Jefferies is out with an interesting call on Palm (NASDAQ:PALM) saying we could see a bidding war for Palm, could garner c.80% premium. Nokia (NYSE:NOK) mentioned as the main bidder. Strategic rationale: WebOS as carrot - Palm gives buyer a PC-class OS (WebOS; Linux-based, multi-tasking) and a US-centric high-end handset (Palm Pre) that best mimics iPhone experience (UI) - courtesy of senior Apple staff defections to Palm. Nokia can't compete in US (c.6% m/share) or high-end with Symbian but with another OS (would make 4, or 5 incl MSFT in Noia Netbook) 3rd Party application development is confused to say the least. Palm would have to be run as a separate business near term; 'parallel' roadmaps may take 1yr+ to converge; it could be 2011 before we see a fully integrated WebOS and Ovi services ...

Intel (INTC) and Nokia (NOK) have joined hands to tap the smart phone and MID market. Nokia will use the Atom processor in its smart phones and mobile Internet devices going forward, even as Intel licenses Nokia's 3G HSPA modem technology.

The two companies have used open source software from Linux to develop their respective mobile platforms. The strategic relationship is expected to enable Intel's Moblin (currently in beta stage) and Nokia's Maemo to incorporate several open source applications, such as oFono, ConnMan, Mozilla, X.Org, BlueZ, D-BUS, Tracker, GStreamer and PulseAudio through some co-coordinated effort. The association will also enhance device functionality for both in terms of Internet connectivity, wireless communication, superior graphics and comprehensive multimedia capabilities.

Nokia currently holds about 40% share of the mobile phone market and a 34% market share in smart phones. The partnership should, therefore, be of great strategic

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