HTC May Buy Palm to Fight Apple

Moribund Palm is up for sale, says Bloomberg. Who is in the short list of potential bidders? It's not Google, but close enough: HTC. And it makes total sense, because buying Palm could save HTC's ass in the Apple lawsuit.

Bloomberg says that Lenovo may want to buy it too. However, the most interesting bidder is HTC by far. The reason: HTC may find in Palm the patent portfolio it needs to battle Apple's lawsuit.

Apart from Apple and Google, Palm—which currently has a $870.8 million market value—is the only company with a modern smartphone operating system in the market. Palm has a long history in the PDA and smartphone worlds. Their original Palm Pilot—their low-cost Newton wannabe—was a total success back in the 90s, and their Treo smartphones were probably the first nice PDA/phone hybrids. As a result of this long story, Palm owns patents that may become very effective weapons in the war against Apple's omnipotent JesusPhone. Weapons that HTC may use to settle the lawsuit against Apple.

Apple and Palm has threatened to sue each other in the past. Rubinstein, who was at Apple during the development of the iPhone, came to Palm to create a theoretical iPhone killer and save the company from irrelevance. He got a nice phone, but his marketing strategy failed miserably. However, during this time Apple never sued Palm, presumably because Palm has enough patents to sue Apple back and make the legal battle pointless.

Although Palm has plenty of good intellectual property and a great smartphone operating system, their Pre and Pixi phones have been a sales failure. Knowing this, would the Palm Pre and the WebOS survive the sale? Or better said: Can anyone turn WebOS into a real contender in the current smartphone war? Between Google and Apple battling head to head—and Microsoft soon to join the war with Windows Phone Series 7—my gut feeling is that no, WebOS will not survive.

It seems like the only thing that makes sense is buying Palm to snatch some of their patents to use against Apple lawsuits and to improve future phones. Exactly what HTC needs. And maybe Google would like to help a bit here, just to avoid having to indemnify HTC in case Apple destroys them to bits. [Bloomberg]