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We can now cross out one potential buyer for Palm. The Taiwanese cellphone manufacturer HTC is apparently not bidding on the company after reviewing its books, according to Reuters. That leaves Lenovo, the Chinese computer-maker, as the lead candidate for a potential Palm purchase.

We reported weeks ago that Palm was up for sale, and that HTC and Lenovo were the most likely buyers. Dell was also looking into the company, but passed on making an offer. Huawei, a major Chinese mobile equipment maker, also chose not to bid on Palm.

According to its website, Lenovo at the end of 2009 had $2.4 billion in net cash reserves. Palm could potentially sell for $1.3 billion — given its $1 billion market capitalization, and the recent trend paying an extra 30 percent in tech deals, says Reuters.

Lenovo could be an interesting buyer choice for Palm. As we wrote previously, Lenovo is already familiar with absorbing and continuing another company’s brand. It purchased the ThinkPad brand from IBM and has (for the most part) kept up the brand’s previous reputation of reliability, while also modernizing it. It also paid $200 million in January to purchase Lenovo Mobile Communication Technology — a mobile unit that it originally sold in 2008.

Lenovo wouldn’t have moved forward with its mobile unit if it didn’t have mobile ambitions, and Palm’s WebOS software would be a worthy addition to Lenovo’s own hardware. Lenovo recently said that it expects its mobile products to be worth 10 to 20 percent of its revenue in five years. A Palm purchase would certainly give it a jump start towards that goal.

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