Dell and Palm – Will They Unite?
| by PalmWebOS.org on May 29th, 2009 |
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Dell has money and infrastructure but needs innovation. Palm has innovation but lacks a successful business model and cash. You know that old saying, “if you can’t beat ‘em, join ‘em”? Consider this (potential) case of “if you can’t BE them, BUY them.”
The union makes sense. If you’re a Rocky Balboa fan you might recall what Rocky told Pauly when asked, “What do you see in my sister?”
Rocky answered, “She fills gaps.”
In much the same way, Dell and Palm would fill eachother’s gaps incredibly well. I’m not just speculation here -check out this quote from a ComputerWorld article published TODAY:
Dell plans to grow its business by acquiring another company, a senior executive said Friday.
A Palm purchase makes pretty good sense. But why would Roger McNamee, Elevation Partners and Palm sell right now? The stock price has seen INSANE levels of growth since January. Dell would need to pay top dollar to make it worth their while. While Dell is rather desperate, they have top dollar to spend.
Isn’t spending top dollar on something of value better than trying to build your own value that winds up being a P.O.S. that mobile carriers refuse to offer their customers? That is the problem Dell faces and with Palm they could buy their way out of the innovation gap.
Meanwhile, Dell could help Palm rapidly accelerate the development of PalmWebOS by infusing cash and resources that might allow Palm to offer more WebOS phones quicker than normal, with deeper integration, quicker OS progress and more.
All this news comes 1 day after Dell reported a 63% drop in earnings compared to last year. Besides the fact that Dell has 9.7 BILLION dollars in CASH on their balance sheet, they explicitly stated their intent to buy out companies but would not give ANY indication which ones:
“Michael [Dell] did talk about our desire to increase activity for inorganic growth. We have established a healthy cash position and strategically we will be looking for opportunities to do that,” said Steve Felice, president of the company’s small and medium business unit, during a conference call with reporters.
“Obviously we won’t share those details, because we can’t disclose what companies or when, but we are looking at opportunities to expand the business,” Felice said.
Palm? Acer? What do you think?
1. PT wrote on May 29, 2009
While Palm needs money (I think the launch-day Pre limited inventory is due to a lack of funds to build units), I think this would be a disaster for Palm. It’s the 3Com acquisition all-over again….an (excellent) engineering company acquiring a company filled with creative-types….the creatives will leave, just like before, and leave a shell of a company that makes product decisions based on cost and thus cannot compete. Palm has given the world some truely innovative technology–usable PDA’s, the Smartphone, the precursor to the Netbook (the too early and DoA Folio). They seem to be making a return to the forefront of innovation. I hope they make it and don’t get waylaid again!