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Palm Changing Hands

Posted on Tuesday, Mar 20th 2007

Looks like Palm will change hands this week. The bidders are the usual suspects: Nokia and Motorola on the vendor side, and TPG and Silverlake on the Private Equity side. I was suprised that Dell isn’t bidding, and did some digging to see what’s going on, and found this:

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Here’s why, according to one insider familiar with the thinking: Ron Garriques, the former Motorola Executive VP of the handset business who had been opposed to the deal, left Motorola and is now at Dell Inc. (Nasdaq: DELL – message board). Motorola CEO and Chairman Ed Zander is currently running the day-to-day of Motorola’s handset business.

Zander has said that Motorola needs to get out of its low-end price war with Nokia and others and introduce more successful mid-tier and high-end models. “The Treo 680 is doing well, and it is exactly the sort of ‘feature-rich phone’ that Zander said the company needs to develop to get back some pricing leverage,” the source says.

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Nokia is clearly winning the low end game and the emerging market wars. Just look at their 79% market share in India. And on the high end, Apple is putting pressure on everybody with their high profile iPhone. Indeed, Motorola is vulnerable, and could use Palm.

But so could Dell.

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