Report: HTC out of the running to buy Palm, Lenovo leading candidate?

According to a report from Reuters, HTC is no longer in the running to buyout Palm, this comes from “a source with direct knowledge of the situation after reviewing Palm’s books“. The source went on to say, “there just weren’t enough synergies to take the deal forward”. Dreams of an HTC EVO 4G with webOS have been dashed and now Lenovo has emerged as the  leading candidate. Lu Chialin, an analyst for Macquarie Securities in Tapaei believes “a suitable candidate will be a mainland Chinese company“. Chialin cites free cash and the lack of a brand presence in the US are contributing factors. Lenovo is currently the world’s 4th largest PC maker.

Not all analysts are bullish when it comes to Palm being a good match for Lenovo.

“It’s not a good idea for Lenovo to buy Palm right now,” said Vincent Chen, an analyst at Yuanta Securities. “If it does, it’s got to be prepared to take on some of Palm’s losses and may have to see at least a few more quarters of losses from them.”

HTC is not the only company to take a pass. Huawei were also rumored to be interested and also declined to put in a bid.

Palm considers raising capital, licensing webOS

In an addendum to the earlier story that Palm had started to look for potential suitors to purchase the company, Reuters reports the company is looking at other options. These include raising much needed capital and perhaps licensing webOS. Goldman and Qatalyst appear to be looking at all three options. It was just a few weeks ago that Palm indicated it’s plans were to go it alone and that bad timing was to blame for sales shortfalls. Rubinstein reasoned that the Palm Pre Plus poor sales numbers were due to bad timing.

“I’m bummed out too, by things like not taking off at Verizon.  One of the analysts on our earnings call asked if we had launched when Droid launched, and Droid launched when [we] launched at Verizon, would the story have been opposite?  I said I think we have a better product than Droid, and customers would have been happier with it.”

Right now, many are blaming Palm’s misfortunes on hardware, which has specifications in line with Apple’s iPhone 3GS. Form factor? Perhaps, but Palm hasn’t seemed interested in creating a slab phone with a soft-touch keyboard. Touchscreen phones with QWERTY keyboards was going to be their niche. Not to mention, it’s certainly no easy task to create a great on-screen keyboard.Putting webOS on an HTC EVO is not going to miraculously fix what ails Palm. Palm’s webOS, while certainly one of the more elegant operating systems, is far from perfect. One could argue that the huge number of third party patches proves out that point. At last check, there were over 300 patches for the webOS devices. Despite great hardware, it doesn’t feel as fast as competing phones. Is that  a problem solved by throwing more hardware specs or doing some serious optimization of the OS. The overclocking patch was wildly popular, but also generated a warning from Palm that it wasn’t recommended. What’s needed is speed without the fear that your device might burst into flames. (Note: It’s never happened, but it would be nice to get a speed increase without fear of negatively impacting your phone)

Regardless of what happens, for Palm devices to be successful, those in control need to focus on improving hardware and software fronts. Marketing has been a convenient fall guy for Palm, but devices help sell devices. Don’t blame it all on creepy Palm girl. In the end, the best device should win out. Depending on which road the company chooses, let’s just hope Palm stays in the game.

via PreCentral