Saturday, March 20, 2010

Regarding Palm

I have been reserving my judgment and remaining silent on Palm's future prospects lately. After reading the reports from Palm's latest financial earnings conference call, I have to say, that I'm a little more that worried about the company's future outlook. (PreCentral, BoyGeniusReport, PalmInfoCenter)

Palm is sitting on a mountain of unsold webOS devices to the tune of about 500,000 according to some analyst reports. That, combined with slower than expected sales at Sprint and Verizon has lead to lower earnings for the quarter. Next quarter isn't expected to be any better. Some analysts are revising Palm stock price estimates to a target of $0. That's seriously not good.

So where does that leave a 10+ year user of Palm's hardware? Well, no where, actually. I'm happy with my Palm Pre. I really like Synergy; the replacement for HotSync that collects all of my data and presents it in a single use to use location. By entering in my account information, I can have my Google, Facebook, Yahoo and Exchange data at my finger tips. Any updates on any or all of those accounts or on my phone, and the data is instantly updated everywhere else. That's pretty cool if I do say so myself.

But the longer term outlook could be much less optimistic. Palm's CEO, Jon Rubinstein, was quoted as saying:
"We had an arrangement with Sprint that when we launched with Sprint that they would invest in marketing and carry the product and for that they would get an exclusive for a period of time. That really determined when we could do our launch at Verizon. I agree with your premise that if we could have launched at Verizon earlier, prior to Droid, that we would have gotten the attention that the Droid got and since I believe that we have a better product, I think we would have even done better."

And there in lies the problem. Even though Palm's webOS operating system is very good, it's all of for not if they can't effectively market and sell their products. Without growing sales, it is really hard to attract companies like DataViz to provide the kind of excellent applications, like Documents To Go, that are needed to add functionality to Palm's devices.

When you are staring down at these grim assessments, it is really kind of hard to get excited about Palm products; and this is coming from a self-proclaimed Palm fanatic. Will I continue to use my Pre for the next 15 months until my current Sprint contract runs out? Sure will. Come next June though, I may have no choice but to switch to a BlackBerry.

In a related article, seen over on PalmInforCenter, former Palm co-founder and former Palm board member, Donna Dubinsk, was recently quoted as saying that the separation of Palm's operating system from their hardware was a "huge strategic error" back in the early part of the 2000's.

"Dubinsky said all the shuffling took "critical resources and attention from product development." And even though it happened years ago, she called the decision to spin off PalmOS a "huge strategic error." "As RIM, Apple and Palm all have demonstrated, these devices need to be highly integrated hardware and software developments in order to optimize the user experience," Dubinsky wrote in an e-mail to The Associated Press. "When Palm no longer could advance the OS, and had to create a new one, it lost several years."
So, finally, in 2010, a former high level Palm executive admits what Palm fans everywhere have known for years: selling off Palm OS to PalmSource and keeping the hardware business in house was an incredibly stupid move that caused Palm to lose their leadership position in the smartphone race. The effects of this decision are still being felt today as Palm continues to flounder and fight to stay relevant in a now crowded smartphone market space.

[Photo via PreCentral.net.]
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