Nokia Buy Palm? Riiiiight.

Published on November 13, 2009
by John Paczkowski

nokpalmPalm shares are trading higher today, bolstered by anticipation of the Nov. 15 launch of the Pixi, the company’s second webOS handset and by some silly rumors about a potential takeover by Nokia (NOK). Does the company really need another software platform to add to Symbian, Maemo and Qt? C’mon.

At $12.34, Palm (PALM) is up well over seven percent as I write this, a nice gain that more than offset the four percent drop the company’s shares suffered last week. Clearly, the market is expecting a lot of the Pixi, and according to some analysts, it may get it. In a note to clients Friday, RBC analysts said they “expect positive consumer reception and healthy sell-through,” for the Pixi.

But not everyone agrees with RBC’s cheery assessment. Ashok Kumar, an analyst at Northeast Securities, has a much dimmer view of Palm’s prospects in the months ahead. He says his sell-through checks show a “substantial decline” in recent Pre sales.

“As a fading brand, carriers are likely to see better returns on their promotional and advertising dollars with other vendors,” Kumar writes. “WebOS has negligible smartphone OS share, 0.2 percent per Gartner estimates, and is unlikely to attract any meaningful third-party application support. Palm has bet the farm on webOS and there is a real possibility that they may not achieve critical mass.”

Perhaps. Perhaps not. We’ll see in the months ahead.

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