What Will Happen To Palm Inc And WebOS?

PalmWebOS-thumbWhat will happen to beleaguered Palm, Inc., maker of the webOS-based Pixi and Pre Plus phones? Does it have any hope of survival, or will rockstar Bono of U2 and his Elevation Partners buddies who put money into Palm lose it all?

Some Palm executives have already left, others have been paid to stay, including the CFO and the SVP of global operations. Radio Shack is ditching Palm Pre and Pixi phones, and Verizon has cut prices on them. In fact, reports are that many Radio Shack stores in large U.S. cities are no longer stocking the phones, and Sprint has removed these from their website.

The stock is down to around $5.20 per share. Is there any hope left for the company, or should they give up the ghost? Well, given that the share price was as low as about $4 just a few weeks ago, there might be some hope. Rumors abound about who might be in talks to buyout Palm, and they include Lenovo, Huawei and others. Given that Apple’s fiscal Q2 earnings are expected to hit nearly $2.50/share (on revenues of over $12B), based significantly on iPhone and Mac demand, maybe the best plan is to have a buyer who already makes computers and has a strong brand presence worldwide. Say for example, Lenovo or even Dell.

The problem is, Dell already has an Android cell phone, the Dell Aero. Lenovo sold off their cell phone unit but brought it back and now believes mobile Internet will be a big revenue generator. Maybe one of these companies would still be interested in adding Palm phones to their lineup, to give their computer customers a choice.

One other possibilty, based on more recent rumor, is that Palm webOS might be integrated into an Android wrapper. It would be a shame if this once-respected PDA maker goes down altogether, but even having Jonathon Rubinstein, former head of Apple’s iPhone division, has not helped the company, who have posted 11 straight quarterly losses. (Elevation Partners also has a former Apple managing director, Fred Anderson.) The jury is out on whether Bono, who seemingly joined Elevation Partners because it was named after a U2 song, will or will not make money if Palm, Inc., gets a buyer.

Any thoughts on what you think will happen to Palm? I can’t wait to see how many people show up in Sunnyvale this Friday and Saturday for Palm’s developer workshop event.