In a recent MarketWatch article on Microsoft's struggling Zune portable media player, reporter John Letzing got an interesting quote from George Kurian, a vice president at Tradition Capital Management LLC, which owns Microsoft shares.
"Microsoft should abandon Zune and follow Apple's strategy to try to make its presence felt in the high-growth smartphone sector," Kurian said. He then went on to suggest that the easiest way for Microsoft to do that would be to buy Palm.
This is not the first time someone has suggested that Microsoft buy Palm. Back in January of this year, before the Pre was released, Farhad Manjoo wrote an article on Slate entitled, "
Forget Yahoo--Buy Palm
." The subhead was, "Why Microsoft would be foolish to get into the Web ad business." The core argument behind the piece was that Microsoft should stop worrying about the Web ad business and focus on creating software, which actually represents a much larger opportunity because the overall software market is 10 times that of the overall Web ad market.
"Microsoft might pay tens of billions of dollars for Yahoo; it could pick up Palm instead for just $1 billion or $2 billion and then spend several hundred million more on transforming the Pre's user interface into a mobile OS that can run on phones made by multiple vendors," Manjoo wrote. "Microsoft would also gain a loyal Palm audience--and a base of developers looking to create apps for the device. And then Microsoft would have money left over to buy other software companies--start-ups and established firms that power the next generation of devices, or that are pioneers in the selling online software to companies."
More recently, Gary Marshall over at Techradar.com took a whack at why Microsoft should ante up for Palm. He pointed out that buying Palm "would bring the Pre's designers to Windows Phone, and it would annoy Steve Jobs, too" because the Pre team includes Jon Rubenstein, former vice president of Apple's iPod division, and former Apple developers' champion Chuq Von Rospach. Also, in the same article, Andrew Kitson, senior analyst with Juniper Research, said that a WebOS-powered smartphone would be a nice item to sell in Microsoft's forthcoming retail stores.
What's interesting about this growing cry for Microsoft to buy Palm is that a lot of people seem to be rather dismissive of Microsoft's own smartphone operating system, Windows Mobile.… Read more