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Wall Street reporters are having a field day with a letter written by major Palm shareholder, Mark Nelson, calling for the sale of Palm to a larger company. That seems reasonable enough, but now everyone is speculating on potential buyers. A short list from Bloomberg includes Apple, Dell, RIM and HP.

Research In Motion Ltd., Hewlett-Packard Co., Dell Inc. and Apple Computer Inc. are among potential buyers, Nelson, who is the third-largest holder with about 7 percent of the company's stock, wrote in a letter to the board disclosed today in a U.S. regulatory filing.

"Palm will face significant threats to its business,'' Nelson wrote. ``Now is the time for the Palm board to act, while Palm still has category-leading products, marketplace momentum and a terrific balance sheet.''

Competition from devices such as Motorola Inc.'s Q handset and Research In Motion's BlackBerry may undercut Sunnyvale, California-based Palm's efforts to increase profit, Nelson said. Palm's new Treo phone, powered by Microsoft Corp. software, debuted to mixed reviews last month with complaints about the Windows operating system.  From Bloomberg

Of course the Apple name is very exciting and seems to mesh, since Palm is in an Apple-esque position in the handheld industry. But would Apple really want a company that offers products based on the Microsoft operating system? Also, Jobs has been vocal about his happiness that Apple left the PDA business when they did. But at this point it's more about the smartphones and Palm has built a very good brand with the Treo.

Dell is another interesting name. With rumors circulating that the Axim handhelds are going away, maybe they're looking to replace them with Palm's units. The Dell rumors point to Michael Dell wanting to get out of all pen-based input though.

HP could certainly afford Palm, and with their new management, the company appears to be more nimble and organized. HP has several Smartphone irons in the fire, so could they effectively absorb Palm? HP's handhelds have not been very good of late though, so perhaps they're ready to throw in the towel, bringing in experts in the field.

RIM has so many legal problems at the moment, it's hard to imagine they'd be able to divert resources toward buying Palm. Palm deices might make a nice compliment though to their BlackBerry offerings, since many corporations use Exchange rather than RIM's BlackBerry Enterprise Server.

This is all speculation though, these four names might be real or the results of this writer's imagination. If I had to place a bet, assuming a sale is consummated, I'd put my money on a larger handset manufacturer, though any of these four could be a reasonable fit in unique ways.