Mobile Maker Palm “For Sale”

Mobile device pioneer Palm is reportedly for sale, after sales of its critically acclaimed Pre smartphone disappointed.

The company is working with Goldman Sachs to find a buyer, Bloomberg has reported, and rival companies HTC and Lenovo have been suggested as possible candidates to buy Palm, whose smartphone sales have been disappointing despite an effort to save the company with a new smartphone operating system WebOS, and new phones launched in 2009.

PDA pioneeer hits hard times

Palm pioneered personal digital assistants (PDAs) in the 1990s and then made a move to smartphones, but was losing ground to the iPhone and the RIM Blackberry when it introduced the Pre, based on a new operating system, WebOS, in 2009. The phone had very good reviews, and had good sales to start with, as did it’s successor, the Palm Pixi, but the company admitted to slower sales this year, with more than half its phones still in warehouses.

The Pre was originally dubbed an iPhone killer and, somewhat ironically, has actually sold better than Google’s much-touted Nexus One phon.

“Driving broad consumer adoption of Palm products is taking longer than we anticipated,” chief executive Jon Rubinstein said in February at the announcement of Palm’s poor results. “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”

More recently, he told Fortune magazine that Palm had “hit a speed bump,” and would have to be “frugal” to survive, but was keen to resist putting the company up for sale, claiming Palm had “$590 million in the bank” and “a plan to take us to profitability.”

Palm has declined to comment on the reports.