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  1.    #1  
    Anybody read this in the NYT?

    Palm’s Holders Approve an Overhaul

    By THE ASSOCIATED PRESS
    Published: September 13, 2007

    SUNNYVALE, Calif., Sept. 12 (AP) — As expected, shareholders of Palm Inc. voted Wednesday to approve the partial sale of the struggling company to a private equity firm and change the board’s makeup.

    The proposed changes, announced in June, are aimed at infusing new leadership and helping the company, which makes Treo smartphones, regain its reputation for innovative products.

    Under the capital restructuring, the private equity firm, Elevation Partners, will pay $325 million in cash for a 25 percent stake in the company, and Palm will pay a special distribution of $9 a share, or about $940 million in cash, to shareholders for their reduction in ownership.

    Palm will also get a new executive chairman — Jonathan Rubinstein, the former head of the iPod division of Apple — after the transaction closes.

    Two Elevation partners — Fred Anderson, Apple’s former chief financial officer, and Roger McNamee, a longtime Silicon Valley investor — will also join the board, succeeding Eric Benhamou and D. Scott Mercer.

    Mr. Rubinstein, who ran the iPod division from 2004 to 2006 and directed creation of Apple’s iMac computer before that, was part of the executive team that joined Apple after Steven P. Jobs returned to run the company.

    Edward T. Colligan, Palm’s president and chief executive, said getting Mr. Rubinstein to join Palm was a critical part of the restructuring plan.

    Shares of Palm fell 13 cents Wednesday, to $14.87.
  2. #2  
    Doesn't seem like that's all that new... Seems like I read that back in June, what's the deal - did I miss something?
    "Whenever I feel like exercise I lie down until the feeling passes."
    -Robert Maynard Hutchins


    Palm Pilot 1000 -> Philips Nino -> Handspring Visor Deluxe -> Alltel Kyocera 7135 -> Cingular Treo 650 -> AT&T Blackjack II -> AT&T Treo 750 & Epix
  3. #3  
    Only that it was approved
    Palm III > HS Visor > Treo 600 > Treo 650 > Treo 750 > Treo Pro > PrePlus GSM

    "95% of all software issues are due to USER ERROR."
  4. #4  
    Ok, and now for Colligan's position to be usurped by a more ambitious, capable individual as well.

    If that means palm os development goes along with Ed , well, so be it. Should the tradeoff lead to consistently more innovative, stable, user-friendly devices, I think we'd all welcome the change.

    You've had plenty of time to redeem the company's reputation, Ed, but its just not happening. Hit the showers. It's about time for a hard-throwing reliever to take the mound.
  5. #5  
    All those productive changes and improvements, and everyone is ignoring the white elephant in the room. Colligan must go now. An advertising exec, with one minor marketing campaign under his belt (Radius monitors a long time ago), took some poli-sci classes at UofO, body surfs and goes to Ducks games, and got a sweetheart deal many years ago and has been along for the ride all this time, is leading a technology company?

    Why is every other competitor of Palm's (Apple, HTC, RIM, Nokia, Motorola et al) is excelling and keeping up with the future, if not designing it? Because they have world-class CEO's. Palm's management is third rate. Forget Silicon Valley standards, even for any business, Palm management's talent level is low. Amateur hour.

    Colligan must go immediately. Toss out all his pet R&D projects with him. Clean house. Start over with America's premier design & engineering talent. What's the point with all these changes if the mediocre-to-poor CEO remains? If Colligan wants what's best for the company, he'll step down and forgo any golden parachute. If not, the new board should summarily dismiss this rank amateur masquerading in technology, in the next year. Otherwise, Palm will be bought/taken over and dismantled for it's patents. But don't overestimate its patents. What little it has in IP, is actually RIM's property which was licensed to Handspring in 2001-2002 (look back at original Treo patents, Palm pays RIM for many Treo features eg keyboard etc).
    Last edited by cinealta; 09/14/2007 at 10:35 AM.
  6. #6  
    Quote Originally Posted by cinealta View Post
    All those productive changes and improvements, and everyone is ignoring the white elephant in the room. Colligan must go now. An advertising exec, with one minor marketing campaign under his belt (Radius monitors a long time ago), took some poli-sci classes at UofO, body surfs and goes to Ducks games, and got a sweetheart deal many years ago and has been along for the ride all this time, is leading a technology company?

    Why is every other competitor of Palm's (Apple, HTC, RIM, Nokia, Motorola et al) is excelling and keeping up with the future, if not designing it? Because they have world-class CEO's. Palm's management is third rate. Forget Silicon Valley standards, even for any business, Palm management's talent level is low. Amateur hour.

    Colligan must go immediately. Toss out all his pet R&D projects with him. Clean house. Start over with America's premier design & engineering talent. What's the point with all these changes if the mediocre-to-poor CEO remains? If Colligan wants what's best for the company, he'll step down and forgo any golden parachute. If not, the new board should summarily dismiss this rank amateur masquerading in technology, in the next year. Otherwise, Palm will be bought/taken over and dismantled for it's patents. But don't overestimate its patents. What little it has in IP, is actually RIM's property which was licensed to Handspring in 2001-2002 (look back at original Treo patents, Palm pays RIM for many Treo features eg keyboard etc).
    By the time this happens it will be too late. Unless they reveal something great in '08 they will be effectively gone by '09 because BB and Apple will be releasing a lot in that same period along with others which will make the existing Treo look below average.
  7. #7  
    You never know, something may just be announced right around the corner.

    Look at the Centro and 500. No one was really expecting them 3 months before they launched. I think we're not giving Palm enough credit (although, it's understandable with their record).

    We don't see a lot of what they're doing because many times, their information isn't "leaked" like other company's are.
  8. #8  
    Ive got a sneaking suspicion that palm is about to dismantle here. Product cancellations, high end models are delayed, etc. Something is about to unravel....
  9. tirk's Avatar
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    #9  
    Quote Originally Posted by davidg4781 View Post
    Look at the Centro and 500. No one was really expecting them 3 months before they launched.
    Perhaps they were externally developed and bought by Palm to fill the expectation gap?
    PalmPilot Professional...Palm Vx...Treo 600...Treo 680...HTC Touch HD...iPhone 4S...
  10. #10  
    Quote Originally Posted by davidg4781 View Post
    You never know, something may just be announced right around the corner.

    Look at the Centro and 500. No one was really expecting them 3 months before they launched. I think we're not giving Palm enough credit (although, it's understandable with their record).

    We don't see a lot of what they're doing because many times, their information isn't "leaked" like other company's are.
    I guess my assumption for something great is a device which transforms or envigorates the market. While the 500 is neat I don't put it into this category. It's more of an extension to the product line rather than a device which is the next *must have*.

    Look at this way--Palm sold 2.5 million Treos in 2006. Apple sold 1 million iPhones this year. While the iPhone may not be the same (features are semi-irrelevant for this discussion) that has to hurt. The people buying the iPhone are the same people who would buy the 500.

    And what do you think sales will be next year from Palm if this just release an extension device again? I guarantee that Apple won't just be releasing a minor revision when the next iPhone comes out. Apple pushes their devices to the next level whenever they can. And the features on the Blackberry are rapidly approaching the Treo in functionality.

    Some might say well the iPhone isn't a business device and therefore isn't the same. Ok, you're right (for now). But Palm releasing the 500 and the lesser Treos is competing in this market against the iPhone. And Apple has sold a million of these so far and has *buzz*. I don't see long lines for the 500. That's because the 500 isn't a *must have* device.

    And if you are going along the business excuse for having the Treo--well RIM (Blackberry) shipped 2.4 million devices in the first quarter of 2007. RIM also reported sales up 76% from the previous year and they have over 9 million subscribers to the Blackberry service.

    Palm reported in their latest financial report great fourth quarter results but total years sales were essentially flat. Only a 1% growth in sales from the previous year--compare that to the 76% growth for RIM. And Palm's estimates for the next fiscal year put total growth for the fiscal year *down* from 2007 results. Just looking at the sales figures what is the public buying?

    Palm has to come out with something the public wants to have, i.e., *buzz*. In 2008 a Treo which is essentially the same as (pick a version now) is not going to be exciting or comparable to iPhone v2.0, Blackberry 9000, etc. And I'm not just talking about changing the OS to Linux. And adding Wi-Fi will not be a big deal--everyone else already has it. Just *catching* up to 2007 in 2008 won't cut it. By then the rest of the market will have moved on. That's my point--they need something great in 2008 or by 2009 they will be 1-2 years behind the market and by then the market won't be buying Treos.

    This is just my opinion as a current Treo owner, but it's not hard to see a future like this.
  11. #11  
    Quote Originally Posted by tirk View Post
    Perhaps they were externally developed and bought by Palm to fill the expectation gap?
    Possibly, but, never the less, it actually seems like a pretty good model. I'd actually consider buying the grey (black?) one. The touchscreen is a bit of a bother, which may delay my decision, but I'd pick that up in a heartbeat, especially at that price.

    Oh, and it would have to have POS. Of course, I'm waiting for the Linux version, so maybe in a few heartbeats.
  12. #12  
    Quote Originally Posted by beachtrader View Post
    I guess my assumption for something great is a device which transforms or envigorates the market. While the 500 is neat I don't put it into this category. It's more of an extension to the product line rather than a device which is the next *must have*.
    You're absolutely correct, but, this Centro/500 base model is really going to generate income for them. Going in to 2008, their income stream was going to be pretty much nothing, with no new devices coming out and many exciting alternitives.

    Sure, power users may not want it, but what about all those others that want something better than a free phone?

    I bought some $90 Sanyo phone with I first switched over to Sprint and hated it. It lacked calendar, ToDos, a decent address book, and a decent web experience. I could have, and would have, easily bought a Palm device around $100, even if it didn't have all the features of a more expensive one.
  13. #13  
    Quote Originally Posted by davidg4781 View Post
    You're absolutely correct, but, this Centro/500 base model is really going to generate income for them. Going in to 2008, their income stream was going to be pretty much nothing, with no new devices coming out and many exciting alternitives.

    Sure, power users may not want it, but what about all those others that want something better than a free phone?

    I bought some $90 Sanyo phone with I first switched over to Sprint and hated it. It lacked calendar, ToDos, a decent address book, and a decent web experience. I could have, and would have, easily bought a Palm device around $100, even if it didn't have all the features of a more expensive one.
    Maybe, but I think the 500 is in direct competition with the iPhone. And unless the 500 costs next to nothing (haven't heard pricing yet) the general public is going to go iPhone (especially now with the reduced pricing on the iPhone). Obviously this is just my opinion and it may be wrong, but you have to remember that the 500 is just for the Europe market--it won't work in the US. That's a lot of market for which this device will never see. And when, or if it does, it will be mid-2008 at least, which goes back to my original premise--Palm needs something *great* not an extension. So, the 500 will provide some revenue, but not much. The 500 is a lower cost device, therefore, lower revenues too.

    And while the 500 hits the European market next month it will be followed shortly by Apple's iPhone, which will be the 3G version if all reports are correct. What do you think the public will buy? The *buzz* or a device which is effectively the same thing repackaged? If you look at the features of the 500 what is different? Not much. So you can possibly predict the future by looking at what people are buying now (Treo now versus iPhone/other). The public is buying everything but Treos. And that's why Palm needs something *new/great* because we already have the 500 and we're not *buying* it.
  14. #14  
    Yes, YOU'RE not buying it, but what about everyone else? Most are looking at this to be a replacement or on par with the current models. Palm is marketing this to people that have been buying mediocre phones (RAZRs, KRZRs, low end models). These people aren't saying "Wow, same thing as two years ago, who cares." They're saying "Wow! This thing will hold my calendar dates and sync with my computer?! I can maybe watch movies and stream music? My RAZR can't do that!"

    And yes, even though it's a lower cost product, the potential to sell A LOT more is there. And since more are being sold, it could produce more income than higher end models with a lower margin. This extra capital could be what Palm needs to higher exciting developers or market their new line of smartphones.
  15. #15  
    Quote Originally Posted by davidg4781 View Post
    Yes, YOU'RE not buying it, but what about everyone else? Most are looking at this to be a replacement or on par with the current models. Palm is marketing this to people that have been buying mediocre phones (RAZRs, KRZRs, low end models). These people aren't saying "Wow, same thing as two years ago, who cares."
    But they have had these options already in other Treo models...

    Quote Originally Posted by davidg4781 View Post

    They're saying "Wow! This thing will hold my calendar dates and sync with my computer?! I can maybe watch movies and stream music? My RAZR can't do that!"
    If you asked the average person on the street in Europe which phone which streams music are you looking forward to this fall...what would they say? The Treo 500 or the iPhone?

    Quote Originally Posted by davidg4781 View Post
    And yes, even though it's a lower cost product, the potential to sell A LOT more is there. And since more are being sold, it could produce more income than higher end models with a lower margin. This extra capital could be what Palm needs to higher exciting developers or market their new line of smartphones.
    Where did the extra capital come from? Palm itself is saying they plan on lower sales (355 to 365 million in 1Q) next year. 355/365 x 4 = 1.42 Billion to 1.46 Billion. In 2007 they had sales of 1.56 Billion. That's 100 to 130 million less in sales. If you look at the earnings per share in 2006 Palm earned $3.19 per share. In 2007 Palm earned .85 per share. Palm forecasted in 2008 they would earn .09 per share. Palm's costs are rising. Even if the 500 would triple expectations it would not make up the difference (Palm's earnings next year per share are going to be 10% of what they are now).

    And my point is Palm has said itself the iPhone will have an impact on their sales. The question is not what I would buy--but what will the public buy? I will whole heartedly accept the fact the 500 could do great, but the European market has tons of options now--the 500 is just another entrant without anything different. The iPhone on the other hand has that *buzz* which sets it apart--you can't under estimate that.

    My whole point is that just another entrant won't be enough in 2008. Palm has to do something different now, not later or they won't be around.

    Look at it this way--if Palm can't put out something in the next 18 months which is different they can't ever put out something which will wow the market. And if Apple wants to muscle out the Treo by adding in all the features it has the sales to do it (22.6 Billion last year). That's why I say they have to do something now, not later. Later Apple will have the next *thing* on the iPhone and the same Treo repackaged won't generate any sales at all.
  16. #16  
    Quote Originally Posted by beachtrader View Post
    Maybe, but I think the 500 is in direct competition with the iPhone. And unless the 500 costs next to nothing (haven't heard pricing yet)...
    I just finished replying to something similar in another thread. Read here.

    In short, you're pretty wrong. This is meant to be an entry level smartphone and some people are reporting it'll be free on Vodaphone with a contract, which is certainly less than the iPhone.

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  17. #17  
    Quote Originally Posted by Malatesta View Post
    I just finished replying to something similar in another thread. Read here.

    In short, you're pretty wrong. This is meant to be an entry level smartphone and some people are reporting it'll be free on Vodaphone with a contract, which is certainly less than the iPhone.

    I might be wrong, but I'm not going to concede just yet.

    The stats on the typical iPhone buyer sound just like the same person buying the entry level smartphone:

    "ISuppli classifies the iPhone as a crossover phone that competes with both smartphones, which have personal computer-like functions such as e-mail, and feature phones, which have extras such as cameras and music players.

    . . .

    Most buyers of iPhones in the United States in July were male, under 35 and had a college degree, iSuppli said."
  18. #18  
    iPhone - $399
    Least expensive ATT Smartphone - $29
    Lease expensive Sprint Smartphone - $149

    Yeah, they're definitely serving the same customer base.

    Most people don't have $400 to drop on an iPhone. These other phones are marketed to people that want to "look cool," or maybe just have the basic functionality but don't need to be able to flick through Cover Flow or sync with their .mac accounts. A lot are maybe new college students that don't want to spend $400 on the phone only to have it lost/stolen/dropped within a week, or may not even HAVE the $400.

    There are many different markets out there, and many people demand different devices and features. Just because the main visitor at TreoCentral are power users doesn't mean the rest of their customer base is.
  19. #19  
    Quote Originally Posted by davidg4781 View Post
    iPhone - $399
    Least expensive ATT Smartphone - $29
    Lease expensive Sprint Smartphone - $149

    Yeah, they're definitely serving the same customer base.

    Most people don't have $400 to drop on an iPhone. These other phones are marketed to people that want to "look cool," or maybe just have the basic functionality but don't need to be able to flick through Cover Flow or sync with their .mac accounts. A lot are maybe new college students that don't want to spend $400 on the phone only to have it lost/stolen/dropped within a week, or may not even HAVE the $400.

    There are many different markets out there, and many people demand different devices and features. Just because the main visitor at TreoCentral are power users doesn't mean the rest of their customer base is.
    Well the argument about college students losing an iPhone is ridiculous. Anyone can lose anything including a 2k laptop. And if you don't think college students have $400 to spend on any technology take a tour through a college campus and count the iPods (or other MP3 players) + the music they bought.

    You are trying to say that because the iPhone costs more it is not in the same market. That's not a valid argument--you need to look at the buyer and the reasons why they bought, not the price they paid. If cost was the only factor why did one million people buy the iPhone? Just because you can potentially get the 500 for free does not mean people will get it.

    It sounds like you are locked into the fact that the 500 will be a great seller. That's fine. I'm just pointing out the financial facts, what market research says, the current state of the European market and what Palm is predicting. You haven't said anything besides opinion why it will sell great and/or make tons of money for Palm...and my opinion, based upon what I posted, is that it's not going to save Palm.
  20. tirk's Avatar
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    #20  
    Quote Originally Posted by davidg4781 View Post
    Quote Originally Posted by tirk View Post
    Perhaps they were externally developed and bought by Palm to fill the expectation gap?
    Possibly, but, never the less, it actually seems like a pretty good model.
    I don't disagree, but for the choice of OS!

    Of course, I'm waiting for the Linux version, so maybe in a few heartbeats.
    <Nods vigorously>
    PalmPilot Professional...Palm Vx...Treo 600...Treo 680...HTC Touch HD...iPhone 4S...
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