NEW YORK (Reuters) - Palm Inc shares jumped 10 percent on Friday after the company announced it will sell smartphones through top U.S. mobile carrier, Verizon Wireless, a deal that analysts said could mark the beginning of a turnaround for the handset maker.
The step toward wider distribution, announced at the Consumer Electronics Show in Las Vegas, was not surprising, but analysts said it was still good news.
They also said the company’s move to expand its webOS software development would help it compete in an increasingly competitive smartphone market.
“Palm’s growing global distribution and developer momentum are a clear signal to us of Palm’s unique strengths and differentiation amidst competition, and bodes well for future smartphone leadership,” RBC analyst Mike Abramsky said in a research report.
Verizon Wireless is a joint venture between Vodafone and Verizon Communications.
Abramsky reiterated an “outperform” rating and $25 target on Palm shares, which rose $1.12 to $12.30 by mid-afternoon.
Palm in December reported a wider-than-expected quarterly loss amid strong competition and slow sales through its carrier partner Sprint Nextel.
Palm’s shares are extremely volatile and have been a favorite of short-sellers. The company is frequently mentioned as an acquisition target.
Reporting by Ritsuko Ando; editing by John Wallace