08-08-2002, 05:28 PM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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Sony will buy Palm
The funny thing about psychics is that even if they're wrong 99% of the time, people only remember the "amazing" 1% that they got right. So if I'm right about this, you'll all be amazed. If I'm wrong, you'll forget I ever mentioned it. Right? So here's my prediction...(I'm not the first one to suggest that Sony might buy Palm, but I haven't been truly convinced until recently):
Back in October 2000, I boldly (foolishly?) predicted that Palm would be a "smoking husk of a company" in 24 months. We're two months away from the deadline, and Palm is doing better than I thought. But they're not out of the woods yet, and the big bad wolf (share price) is stalking them. Today they were removed from the S&P 500 when their stock fell below 90 cents in after hours trading. They're now under the radar of the big brokers (have been since dipping below $5), and things can only get worse - they're trying a reverse stock split, which would turn ten of those 90 cent stocks into a single nine-dollar stock. It's a bold, but desperate move - from what I've read, it very rarely works long-term (Iomega is among the rare exception for a company that successfully did it).
So here's my prediction. The tax penalty for buying Palm after their spin-off from 3COM expired recently. I believe that Sony is waiting in the wings for Palm's stock value to get painfully low, at which time they'll make an attempt to purchase PalmSource (the software company). They could care less about the Palm hardware - they have better hardware anyway. They'll get PalmSource for a good price, and within 24 months they'll discontinue licensing the software to the other OEMs (despite initial promises to the contrary). Palm, Handspring, and all other licensees will have no OS for their devices and will be forced to develop their own or use Windows CE. Oh the irony.
Why would Sony do this? Because Sony stands to gain more from controlling the OS themselves than the few bucks they'd make from licensing it to others. It's also not Sony's corporate mentality to support competing products with an asset they would own. They would love to be the only Palm device on the market, and will squarely target the consumer - they don't care about the enterprise market.
So, by the fall of 2004, it will be Sony vs. the Pocket PC. There's my prediction. Thoughts?
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08-08-2002, 05:35 PM
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Mystic
Join Date: Jul 2003
Posts: 1,768
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Good thought
It sure would create waves in the industry... but if anyone were to buy Palm, it is Sony. I just wish Sony could see that the Palm intellectual property is not worth the effort and use their device design billiance to make a good Pocket PC instead.... but I don't see that ever happening! :cry:
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Jonathan (JonnoB)
"All that is necessary for the triumph of evil is that good men do nothing." -Edmund Burke
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08-08-2002, 05:41 PM
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Moderator Emeritus
Join Date: Aug 2006
Posts: 1,998
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Re: Good thought
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Originally Posted by JonnoB
I just wish Sony could see that the Palm intellectual property is not worth the effort and use their device design billiance to make a good Pocket PC instead.... but I don't see that ever happening! :cry:
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I agree. A Sony device running PPC would be incredible! But, like you say, I don't see Sony getting into bed with M$ for a very, very long time.
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08-08-2002, 05:45 PM
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Ponderer
Join Date: Apr 2004
Posts: 68
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YOU ARE RIGHT ON THE MONEY !!!
8)
Jason - you are right on the money with your prediction. Sony already has significant $$$ tied up in cross licensing and other costs with the Palm platform, and also has the resources to re-launch it under their Brand.
While this would truly be the (only) way to keep Palm alive longer...the only way Sony could succeed is to trash the Palm management and marketing plans. If they sell it under their Brand and with their marketing mthods, they can survive.
Palm itself has no way out any more without a huge influx of capital. They can't keep up with new products and innovations like they did in the old days with IPO $$$. Sony could be the white night savior if they buy the whole thing, as you predict they will.
8) You are right on the money....wouldn't be surprised to see it happen before year end (tax considerations)...I've told a few friends the exact same thing (Palm owners)...and to my surprise, they agreed!!!! One has already sold his Plam and bought a new Clie.
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08-08-2002, 05:45 PM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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Yeah, it's HIGHLY unlikely that Sony will build a Pocket PC. There's some bad blood between Microsoft and Sony - they compete on many levels, and it's only going to get worse.
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08-08-2002, 05:52 PM
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Thinker
Join Date: Jun 2002
Posts: 390
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The stock can still go much much lower, Sony would be wise to just wait until it reaches near bottom.
as of miday today, PALM is bid around .80, which bring it to about 463M market cap.
Palm's big customers will start asking if they will be around much longer and can commit to long term plan. If they will be around after christmas when sales number is bad, the reverse stock fail to create bottom support, and there is a hostile takeover attemp or they fail to get a refinancing for next OS6.0 product. Nobody will want to commit big effort if they won't be around in 6 months or if Sony buys them and refuse to share the OS.
All in all I think the reverse stock decission is bad, it create cascading event that lead to total lost of confidence instead of stabilizing the situation. They should have just keep going and the stock will hoover around $1.50 or even up along with the sporadic bull. But now they lost almost half of their value and along also market confidence.
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08-08-2002, 05:58 PM
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Pontificator
Join Date: Jul 2003
Posts: 1,466
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Re: Good thought
Quote:
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Originally Posted by JonnoB
I just wish Sony could see that the Palm intellectual property is not worth the effort
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That is a matter of opinion. Palm's intellectual property (PalmOS + BeOS) is worth a great deal, especially considering that it is the DOMINANT platform. People here seem to forget that.
The real problem is...Palm has neither the capitol nor vision to develop the OS. There is a great deal of potential in the BeOS acquisition. If put in the hands of visionary, talented developers, the PalmOS could morph into a platform that makes Pocket PC look like a bad Win32 hack. Perhaps Sony will swoop in with its bag of money and save this platform. But if Palm continues to run the show, and Dell manages to mass market $299 Pocket PC devices....PalmOS is dead as door nail. :crazyeyes:
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08-08-2002, 06:10 PM
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Pupil
Join Date: Mar 2002
Posts: 11
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Then there will never be a Sony PocketPC!!
If your prediction does turn out to be true, the worst thing would be that we will never see a Sony PocketPC. I, like many others, have always loved Sony designs. So it would be great to see what Sony could do if it ever made a PocketPC.
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08-08-2002, 06:17 PM
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Oracle
Join Date: Aug 2006
Posts: 864
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I think Sony is already getting their foot in the door into buying Palm, they have with OS 5 contributed the API for high res screens among other things, I think it is only a matter of time.
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08-08-2002, 06:28 PM
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Pupil
Join Date: Aug 2002
Posts: 10
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I agree that Sony would be in a good position to buy PlamSource. In fact it's probably in Sony's interest in doing this.
On the other hand I don't agree that Sony will shut all the others out of PalmOS. Sony does license its technology to others. They just like to be in control. Examples... the new fancy PocketPC phone you are playing with probably has a Sony screen on it. They let Sandisk and Lexar (and a few others) make memory sticks, and anybody can add a MemoryStick device if they want to (e.g. Acer, Samsung etc..).
Never mind that there was many previous Sony technology that's in wide-spread use, include the 3.5" floppy and the CD.
So I don't think the other licensee have any worries about Sony shutting them out.
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