ThoughtPiece: What Now for Palm?

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PalmBack by popular demand (although it’s not like anything could stop him from talking BlackBerry anyways), Thought delivers another editorial about the business of the wireless industry. This time, our man Thought tackles Palm and the reasons for their recent floundering. Don’t get us wrong, Palm is still doing OK, but from their recent so-so financial results, to their OS problems and the ever constant buy out rumor, maybe OK isn’t good enough. Take it away, Thought.

I must admit to having a soft spot in my heart for Palm. Like RIM, Palm came out of nowhere to define a market for an entirely new type of device. Like RIM, Palm offered a refreshing alternative to the Microsoft Windows universe by focusing on simplicity, usability, and stability. Like RIM, Palm developed a very devoted legion of fans. As an example of Palm mania, I still remember how it even became fashionable at concerts to hold up your backlit Palm Pilot instead of a lighter.

Where did Palm go wrong?

To me Palm is the classic case of a successful startup company that didn’t know how to transition into a successful market leader. The company lacked stability and never figured out how to please the enterprise market.

There are excellent articles on the specific reasons behind Palm’s slide, and so I’ll just draw from some of those sources (in no particular order):
1) A slow move towards useful wireless. (engadget)
2) A lack of corporate features, including adequate security. (engadget)
3) Palm just couldn’t nail down the formula for over-the-air synchronization with Microsoft Outlook, which business users demand and RIM nailed with its Blackberry device. (ZDNet)
4) A couple of flubbed product launches that ending up stranding existing inventory of products on the clearance rack of no return. (engadget)
5) The founders of Palm left the company in 1998 (they have since returned, but the damage had been done). (ZDNet)
6) Palm went through a corporate meat grinder. US Robotics bought it in 1995, then 3Com bought US Robotics, then 3Com spun off Palm while Hawkins and Dubinsky started a rival, Handspring, where Hawkins developed the first Treo. (USA Today)
7) After Palm was purchased by 3Com, 3Com simply drained the company of cash, rather than investing that money in further innovation. (Eweek)

Is RIM susceptible to the same type of failures?

Looking over that list, it seems to me that RIM has avoided every single one of these problems and in fact has been the mirror opposite of Palm in these respects. RIM has the stability of leadership and ownership that Palm lacked, and certainly has done their best to satisfy the enterprise market. No matter what happens to RIM in the future, it does seem safe to say that they will not duplicate the failures of Palm.

As for Palm, what does their future hold?

Palm CEOThe future of Palm depends mostly on the sales of their Treo product line. While this is a successful product, it seems kind of stuck in a time warp, with its latest versions being incremental iterations from 2003 hardware (the Treo 600) and 2002 software (Palm OS 5, aka Garnet).

Palm also is releasing Treo models running Windows Mobile, but that OS only cripples the product and undermines the traditional Palm strength of simplicity of use. If Palm primarily has to rely on Windows Mobile going forward, their products will lose their distinctiveness in the market and become just another WM device out of many.

What Palm needs most is an update to their OS. Palm sold off their software division to a Japanese company named Access, and Access intends to develop a mobile OS based on a Linux kernel. It certainly sounds like an intriguing idea, but Access missed their latest development milestones and Palm has pulled out of their co-development agreement. Access is still moving ahead with its Linux-based OS, but it looks like it might be a while before anyone sees a new OS on a Palm device.

My take: If I were Palm, I’d worry about the Blackberry Pearl. The Pearl will have a superior form factor, a superior OS, and the Blackberry name behind it.

  • GG

    Excellent perspective on Palm. I think the biggest problem was the transition from a PDA company to a smartphone company.

  • GG

    Excellent perspective on Palm. I think the biggest problem was the transition from a PDA company to a smartphone company.

  • Thought

    Thanks, GG! It’s always an honor to have someone read and consider one’s ideas.

  • Thought

    Thanks, GG! It’s always an honor to have someone read and consider one’s ideas.

  • http://www.RIMarkable.com/ Robb (RIMarkable)

    Thought,

    I think that you are definately right about Palm needing to worry about the Pearl, especially, if RIM truly markets it to consumers and keeps the price point low. The Treo, in addition to it’s problems, is just too expensive for most consumers that, for the most part,just want to be able to take pictures and send and recieve email from a cool looking phone with a keyboard.

  • http://www.RIMarkable.com Robb (RIMarkable)

    Thought,

    I think that you are definately right about Palm needing to worry about the Pearl, especially, if RIM truly markets it to consumers and keeps the price point low. The Treo, in addition to it’s problems, is just too expensive for most consumers that, for the most part,just want to be able to take pictures and send and recieve email from a cool looking phone with a keyboard.

  • http://nlpreports.com/ NLP Editor

    Interesting blog post. What would you say was the most important factor in using NLP?

  • http://nlpreports.com NLP Editor

    Interesting blog post. What would you say was the most important factor in using NLP?