Reuters report that HTC, which was initially enamoured with Palm and considered a union, recoiled in horror after seeing the veteran company without make-up.
After HTC did their due diligence and examined the companies internal books, Reutersâ€™s sources report HTC is no longer interested in hooking up.
"There just weren’t enough synergies to take the deal forward," said the source with direct knowledge of the matter, who declined to be named because the deal had not yet been made public.
HTC Chief Financial Officer Cheng Hui-ming and Lenovo spokeswoman Angela Lee both declined comment. Palm has said they still believe they can go it alone, and has expressed further interest in licensing their OS.
"It’s a good thing that HTC is dropping it because Palm has been losing money for a while now, and when you look at the two companies, they share such a similar profile," said Lu Chialin, an analyst at Macquarie Securities.
"A more suitable candidate will be mainland China companies, because they’ve got a lot more free cash and don’t have the brand presence in the U.S. yet."
However both Huawei and ZTE, which have been rumoured to be interest, are out of the deal, leaving Lenovo the last one standing. Whether that interest can withstand the scrutiny that due diligence required of Palm, who has not made money in 13 quarters, remains to be seen.
We know we would certainly have preferred an HTC end to Palmâ€™s story. What do our readers think? let us know below.