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Palm opens for Chinese cash

Cash-strapped smartphone maker looks to Huawei for help

Palm has approached Huawei Technologies about the possibility of a takeover, reports suggest.

Palm suggested it was up for sale at its last - poor - results conference. Earlier this week, Palm shares jumped on reports that Goldman Sachs and Qatalyst Partners were looking for possible bidders for the firm.

The firm has struggled to meet smartphone challenges from Google's Android and Apple's iPhone, amongst others.

And of course Huawei has form in buying much-loved, almost disappeared companies: it bought 3Com for $2.2bn in 2007.

Correction - Huawei bid for 3Com but HP bought it for $2.7bn.

The Reuters report suggested that talks weren't going that far, or fast. Initial contact was made in mid-February and talks have not really progressed since then.

More on this here.

Huawei makes and sells kit for the back-end of telecoms and broadband networks - from antennae to network management as well as its own handsets, including some using Android.

Palm would have made a perfect buy for a big company looking to get into mobile devices - but most of the would-be bidders have already made their mobile move.

The obvious exception is Dell, which is regularly rumoured to be getting into handset making. Why you'd switch from one form of low margin hardware to another is a question for the business strategy consultants. ®

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