As Palm is becoming a likely target for an acquisition, Lenovo Group, a company that recently re-entered the market of mobile phones, is named a potential buyer.

Palm is the inventor of personal digital assistant (PDA), the father of today’s smartphone. However, the company failed to take advantage of the smartphone revolution in the middle of the previous decade. In order to develop the latest operating system for smartphones, Palm even had to scrap plans to create Foleo netbook/smartbook companion for mobile phones just months before netbooks became popular. However, its latest smartphone called Pre failed to meet sales expectations. As a result, the rumours about possible takeover of Palm are heating up.

According to OptionMonster, hedge funds (or their brokers) are spreading rumours that Lenovo is the potential buyer for Palm, which helped the latter’s stock to go up on Wednesday. Earlier many other companies were named as potential buyers, including Nokia, the world’s largest maker of mobile phones. Another likely buyer could also be Acer Group, which has also entered the market of smartphones and which would gain a lot from Palm’s patent portfolio as well as engineering resources.

Lenovo Group is known for acquisitions. In order to revolutionize its personal computer business, the company acquired PC unit of IBM and quickly gained worldwide recognition of Lenovo brand. However, taking over Palm does not seem to be a really great idea from brand or product family points of view: unlike IBM’s Think-branded line of products that have always been popular among business users, Palm’s family of devices is not actually popular among any group of users. The only reason to acquire Palm is to get its patents portfolio along with a pool of engineers.

Palm and Lenovo did not comment on the news-story.

Tags: Palm, Lenovo, Acer, Nokia