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Palm and RIM to merge this Thursday?
Benjamin J. Higginbotham
A few interesting rumors are starting to circulate on a Palm and Research In Motion (RIM) merger this Thursday (06/29/2006).  There are a couple of good points here but I think there's a bit more to this.

Looking at this from a pure technology perspective for a moment, this could actually be a great thing.  RIM does not have a product as good as the Treo, but Palm does not have server software as good as RIM.  Very soon we will see the BlackBerry Connect software released for the Treo in the US which will help bring the Treo into the enterprise, but it's not quite enough.  Palm won't have the end-to-end solution, it will require RIM for Palm to break into the enterprise.  If Palm can get their hands on RIM server software allowing for push e-mail, calendar, contacts, remote device security and policy auditing, it will create a very powerful solution.  Third parties offer this now in the form of GoodLink and whatnot but these solutions are still not as good as what RIM has to offer in their turn-key package.

RIM is suffering right now from a long and drawn out lawsuit.  RIM made a lot of mistakes from the beginning and it's the perfect time for a larger or more stable company to come to the rescue.  I see two possible companies that would be a good fit:  Apple and Palm.  Since I don't think Apple is quite ready to enter the smartphone market this leaves the much smaller Palm.  Palm and RIM have already been working together on the BlackBerry Connect software for Treos so I think this is a great fit.  I do believe that Apple will eventually enter the smartphone market and if Palm does not partner with Apple on this then they better have a much more solid product line to compete.  Apple is very, very good at making compelling product and I do believe that Apple would be able to blow the Treo line out of the water if they tried.  The area that Apple really falls down in is the enterprise, and with a Palm/RIM merger it would give the resulting company a much more powerful stance to compete against Apple.

The technology makes sense, the relationship makes sense it all looks good on paper.  I have yet to see any hard evidence that this will actually happen, but if it did I think it would be a good thing for all sides.

EDITOR'S NOTE: Impression that Palm is larger than RIM has been edited. 


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1. Posted by: zhe chen on June 25, 2006 8:35 PM:

A larger and more stable company to come to the rescue? You mean Palm is a larger and more stable company than RIM?

There is no point Palm will acquire RIM. RIM's revenue continuelly increased 70%~80% per year for the last five years and is much faster than the growing speed of Palm which is about 10%~20% per year. And in the year 2005, the annual revenue of RIM is 1.5 times of Palm and net income is two to three times higher.

When Motorola and Nokia entered the Smartphone market, the most dangerous company is Palm not RIM. RIM still has more than 70% shares in server software. So the most likely case is RIM acquire Palm, not the way inverse.

2. Posted by: Benjamin J. Higginbotham on June 25, 2006 9:14 PM:

That part was written very poorly and should not have been in the original article. My apologies, it ends up reading to be an untrue statement. I meant to imply a larger company like Apple or a more stable company like Palm (now that the Treo line is really starting to take off and they are not bogged down by lawsuits such as the Visto suit against RIM). I wrote that wrong and it reads incorrectly. My fault.

You did touch on a point I was trying to make which is RIM is large in enterprise but small in B2C. Palm is huge in B2C but not large in the enterprise. Merge the two (RIM to Palm or Palm to RIM, whatever, I'm talking merger) and we have a very powerful solution. If Apple enters the smartphone market or the growing threat from WM5 devices, the new Palm/RIM company would be able to easily beat them away.

Keep in mind the original data is speculation and this will probably not happen, but it's fun to look at it from afar and see where this really does make sense.

3. Posted by: Ellen on June 27, 2006 8:40 AM:

It doesn't matter how compatible the technologies are if the businesses don't have identical goals and a strong enough management to get everyone actively supporting the goals and the merger. For every tech merger that succeeds, how many more fail? It seems like either a big company completely subsumes a smaller one, or the whole thing is a disaster.

Piloting Palm is a really interesting read about the history of what's now Palm, and the various companies they've been associated with. though unfortunately only goes up to 2001.

In my opinion, RIM has been weakened by the recent lawsuit, Palm by years of decisions that turned out to be the wrong ones, by strong competition, and by the PDA market overall never really reaching its potential or meeting the sales predicted for it. Neither company is big enough, or stable enough, to just incorporate the other. It's hard (for me) to see a merger between the two making anyone but Microsoft happy.

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