Shareholders urge Palm be put up for sale

It was the second time in four months that a major Palm shareholder has made such a suggestion, said the publication, an online extension of the San Jose Mercury News. In November, the company's fifth-largest shareholder also urged the company to explore a possible sale. Palm's second largest shareholder is expected to make a similar request soon.

According to the report, the latest push came from private investor Mark Nelson, who owns about 4 million shares, or 8 percent, of the company. In a letter to Palm's board of directors, Nelson noted that despite surging Treo sales, Palm is poorly equipped to dominate the smart-phone market in the future.

"Competitors are moving quickly in terms of product development and market penetration,'' Nelson wrote. "These competitors can potentially sacrifice profits in the smart-phone segment for the sake of greater market penetration.''

Therefore, he wrote, the company should "begin exploring strategic alternatives, including a sale of the company, while Palm is in the ascendant.'' Nelson went on to write that RIM, Hewlett-Packard, Dell and Apple would make good potential Palm buyers.

Apple has been credited with jump-starting the hand-held PDA market with Newton MessagePad, which it manufactured from 1993 to 1998. Since then, the company's interest in the PDA market has wavered.

While Apple continues to file PDA-relevant patent applications in the United States and Europe, company co-founder and chief executive, Steve Jobs, does not appear to be keen on the PDA market segment.

Speaking at the Wall Street Jounal D: All Things Digital conference in the spring of 2004, Jobs stated that he was proud not only of the products Apple had shipped in recent years, but also the products the company developed by decided not to release. When pressed to elaborate, Jobs replied, "an Apple PDA."