Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



palmOne's Nokia "Nightmare"

Tough crowd. Yesterday, shares of palmOne (Nasdaq: PLMO  ) fell nearly 11% on extraordinarily high volume -- and on little publicly available news beyond some apparent speculation contained in an A.G. Edwards analyst report. It said mobile phone giant Nokia (NYSE: NOK  ) might be preparing a handheld device to compete with palmOne's Treo 600 handheld phone, planner, Web interface, camera, electric food dehydrator, and beef jerky maker. (Well, maybe someday.)

I guess I can understand why investors would take note of such "news." (I put "news" in quotes because, as CBS MarketWatch pointed out, there isn't any confirmation from Nokia or other explanation from palmOne about its move yesterday.) The Treo 600 is well-received in its market. In fact, some consider it the top choice among high-end handhelds. Nokia, meanwhile, makes some very well-regarded, high-performance phones, and it could certainly be seen as a threat as it battles for market share.

But is the mere concept that palmOne might face stiffer competition really worth a one-day drop in market value clocked at nearly $120 million? That's a tough sell. Speaking broadly, the handheld sector is already one of the most competitive around. Just ask Sony (NYSE: SNE  ) , which this summer said it would remove its well-liked Clie from the U.S. market. (Clie wasn't a so-called "smart phone" -- Sony's Ericsson (Nasdaq: ERICY  ) products fit that bill.)

So wherever you look, there's a Research in Motion (Nasdaq: RIMM  ) , Dell (NYSE: DELL  ) , or other player waiting like a predatory bird. Continued competition, particularly in multifunction smart phones, is inevitable, so where's the surprise coming from? That's the rub. It's difficult for investors to know where to look for long-term winners in this case. Consider the huge pop we saw back in June when palmOne released impressive quarterly financial results.

As yesterday illustrates, every move -- or, in this case, word -- is watched by investors with hawklike intensity. That puts investors in a difficult spot.

Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 501398, ~/Articles/ArticleHandler.aspx, 10/22/2016 2:17:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 17 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
BBRY $7.37 Down -0.11 -1.47%
BlackBerry CAPS Rating: *
NOK $4.92 Down -0.08 -1.60%
Nokia CAPS Rating: **
SNE $32.11 Down -0.61 -1.86%
Sony CAPS Rating: ***