Motorola to bid $2 billion for Palm - shareholder

By Simon Aughton

Posted on 22 Mar 2007 at 10:08

Motorola will announce a $2 billion bid for Palm on Thursday, according to CNBC.

The news service says that according to a Palm shareholder, who declined to be named, Motorola has leapt above Nokia and two private equity firms in the list of suitors for the troubled PDA and smartphone maker, which earlier this month hired investment bank Morgan Stanley to investigate its options.

'For Motorola, I think it's the threat of Nokia owning Palm,' the shareholder told CNBC. 'The upside for Motorola is much greater.'

He noted that as Apple prepares to introduce the iPhone, the future of both Palm and Motorola could be dependent on the takeover.

'Apple is about to walk away with the OS market for handheld computers,' he said. 'In some ways, the iPhone from Apple is a trojan horse, a handheld computer running the Mac OS that's poised to take over the world.'

Investment advice website Seeking Alpha thinks the opposite is true, that Motorola acquiring Palm would only be good news for Apple.

'Motorola is getting set to give Apple a nice mobile-market birthday present: it is supposedly buying Palm for $2 billion, which should thoroughly distract Moto around a doomed platform,' it says. 'Steve [Jobs, Apple CEO] should send 'em a nice note of thanks.'