At $12.34, Palm (PALM) is up well over seven percent as I write this, a nice gain that more than offset the four percent drop the company’s shares suffered last week. Clearly, the market is expecting a lot of the Pixi, and according to some analysts, it may get it. In a note to clients Friday, RBC analysts said they “expect positive consumer reception and healthy sell-through,” for the Pixi.

But not everyone agrees with RBC’s cheery assessment. Ashok Kumar, an analyst at Northeast Securities, has a much dimmer view of Palm’s prospects in the months ahead. He says his sell-through checks show a “substantial decline” in recent Pre sales.

“As a fading brand, carriers are likely to see better returns on their promotional and advertising dollars with other vendors,” Kumar writes. “WebOS has negligible smartphone OS share, 0.2 percent per Gartner estimates, and is unlikely to attract any meaningful third-party application support. Palm has bet the farm on webOS and there is a real possibility that they may not achieve critical mass.”

Perhaps. Perhaps not. We’ll see in the months ahead.

According to new data released this week by Gartner, Apple shipped some 7.04 million iPhones in the third quarter–up from just 4.72 million phones in the same period a year ago–for a 17.1 percent share of the market (see table below; click to enlarge).

That’s a 49.2 percent year-over-year increase in sales and it puts Apple (AAPL) in spitting distance of Research in Motion (RIMM), which also posted close to a 50 percent year-over-year gain to claim 21 percent of smartphone sales during the period.

With 39 percent of smartphone sales, Nokia (NOK) was the top seller during the period, and it’s clearly not ceding its spot any time soon. But RIM might, given the small gap between its market share and Apple’s.

In any case, RIM clearly has a fight on its hands as we head in the holidays, especially if Apple brings an 8GB iPhone 3GS to market in the next few weeks.

UPDATE: According to Apple’s last earnings announcement, the company said it shipped 7.4 million iPhones during the quarter. Why there’s a discrepancy between the company’s numbers and Gartner’s isn’t clear.

The acquisition, which has been approved by both companies’ boards, should bolster HP’s data center strategy and, thanks to 3Com’s routing business, intensify competition with rival Cisco (CSCO), which has lately been expanding into HP’s businesses.

“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor,” Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP, said in a statement.

“By acquiring 3Com,” Donatelli added, “we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

Below, the official release:

HP to Acquire 3Com for $2.7 Billion
Will create networking industry powerhouse with a proven, edge-to-data center set of solutions and global reach

PALO ALTO, Calif., and MARLBOROUGH, Mass., Nov. 11, 2009

HP and 3Com Corporation (NASDAQ: COMS) (”3Com”) today announced that they have entered into a definitive agreement under which HP will purchase 3Com, a leading provider of networking switching, routing and security solutions, at a price of $7.90 per share in cash or an enterprise value of approximately $2.7 billion. The terms of the transaction have been approved by the HP and 3Com boards of directors.

This combination will transform the networking industry and underscore HP’s next-generation data center strategy built on the convergence of servers, storage, networking, management, facilities and services. The resulting business outcome will help customers simplify the network, deploy a unique and innovative edge-to-core network fabric for the enterprise and improve IT service delivery capabilities, all delivered with best-in-class price-performance.

“Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor,” said Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP. “By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.”

“Our extensive product line and innovative technology together with HP’s breadth and scale will expand our global opportunity,” said Bob Mao, chief executive officer, 3Com. “3Com’s networking products are based on a modern architecture which has been designed to offer better performance, require less power and eliminate administrative complexity when compared against current network offerings. Our products are enterprise proven and widely deployed in the world’s largest banks, manufacturers, Internet service providers, public utilities and retailers.”

The acquisition of 3Com will dramatically expand HP’s Ethernet switching offerings, add routing solutions and significantly strengthen the company’s position in China–one of the world’s fastest-growing markets–via the H3C offerings. In addition, the combination will add a large and talented research and development team in China that will drive the acceleration of innovations to HP’s networking solutions.

3Com also brings to HP best-of-breed network security capabilities through its TippingPoint portfolio. For the past four years, TippingPoint has been the leader in Gartner’s “Magic Quadrant” in its evaluation of leading network security products. Approximately 30 percent of the Fortune 1000 companies have already deployed TippingPoint intrusion prevention systems.

“We are confident that we can run our entire global business of 300,000-plus employees, including our next-generation data centers, entirely on the new HP networking solutions,” said Randy Mott, executive vice president and chief information officer, HP. “Based on our experience and extensive testing of 3Com’s products, we are planning to undertake a global rollout within HP as soon as possible after the completion of the acquisition.”

Under the terms of the merger agreement, 3Com stockholders will receive $7.90 for each share of 3Com common stock that they hold at the closing of the merger. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of 3Com’s stockholders. The transaction is expected to close in the first half of calendar 2010.

HP anticipates that the transaction will be slightly dilutive to fiscal 2010 non-GAAP earnings.

Gartner (IT) figures Acer sold 12.5 million PCs in the quarter, a year-over-year increase of 23.6 percent from last-year’s third quarter and 15.4 percent of the global market. By contrast, it says Dell (DELL) sold 10.3 million PCs–6.7 percent fewer than it sold a year ago–for a 12.8 percent market share. Meanwhile, IDC pegs Acer at 14 percent global market share and Dell at 12.7 percent.

Both research houses put Hewlett-Packard (HPQ) on top, with Gartner showing the company at 19.9 percent of PCs shipped and IDC at 20.2 percent.

While this might seem optimistic for an OS that is found on less than two percent of all smart phones today, it’s not entirely unreasonable given the distribution deals Google (GOOG) has been lining up. Yesterday, the search giant announced a deal to bring Android-based devices to Verizon Wireless (VZ). Now comes word that Dell (DELL) is building an Android handset for AT&T (T). People briefed on the companies’ plans tell The Wall Street Journal that the device is similar to the one the PC marker has been showing off in China and is scheduled to hit the market sometime in early 2010.

PREVIOUSLY:

• Dell Dullephone Sighted in China
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[Image Credit: mobile.163.com]

Both debuted this morning, along with a Web-based storage and media-sharing service called My Phone. And while they’re certainly better than Microsoft’s offerings to date, the market seems unimpressed. Said Gartner (IT) analyst Carolina Milanesi: “There is nothing in this version that makes drastic changes that will get people to choose Windows who didn’t before.”

And, indeed, that appears to be the case. WinMo 6.5 is very clearly a stopgap on the path to 7.0, which is to be released next year. “Windows Mobile 6.5 isn’t just a letdown–it barely seems done,” Gizmodo’s John Herman complains, adding that its underpinnings reveal “an OS that hasn’t been fundamentally changed in years, and which bears a strong resemblance to Windows Mobile 6.1, and a startlingly not-weak resemblance to PocketPC.”

A startlingly not-weak resemblance to PocketPC. Not the comparison Microsoft (MSFT) was hoping for, I’m sure, especially given the OS’s decidedly flashier competition. But likely about all we could expect when even the company’s own executives are saying privately and publicly that they wish the OS was further along.

So 6.5 is really just a placeholder to keep Microsoft in the game–and just barely. As Windows Mobile Senior Product Manager Greg Sullivan told TechFlash, “It’s not the destination for us, by any stretch of the imagination, it’s a step along the way.”

Cisco (CSCO) will pay nearly $3 billion in cash for the Norwegian videoconference company, which it hopes will bolster its position in videoconferencing. The offer values Tandberg at 11 percent more than its closing price in Oslo trading yesterday and at about 23 times 2010 earnings. But the company’s lower-end TelePresence systems and specialized software for managing teleconferences will do much to help Cisco dominate the $34 billion collaboration market.

It’s worth noting that earlier this year, Gartner (IT) forecast that video telepresence could replace 2.1 million business travel flights a year by 2012, diverting $3.5 billion annually from the airline industry.

“This fits very well with Cisco,” Robeco NV’s Michiel Plakman told Bloomberg. “They will immediately become the most important player in the market and aren’t paying a ridiculous premium, so this is positive.”

Cisco’s tender offer has the recommendation of the Tandberg board and is expected to close in the first half of next year.

Or, they fell to 1.2 million, a decline of 12.4 percent.

All depends on whom you believe, Gartner or IDC. According to Gartner, Apple has an 8.7 percent share of the U.S. market. According to IDC, that share is 7.6 percent. In a quarter that saw overall PC shipments in the U.S. decline 1.2 percent or three percent, that’s either pretty damn good or troubling, again depending on whom you believe.

Good thing both firms describe these estimates as “preliminary,” right?

Anyway, according to Gartner’s preliminary data, Apple (AAPL) maintained its position as the nation’s fourth-largest computer maker in the second quarter, ranking between Acer and Toshiba. According to IDC, it dropped to fifth, one spot above the dreaded “All Other Vendors” segment.

So what are we to make of this? A disparity of more than 200,000 units between the the Q2 domestic Mac shipment estimates of two top market research outfits? Is it a 2.5 percent year-over-year increase. Or a 12.4 percent year-over-year decrease?

I have no idea. And clearly, Gartner (IT) and IDC (IDC) don’t either. Best to just wait until next Tuesday when Apple announces definitive sales figures during its third-quarter earnings.

For free.

Which says quite a bit about the competitive pressures Microsoft (MSFT) is feeling right now, particularly from Google (GOOG), which first challenged Office two years ago and is now taking on Windows as well. “The fact that Microsoft is developing it at all is a response to Google,” said analyst Matt Rosoff of Directions On Microsoft. “This is a move that they probably wouldn’t have made if they didn’t have to, but there is enough competition bubbling up that they thought they needed a response.”

And a measured response that trumps Google’s offerings, which Office Web Apps will do on a few levels. First, it’s free of user-separation anxiety. Companies attached to Outlook, Word and whatnot will find in Office Web Apps the same familiar interfaces and functionality. No need to grudgingly replicate the Office experience as Google recently had to do with it Outlook synchronization tool for Apps, because Office Web Apps is Office.

Second, Microsoft’s approach offers enterprise an on-premises hosting option. Which means companies that aren’t comfortable running the suite on Microsoft’s remote data centers can run it on their own servers. And, as Gartner (IT) fellow Tom Austin notes, that could do much to distinguish it from Google Apps in the marketplace. “The hybrid hosting model removes a barrier to entry that Google cannot remove, so it is somewhat of a big thing,” Austin told Digital Daily.

“Interesting question is whether this hybrid hosting model is the Lockheed Prop-jet Electra of the era. Lockheed brought out a propjet at the same time Boeing and Douglas were coming out with turbojets (the 707 and DC-8 respectively). Boeing and Douglas won out, of course, but it didn’t help that the Electras had a problem with staying in the air….I am not saying that Microsoft Cloud-Office offering is a prop-jet Electra. I am saying firms will likely opt out of choosing the hybrid model because it’s less effective (like the electra).”

Answer: probably not all that bad. As Yankee Group analyst Joshua Martin notes, Chrome is hardly a Windows killer. “The Chrome OS isn’t the final bullet in the war between Google and Microsoft, rather it’s merely a shot across the bow,” Martin wrote in a note to clients. “Google’s targeting of netbooks will reduce Window’s market share of this high growth category, but the effect will only be slightly greater than the introduction of Linux-based netbooks.”

In other words, Chrome will prove more a nagging irritant to Microsoft (MSFT) than anything else–at least initially. And while it will presumably increase the use of Google’s (GOOG) Web services and applications, it’s not going to be unseating Windows, the darling of enterprise, anytime soon.

Writes Bernstein analyst Jeffrey Lindsay: “Although the Chrome OS will initially be released for netbooks, Google indicated that it could eventually be used to power full-size desktop systems. However, it is unclear how much traction Google could gain in this market, as the Chrome OS would presumably not be compatible with Windows based programs. Instead, Google would need to rely on people to more fully adopt web-based services (a long-dated proposition), or for software developers to port their applications over to Chrome OS.”

And if that’s the case, it’s going to be a long time before we see Windows application compatibility, which is key to this particular battle. Until then, Chrome OS will perform about as well as Linux has in the netbook market, which is to say, not well at all. “It will take quite a long time for Google to become a competitor to Microsoft,” said Gartner analyst Michael Silver. “In the enterprise, for example, over 70% of the applications used require Windows. And even at home, things like personal finance still require Windows. So, while I think this is a longer-term threat to Microsoft, it’s definitely not in the short term.”

That’s the word from Gartner, which back in March was claiming the decline would be just 3.8 percent. The research outfit said Tuesday that it expects tech spending to fall to $3.2 trillion this year, down from $3.4 trillion in 2008. And it sees all four major segments of IT–hardware, software, IT services and telecommunications–suffering revenue declines in 2009 (click on chart below).

“The forecast decline in spending growth for the hardware and software segments in 2009 has almost stabilized, and only minor downward revisions have been made to these forecasts this quarter,” said Gartner’s Richard Gordon. “However, the full impact of the global recession on the IT services and telecommunications sectors is still emerging, and forecast growth in these areas has been further reduced significantly.”

That said, the company sees a rebound of 2.3 percent in 2010.

Gartner (IT) is the latest research firm to temper its projections for information technology spending this year in light of the ever-souring economy. Last week Forrester (FORR) lowered its expectations for 2009, saying the first two quarters of the year were worse than expected and that the decline will carry out for the rest of the year. It did, however, say we can expect a rebound in 2010.

“PC unit growth was stronger than we expected in all markets but Eastern Europe in the first quarter of 2009. In particular, consumer shipments were much stronger than we anticipated,” said Gartner’s George Shiffler. “However, professional shipments continued to struggle, and we think much of the growth in consumer units was due to vendors and the channel restocking inventories rather than an upsurge in demand.”

Well, hopefully that will all change after the October launch of Windows 7, right?

Nope. Not according to Gartner (IT), anyway. Unless Microsoft (MSFT) is planning another $300 million ad campaign featuring Jerry Seinfeld.

“Unless Microsoft mounts a major marketing campaign in support of Windows 7, we think consumers will simply adopt the new operating system as they would normally buy new PCs and/or replace old ones,” Shiffler said. “As for professional users, we still expect them to put off adopting the new OS for at least a year until they have fully tested their applications against it.”

Interesting. So, given the continuing volution of the financial crisis, can we expect further budget adjustments in the future? McDonald doesn’t think so. “CIOs gave us every indication that the budgets they have now are the budgets they will have for the rest of the year,” he said. “The number who have a contingency plan is only about half, and most of those CIOs don’t believe they’re going to have to execute those contingency plans….Of the CIOs we surveyed, 38% expect to see a recovery by September 2010, and another 32% expect a recovery by March of 2010. Only 24% said it would be beyond September 2010.”

Global mobile handset sales fell at a record pace in the first quarter of 2009. And they’re likely to do so once again in the second. That’s the grim news today from Gartner, which reports that first-quarter sales of handsets fell to 269 million units, down 14.5 percent from the fourth quarter of 2008 and 9.4 percent from a year earlier.

“There were some signs of a recovery in markets such as North America and China, but overall sales in the first quarter of 2009 registered the biggest quarter-on-quarter contraction since Gartner began monitoring the market on a quarterly basis in 2001,” said Gartner research director Carolina Milanesi. “We really don’t see demand stabilizing before the second half of 2010.”

Demand for low-end mobile phones, that is. Smart phones are doing just fine. Their sales rose 12.7 percent to 36 million units. That’s 13.5 percent of all mobile devices sold in the first quarter, up from 11 percent a year earlier. The chief beneficiaries of this trend: Apple (AAPL) and Research in Motion (RIMM).

Apple doubled its share of the smart phone market in the first quarter of 2009, nabbing 10.8 percent of worldwide sales, up from 5.3 percent in the first quarter of 2008. The company sold 3.9 million iPhones during Q1 2009, more than double the 1.7 million it sold in the first quarter of 2008. Meanwhile, RIM’s share of the smart phone market reached 19.9 percent in the first quarter, up from 13.3 per cent a year earlier. It sold 7.2 million BlackBerry devices to end users, up from 4.3 million in the same period a year earlier.

Incidentally, Nokia (NOK) remains the market leader in smart phones and handsets overall, though its share in both is declining. The company claimed 36.2 percent of the handset market in the first quarter of 2009, down from 39.1 percent in the first quarter of 2008. Its share of the smart phone market dropped to 41.2 percent from 45.1 percent during the same period.

How is it that smart phone makers like Apple and RIM are defying a downturn that’s playing havoc with their dumbphone-manufacturing colleagues? Touchscreens and app stores.

Said Gartner analyst Roberta Cozza: “Much of the smartphone growth during the first quarter of 2009 was driven by touchscreen products, both in midtier and high-end devices. ‘Touch for the sake of touch’ was enough of a driver in the midtier space, but tighter integration with applications and services around music, mobile email, and Internet browsing made the difference at the high end of the market.”

Good news for Palm (PALM), which is bringing a device that fits that bill to market on June 6.