Everyone knows that Palm is a sinking ship. Even Palm’s employees know it. A recent SEC filing shows us that Palm’s senior vice president of software and services, Michael Abbott, will be leaving the company some time this month. That same filing also showed some, ah, generous incentives aimed at keeping others from following suit.

Just how badly does Palm want to keep the other Senior VPs? How about a bunch of stock and a $250,000 cash bonus. If that’s not hitting the panic button I really don’t know what is. It’s probably safe to assume that Abbott was made some sort of offer to stick around, something he was willing to turn down to take all of his WebOS ingenuity elsewhere. You have to feel bad for the guy. He was an integral part of what is actually a great product (the OS, not the handsets that run the OS) but because of a serious marketing failure and some lackluster hardware Palm just never got off the ground.

Better luck at the new position, Mike.

Source: Palm

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

In a release today, Palm announced it was lowering sales expectations for the year due to slower than expected customer adoption of the new WebOS platform. As CEO Jon Rubinstein put things, “driving broad consumer adoption of Palm products is taking longer than we anticipated.”

His wording seems to suggest that the company still thinks consumers will pick Palm, but that it’s going to take more time. I’ve got news, fellas. It ain’t happening. It’s now nearly eight months since the Pre launched, eight months in which the company has failed to build a strong developer base, to say nothing of mediocre sales. We’re just weeks past Palm’s launch with Verizon, about which we’ve heard nothing. That rarely means good things.

Now everyone has just one question in mind – who’s going to buy Palm? The only other possibility would be for the company to develop yet another device, which I highly doubt it has the money to do. We know RIM and Nokia could both use a better platform, and Dell has been making passing attempts the cell phone market for years. None of them have actually expressed interest, though, and I would think only Nokia or RIM would be in a position to really capitalize on that kind of acquisition.

In any case, Palm is in trouble. We’ll see if it can dig itself out by year’s end.

Source: Business Insider