Palm announced their quarterly results – bad really bad.  Eric Savitz has a post on it with commentary from analysts.

Palm stock had a brief run up yesterday at the bell and shortly afterward prior to the company’s call.  Then the Palm CEO Jon Rubinstein opened his mouth – the stock plummeted.  The news had a bit of flash to it on the surface – the revenue numbers.  Then it was apparent to everyone that Palm was in deep trouble.  The reported numbers of shipped phones was not the big story – the actual number  of phones sold to users was telling – Palm will be for sale.

In the channel business there are two main sales metrics:  1) sell-in – amount sold and stocked by partner (like Verizon) and 2) sell-thru – amount sold to end customer by partner (consumers).  Palm reported sell-in numbers but the actual sell-thru were dismal.

I like Palm and think that their product isn’t bad at all and their OS is valuable.  The problem has been their execution and very poor marketing.  They just got their butts handed to them in the marketplace.  I feel bad and I was rooting for Palm.

Palm Is An Asset – They Will Be Sold

There is no doubt in my mind Palm will be sold.  I don’t think that they can recover.  Given the marketplace velocity and Palm’s history of speed and lack of marketing.  I just don’t see it.  Now with such a poor financial situation they can’t buy their way back to the market – meaning price subsidize for marketshare.

Who will buy them and why?

I think that Palm has a core asset in the WebOS for smartphones and that any one who wants to get in the game can take them off the table.  Suspects?  I see mainly  HP and possibly Cisco, Motorola, and maybe even Intel.

Lets talk HP for a minute.  HP has a big consumer campaign yet no consumer play in mobile and no OS plans.  Palm is in HPs backyard and HP with one move can get in the mobile consumer game with a product and OS that can integrate across HP consumer and cloud business.  I’d be all over this if I were HP.

Lets talk Cisco.  Cisco has been trying to be a consumer company in a big way.  This play would give Cisco the dream product – a mobile edge device and OS that can integrate into their proprietary end to end network and video (rich media) play.  We all have been seeing Chambers playing with his flip phone like a giddy teenager.  With 40b in the bank picking up Palm would be a nice trophy and entrance into the consumer game while not pissing off Service Providers.

Lets talk Google.  Google is the wildcard.  Google doesn’t need palm but could take them off the table just to prevent the competition from getting them.

All in all Palm pretty much failed to execute and they missed the biggest opportunity of all time in this generation of technology – the mobile, cloud, and application revolution.

Palm will be sold.  I think HP should buy them.