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Smart phone maker Palm mulls sale

Smart phone maker Palm reportedly is consulting with investment bankers on its strategic options, ranging from a sale, an investment by private equity or a purchase of its own.
/ Source: The Associated Press

Smart phone maker Palm reportedly is consulting with investment bankers on its strategic options, ranging from a sale, an investment by private equity or a purchase of its own.

Beset with growing competition in the cell phone market, Palm Inc. is discussing its future with bankers at Morgan Stanley, the Wall Street Journal and CNBC reported Monday, citing unidentified sources.

A Palm spokeswoman wouldn't comment when reached by the newspaper.

The Sunnyvale-based company's shares soared last week on speculation it is likely to be acquired by another company. Palm's stock rose nearly 11 percent to close at $18.30 Friday.

Palm, which sells the Treo smart phone, has a loyal customer base but faces tough competition from cell phone makers Nokia Inc. and Motorola Inc., as well as BlackBerry-maker, Research In Motion Ltd.

Apple Inc. also will introduce a cell phone this year that is expected to increase the competitive stakes.

Analysts last week said a private sale could help Palm, shielding the company from quarterly scrutiny of its numbers and freeing up the company's management to make acquisitions.