My vote for one of 2008's strangest deals is...
My vote for one of 2008's strangest deals is Elevation Partners $100 million investment in Palm announced this week. It’s especially strange since it was made with full knowledge of the brutal financial markets in which we find ourselves at year end.
Palm built a great name in the olden days but is there be any room for Palm in the market? I don’t think so. True, Palm is releasing their phone OS, Nova, next month, but will that save the company? Hmmm … does the market needs another phone OS?
RIM and Apple now dominate the North American smart phone market (RIM has 41% and Apple now has 23%). We also have Windows Mobile from Microsoft and Android from Google to choose from. There is Symbian on Nokia phones, and the LIMO Foundation has released their mobile Linux OS.
These are smart guys at Elevation who are putting a lot of money into a company that is losing huge amounts of money (over $500 million last qtr alone).
This looks like yet another bailout plan. Elevation Partners already had $325 million invested in Palm; now they’re up to $425 million and hoping this $100 million will rescue the $325 million already in the deal. Will it work? We’ll see very soon. The Nova OS will need to be a blockbuster hit.
As a happy one time Palm user (remember the Palm III?) I’ll be pulling for them … but I’d really like a shiny new iPhone.
Posted by MarkReed, Executive Vice President on 26 January 2009