NASDAQ:PALM Rising – High on Takeover Rumors, TSE:RIM & NYSE:MOT Fall

An article by pgupta

Palm, the PDA giant, has seen some tough times lately as Apple overtakes it in the PDA market. However, the stock appears to have risen thanks to rumors that there may be a sale of the PDA pioneer in the near future. Overall, this should help build the smart phone market for investors, while the issues with Research in Motion, makers of the Blackberry, could hurt the smart phone sector.

Palm Inc., which recently saw its share price go down to its lowest level in the past year, bounced back after it was found that the company (NYSE: PALM) may be bought. Shares jumped 13 percent when a report was issued from a Chinese newspaper that HTC, the smart phone maker, may be buying the company. Palm Shares rose to $5.20, which is the highest level since mid-March, when a poor earnings report was released. Another report stated that Lenovo, maker of personal computers, was also interested in buying the company.

Palm has struggled to hold onto the PDA market after the surge in smart phones took over the market with the release of the iPhone several years ago. Other rumored buyers of PDA include Nokia and Blackberry, which is the main competitor of Palm.

In regards to Blackberry, Research in Motion, the makers of the Blackberry, their earnings report was released on Wednesday and it showed a weaker than expected sales market for the company. While the earners per share were $1.27, and that is 27 percent higher than what they were a year ago, it is still short by one cent to what most experts were expecting. In addition, revenue growth was only 18 percent to $4.1 billion, which missed the expected mark by quite a bit. Competition is the smart phone market is very strong and Blackberry is doing its best to hold on. The company still continues to bring in new subscribers, including nearly five million over the past quarter. The company did state that it was pleased with that number and expects that in the first quarter of 2011, sales will go up by $200 million and the company expects to have a gross margin slip to 45.7 percent. Blackberry expects to bring in about 5.2 million subscribers in the first quarter of 2011 as well.

The smart phone market is highly competitive and there are many companies that are trying to find their position. However, this week it was all about the possible purchase of Palm, and the lower than expected results released from Research in Motion. The smart phone sector should get a big boost coming up when Apple releases the newest generation of the iPhone, which is expected to allow multitasking. No matter what, the smart phone sector is a sector that continues to rise and grow in the future. It is a sector that most investors are very confident investing in.

Further Reading

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Smart Phone: Where is the future headed?