Helping Palm Find its Seoul

Palm’s current abyssal situation is akin to defusing a live grenade with your teeth – the best you can hope for is surviving the situation and paying for years of therapy. The worst case involves onlookers watching your brains set a new airspeed record for vertical flight.  Regardless of option, those forced to observe can only wonder: “How did it come to THIS and why can’t I stop WATCHING?”
Schadenfreude aside let me make it abundantly clear that while Palm is unquestionably the Shambling Dead of mobile phone providers – burning through cash at a frightening rate with what appears to be little upside – the firm still has two major assets of value which could save its final legacy.
First off, webOS is a damned fine, mature operating system running proprietary extensions around a Linux kernel.  Google’s Android is a similar beast, but is fully open-sourced – of huge value to developers, obviously – but less so to smartphone OEMs interested in maintaining differentiated products.
Android is a great platform offering many exceptional selling points, but webOS has the advantage of maturity and offers a blend of open-source with hardware-specific features that make for a compelling solution to certain vendors  – assuming equally compelling hardware, which Palm currently lacks – but more on this in a moment.
While it is tarnished, the Palm brand name still has a certain cachet, particularly amongst US consumers. So –combine a distressed company with some great IP and a still decent brand and it becomes an obvious acquisition target. The question is who?
Looking at smartphone vendors – Apple and RIM are obviously not going to touch webOS.
As for Microsoft, the firm already made a one billion dollar investment in Danger and promptly tanked it with one badly configured cloud backup/restore and truly heinous PR damage control (or lack thereof).
Redmond is now fully committed to launching Pink (Danger’s successor OS) running on its own hardware and Windows Phone 7 for the OEM crowd.
Nokia owns Symbian, so it has its own platform which pretty much owns Europeans smartphone sales.  Motorola is firmly in the Android camp with Droid and Co, as is Sony Ericsson with the Xperia X10 and its successor models.
Samsung recently announced its Bada UI – a very user-friendly shell over their proprietary OS.  With nearly 20 per cent of the world’s mobile terminal sales, Samsung is a force to be reckoned with – but their Bada-based smartphone sales have yet to make an impact.
Samsung has grown its own proprietary OS, so webOS is not an option for them – but it IS an option for the firm’s mortal enemy and the forgotten player in mobile phone space – LG.
LG is the number three handset vendor in the world, but tends to be overlooked in the US.
Chocolate was LG’s attempt at handset branding, but the firm has never successfully captured US brand consciousness the way its larger cross-town rival has.
It’s also worth noting that LG has a history of having knee-jerk reactions to major decisions made by Samsung – so the announcement of Bada is certain to have unleashed a strong desire to counter Samsung with something of its own.
LG has the capital base to easily acquire Palm and in the process bring webOS  – which according to Gartner Group had 0.7 percent of the 2009 smartphone market share – onto its hardware.
LG would also gain Palm’s stronger US branding and deliver a kick in the teeth to Samsung in the process.
To the best of my knowledge, no one has publicly discussed LG as a Palm buyer – but if I was Elevation Partners, I’d be drawing up term sheets as I type these words.
LG buying Palm makes a certain amount of sense and if Elevation were to throw in a free Bono concert, who knows, it might just happen.
Regardless, the Palm deathwatch continues and one can only hope for a dignified ending – and perhaps through LG, gaining back it’s Seoul in the process.
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Jonathan Hirshon is the Principal of Horizon, a marketing and communications consultancy based in Santa Clara, CA.  Called “The Guru of Silicon Valley” by BusinessWeek, he is acclaimed for his technical and marketing insights and provides counsel to a number of international high-tech startups and has previously advised Apple Sony and a number of other industry leaders – details atwww.horizonpr.com or contact him at jh@horizonpr.com.