Analysts mixed on Palm’s Linux focus, smartphone growth

Palm Inc.’s management told analysts in New York yesterday that it will exploit growth in the smartphone sector to thrive, yet ducked questions about whether the company would be acquired, according to various media reports.
Analyst Maynard Um of UBS wrote in a note to investors that he found the company’s focus on revenue growth via new, differentiated products-including its Web browser-as key to its future. Um said Palm’s plan to cut overhead and speed time-to-market was “sound.”
Yet the company’s refusal to discuss its possible status as a merger-or-acquisition target may have dampened its share price, Um said; today Palm’s stock was trading down slightly to $16.76 per share.
Palm sees growth in smartphones in the small-and-medium business category and among consumers, Um noted. The company will focus on growing its market in the Americas, expanding in the EMEA region (Eastern Europe, Middle East and Africa) and establishing its products in China, according to the UBS analyst.
Palm said at the analyst day that it would bring new products to market this year, including products based on a Linux operating system due in the second half. The company will use a Microsoft Corp. Windows Mobile platform for enterprise and international markets.
Palm’s plans preceded rival Research In Motion Ltd.’s earnings, due at close of business today. RIM is widely expected to exceed guidance and its strong growth has raised questions of sustainability.