Unstrung has apparently broken the big news that Palm is on the verge of being bought out, with a deal likely any day now. The big questions, though, are who is going to purchase the company, and what does this mean for Apple and the iPhone?

Four companies are rumored to be in play. Two of the companies are private equity firms–believed to be Texas Pacific Group or Silver Lake Partners–which are supposed to be the preference of Palm management. Our assumption is that if one of these companies is successful in its bid, the phone industry in general, and the smartphone industry in particular, won’t be radically changed.

The more interesting candidates to purchase Palm, though, are Nokia and Motorola. Motorola is a major phone producer, but they aren’t exactly known for their top-of-the-line smartphones, instead tending towards the lower consumer market. For them, a move to acquire Palm would accomplish many things, giving them instant smartphone presence and credibility with the Treo, while also making them major allies of Microsoft, due to the use of Windows Mobile. That’s a significant friend to have in your corner.

Nokia has also had a hard time gaining a foothold in North America’s smartphone business, it seems, and Palm and the Treo would be a big boost to their fortunes in this part of the world. Nokia and Motorola also could both simply want to make sure that the other company doesn’t end up with Palm, each trying to block the other.

From Microsoft’s perspective, a Nokia-owned Palm or a Motorola-owned Palm becomes a major part of their mobile strategy. Cooperation with either company is likely in an effort to better compete with RIM, in particular. Beyond RIM, though, the iPhone is obviously a product that has caught the attention of Motorola and Nokia, as remarks from their CEOs have shown. What we could be seeing is part of a consolidation and drawing of borders in order to withstand the potential Apple onslaught.

Should Apple be afraid of the situation that’s unfolding? The good news is that this is probably too close to the iPhone release to really be a game changer. By the time the acquisition goes through, the iPhone will be on the verge of release, and whether it’s Motorola, Nokia, or some other company, there won’t have been enough time for a significant change in anticipation of the iPhone.

In the longer run, though, this is certainly a situation to watch. While the industries are not perfect analogues, when Apple entered the MP3 player market with the iPod, it was a market without consolidation or dominant companies. The smartphone industry is much farther along in its development, and the pickings won’t be so easy. Apple is up to the task, but the other players will make it a challenge. Maybe Apple should just screw everyone and buy Palm themselves?

Filed under: iPhone News