According to Bloomberg, Palm is for sale, and the top candidate might not be somebody you’d expect. HTC is currently the target of an Apple lawsuit claiming 20 counts of patent infringement on iPhone IP. Buying Palm could give Google’s handset maker of choice the patents it needs to fight the Apple suit. Smart play, fellas.

HTC isn’t looking for hardware – it needs an operating system. As it stands, only Google and Apple have what is considered a modern mobile operating system (sorry, RIM, you aren’t even close). Unfortunately, HTC would probably only use the purchase to give it enough patents for a war with Apple, not because it actually thinks WebOS will go anywhere. Palm didn’t sell nearly enough handsets to keep the world interested in WebOS.

HTC wants to avoid is a costly licensing settlement with Apple that could affect profits far into the future. Spending several hundred million dollars on a dying company could be the cheap alternative it’s been looking for.

The last quarter’s financial results are in from Palm and things look grim. Everyone expected it. Palm warned us. That doesn’t take the sting out of $22 million in losses and some ugly sales numbers. The company shipped 960,000 phones last quarter, which sounds great until you see that it only sold 400,000 to consumers – 30% less than last quarter. That’s a lot of handsets to be sitting on the stock shelves.

The news almost certainly points to a buyer. Palm’s had nine months of work on WebOS to turn this ship around and it’s just not happening. The longer it lingers in a market where juggernauts like the iPhone and the Droid exist, the worse things are going to get. Palm needs someone to bail it out, the only question remaining is, who?

It could very well be RIM, though I doubt it would pull the trigger. RIM needs a more consumer-friendly platform, which WebOS would offer. There’s also someone like HP, a company that could use a cellular presence. The most likely, though, is probably Google. Google has the cashflow to throw a pile of money at Palm, dissect the company for all the good parts and people, keep development going on the stuff it likes and just scrap the rest. It also has the relationships with wireless providers to get Palm out of the mess its currently in, relying mostly on Sprint, which has its own sales issues, to keep the company alive.

Whoever it is, I’d expect serious discussions to start before the year’s end.

Source: Palm