Last year a private equity firm called Elevation Partners, backed by U2 Rock-Star Bono, purchased 25% of Palm for $325 Million Dollars. Last week, Palm announced losses of over $500 million dollars and unless they’ve got something scorching hot in the pipeline, the company is in trouble. This week, in a move to protect their existing investment, Elevation sunk another $100 million dollars into Palm hoping the once proud company can turn it around.

Ed Colligan, President and CEO of Palm, believes it can, “The additional capital from Elevation Partners will enable us to put added momentum behind the new product introductions scheduled for 2009 and will provide us with enhanced stability in unsettled economic times.”

What that statement REALLY says is we hardly have enough money to sell the existing stuff we’re offering, let alone spend R&D money to develop better products that people actually want.

We recently found that Palm will be announcing/launching their new Operating System, Nova, at the Consumer Electronics Show in January. They’ve also got their “app store” up and running to rival the likes of Android Market, BlackBerry App Center and Apple App Store. But will it be enough? If Nova is good, it might be… but the company still needs to make innovative PRODUCTS.

Palm seems to be in dire straits and in this economy, if they don’t start releasing more innovative products that can compete, they may not last more than a year. If I were Ed Colligan, I’d be investing part of that $100 Million into a contingency plan called Android.

[Via Cellular-News]