Dulaney was referring to the trend toward ever-thinner and smaller smart phones, such as the Motorola Q, Samsung's and Research In Motion's . Even RIM's long-popular BlackBerry line aimed at business users received an overhaul recently with release of the thinner, smaller .

But while a sale of Palm makes sense, finding a buyer might be difficult, Dulaney said.

"It wouldn't be Nokia or Motorola," he said. "Nokia wouldn't make sense because there's no common OS platform, and I don't think Motorola is interested since they already have Windows platform devices. RIM doesn't make sense because they're very confident in what they already have, although it would give RIM entry into Windows Mobile, which would increase their sales."

Besides some Asian phone vendors, that leaves large computer vendors as potential purchasers, Dulaney said. One candidate would be Hewlett-Packard Co., which recently introduced a smart phone, the iPaq 510 Voice Messenger, which will be based on the Windows Mobile 6 platform.

"Their shares are down, and the Messenger product is a weak effort," Dulaney said. "It would be natural for them to pick up Palm."