes there’s a good chance the company will be acquired in the next two years.
In a note to clients this week, Goldberg argues that Palm (PALM), with its new Verizon (VZ) distribution deal in hand and nearly nearly 1,300 webOS applications in its App Catalog, is building the sort of market momentum that would be attractive to a larger company looking to break into the mobile device market–or shake it up.
“Big consumer electronics companies need some way to participate in the market and most of them have failed to come up with a successful strategy,” Goldberg writes. “Street consensus appears to be that Palm will be acquired in the next year or two, which given the current environment we think could be a reasonable possibility.”
But to make it a reality, Palm must first demonstrate its viability. “We think Palm needs to prove it can be a stand-alone entity, a viable business in its own right. We clearly think that it can.”
Clearly. Goldberg believes Palm will likely sell 600 thousand webOS devices through Verizon this quarter, and he says that Palm’s App Catalog, whose applications already outnumber those in Nokia (NOK) and Microsoft (MSFT) stores, will soon exceed those available in RIM’s (RIMM) App World and possibly the Android Market as well. That would certainly be enough to elicit an acquisitive glance from a company with mobile ambitions. Just who that would be, however, Goldberg doesn’t speculate about.