Analyst: Nokia could buy Palm to boost business

Nokia Oyj could increase sales of Web-equipped phones with an acquisition of Palm Inc., according to Kaufman Bros. analyst Shaw Wu, who said the transaction would make "strategic sense."

Buying Palm, which introduced the Pre touch-screen phone last month, would provide Nokia, the world's largest mobile- phone maker, with the new WebOS operating system. WebOS lets users run multiple applications at once, the San Francisco-based analyst said today in a report.

Nokia, based in Espoo, Finland, fell the most in more than five years July 16 in Helsinki trading after lowering its forecast for market share. Nokia's market share in the so-called smart-phone market fell to 41 percent by the end of last quarter from 62 percent in 2005, hurt by competition from Apple Inc. and Research In Motion Ltd.

Nokia spokesman James Etheridge declined to comment. Palm representatives didn't return a voice-mail message seeking comment.

Wu advises investors to hang on to Palm shares. Palm, based in Sunnyvale, California, fell 20 cents to $15.18 at 4:01 p.m. New York time in Nasdaq Stock Market trading. Nokia dropped 9 cents to 9.27 euros in Helsinki.