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



This Is the Company That Should Buy Palm

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Nokia (NYSE: NOK  ) to buy Palm (Nasdaq: PALM  ) ? Sorry, I'm not buying it -- and not just because Nokia has already committed billions to its Symbian mobile operating system.

Here's why I'm bearish on this so-called deal: Smartphone success here in the U.S. for Apple (Nasdaq: AAPL  ) and Research In Motion (Nasdaq: RIMM  ) won't necessarily translate into success worldwide, and Nokia is far and away the mobile market leader outside of North America.

In India, for example, Nokia controls more than 60% of the handset market.

And even in areas where Nokia is weak, adding Palm's Pre to its portfolio wouldn't likely be of much help. Take South Korea. Yesterday, regulators cleared the way for the iPhone to be sold there, but the region's top telco -- SK Telecom (NYSE: SKM  ) -- says it will wait and see how the device sells before committing to it. Samsung and LG are the peninsula's hometown handset heroes. Nokia, like Apple, is a new player.

Nor has either company has seen much success in Japan. Palm would be a great buy for Nokia if it could somehow amplify its chances of breaking through barriers in Asia. I just don't see how it would. But I see synergies aplenty between Palm and Microsoft (Nasdaq: MSFT  ) . Here's why:

1. There's an existing relationship
Palm has sold Windows Mobile smartphones for years, so it knows how to work with Mr. Softy. And the partnership has bred success. According to a recent survey of corporate IT managers, 57% of respondents said their users wanted further support for the Windows Mobile smartphones they're bringing to work. Only the iPhone ranked higher.

Surely some of those users are carrying Motorola (NYSE: MOT  ) handsets, but it's a good bet that just as many are using Windows Mobile Treos from Palm.

2. Mr. Softy prefers partners
Microsoft doesn't like to go it alone in the mobile market, as its recent partnership with Nokia demonstrates. We also know that Mr. Softy is looking beyond its walls for help in creating new Windows Mobile software, and has plans for an entirely new smartphone platform code-named Pink.

When you're already reinventing the wheel, and you have a history of working with partners, it often makes sense to acquire assets. Palm's Pre could look good in Pink.

3. Mall rats like smartphones
Finally, let's talk retail. Say what you will about Microsoft's store strategy -- there's plenty of room for criticism -- but if Mr. Softy keeps its promise to go after mall rats, adding a sexy, affordable smartphone to its product line-up could aid sales.

Nokia would see no such benefit from working with Palm. Heck, Palm may even be best off on its own. But if there's going to be a suitor -- and Mr. Market seems determined to keep us talking about one -- let's at least consider a deal that makes sense. MicroPalm would.

Get your clicks with related Foolishness:

Apple is a Stock Advisor selection. Microsoft and Nokia are Inside Value picks. SK Telecom is a Global Gains recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Nokia at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is calling. Hello? Are you there?

Read/Post Comments (1) | Recommend This Article (2)

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.

  • Report this Comment On September 26, 2009, at 7:40 PM, greenwave3 wrote:

    Interesting. I think Microsoft and Palm are both failures in their own rights, but the combination may make sense.

Add your comment.

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: 991969, ~/Articles/ArticleHandler.aspx, 10/22/2016 6:09:05 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 20 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

6/30/2010 4:00 PM
PALM.DL2 $5.69 Down +0.00 +0.00%
Palm CAPS Rating: *
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
BBRY $7.37 Down -0.11 -1.47%
BlackBerry CAPS Rating: *
MSFT $59.66 Up +2.41 +4.21%
Microsoft CAPS Rating: ****
MSI $73.62 Up +0.05 +0.07%
Motorola Solutions CAPS Rating: ***
NOK $4.92 Down -0.08 -1.60%
Nokia CAPS Rating: **
SKM $21.80 Down -0.03 -0.14%
SK Telecom CAPS Rating: **