Report: Palm discussing strategic options with bankers

IDG News Service |  Mobile & Wireless

Smartphone maker Palm Inc. is consulting with investment bankers on its strategic options, including the prospect of selling the company, seeking investment from venture capitalists, or making an acquisition of its own, according to a report in the The Wall Street Journal.

Beset with growing competition in the smartphone market, Palm is discussing a range of options with bankers at Morgan Stanley, the newspaper reported, citing unnamed sources familiar with the discussions. Widespread speculation that Palm is likely to be acquired by another company sent the company's shares higher last week, rising nearly 13 percent during the week to close at US$18.30 last Friday.

A Palm spokeswoman in Singapore could not immediately be reached for comment on the report.

Palm, which sells the popular Treo smartphone, has a loyal customer base but the company faces increasingly tough competition from a range of competitors, such as BlackBerry-maker Research In Motion Ltd. (RIM) and Taiwan's High Tech Computer Corp. (HTC), the world's largest maker of Windows Mobile handsets. HTC sells some of those handsets under its own brands, but most are made under contract for handset vendors and operators, which sell them under their own brands -- often competing head-to-head against the Treo.

Analysts last week said a private sale could help Palm, shielding the company from quarterly scrutiny of its numbers and freeing up the company's management to make acquisitions necessary to boost the technology used in its smartphones.

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