Analyst: Palm will be bought within the 'next year or two.'

Paul Nesbitt

Smartphone minnow Palm is doing well attracting developers to its App Catalog, but it may not be big enough to survive as an independent company as the smartphone goldrush attracts bigger players.

That's the outcome predicted by Deuthsche Bank analyst, Jonathon Goldberg, in a note to his clients.

Goldberg noted that Palm can now boast nearly 1,300 webOS applications in its Web Catalog online store – more than those available in the Nokia and Microsoft stores. He also predicted that Palm would soon offer more apps than RIM's App World, and may even overtake the Android Market, too.

Palm's recent US deal with network giant Verizon to carry its smartphones means that Palm should sell at least 600,000 handsets in the US alone during this quarter, according to Goldberg.

However, the company's small size – it is currently valued at about $1.8 billion – means that it could be a tempting target for a company like Microsoft, Dell or HP, which wants to establish a foothold – or a stronger presence – in the smartphone market.

'Big consumer electronics companies need some way to participate in the market and most of them have failed to come up with a successful strategy,' wrote Goldberg. 'Street consensus appears to be that Palm will be acquired in the next year or two, which given the current environment we think could be a reasonable possibility.'