Mobile Device Makers Samsung, Nokia Prepping Patent Play for Palm?
A patents analyst says he believes that based on Palm's patent portfolio and the cutthroat state of the smartphone industry, Samsung and Nokia are the two firms most likely to purchase the troubled maker of the Pre and Pixi.
Pundits across the Internet have been writing Palm's obituary since it reported a bad third quarter earlier this month and said the next quarter would be even worse. While Palm has said it will soldier on, it's still open to any fair offer, according to execs.
Of all the possible outcomes, purchasing Palm for patent protection is one of the worst next to bankruptcy. A smartphone vendor in need of patents to protect could buy Palm, which has a very old, rich library of patents related to phones, and keep just that as its shield against litigation by Apple (NASDAQ: AAPL), Research in Motion (NASDAQ: RIMM) or Motorola (NYSE: MOT).
But that's exactly what Anthony Mazzarella, CEO of PatentVest, thinks could happen. PatentVest scores the value of a companys IP portfolio in many ways to come up with the company's overall value, including how often a companys patents are cited by other companies.
"Based on our metrics, the value of Palms intellectual property is along the same order of magnitude as Apple," he told Investor's Business Daily. "The market is overlooking the IP value in Palm, which has great value."
Companies must cite existing patents (called "prior art") similar to their own when they submit a patent for approval. PatentVest scores a company based in part on how often a companys patents are cited in a patent submission -- one reason that Samsung and Nokia stand out. Samsung has cited Palm patents in its patent applications more than any other company, followed by Nokia. Apple and Motorola cite Palm prior art only half as much as Samsung and Palm.
"Samsung and Nokia must be highly interested in similar technology developed by Palm," Mazzarella told IBD.
Still Time for Palm to Rally Around webOS Handhelds?
But Will Stofega, program manager for mobile research with IDC, said he doesn't see either company as being able to handle such an acquisition right now. "My instinct tells me that Nokia has its hands full with legal issues and a refresh to Symbian. Trying to fit another operating system, unless they get it really cheap -- I'm not sure that makes sense," he told InternetNews.com.
The same applies to Samsung, which has Android and its own platform, Bada. "I could be 110 percent wrong, but it seems they have Bada in place and it seems they will make do with that," Stofega said.
Also, Stofega isn't ready to give up on Palm just yet.
"Palm has some time left. Not a great deal of time to change course, but they have time," he said. "I think everyone is throwing in the towel a little too quickly. They still have a path. Some may not hold them in good standing, but I think there's a lot more to it right now."