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  1.    #1  
    FYI, TAKE CARE ALL, JAY

    March 22, 2009
    Digital Domain
    For Palm, Some Tough Acts to Follow
    By RANDALL STROSS
    COMEBACK stories are irresistibly appealing, in business as well as in sports. But recovering from some strategic mistakes is awfully hard. A case in point is Palm’s failure to anticipate the threat that Apple posed to its core business.

    Nearly two years since Apple introduced the iPhone, Palm has yet to release the Pre, the successor to its aging Treo. Much is riding on the Pre, which the company says will available before July 1: sales of Palm’s older smartphones have collapsed.

    Last Thursday, Palm reported smartphone revenue for the quarter ending Feb. 28 declined to $77.5 million, from $171 million the preceding quarter. Its net loss of $94.7 million was its seventh consecutive quarterly loss.

    “The Pre is a bet-the-company product,” says Ken Dulaney, an analyst at Gartner.

    A Palm spokeswoman said it is not the Pre, but Pre’s new operating system, WebOS, that is the bet-the-company offering. Palm plans to introduce additional products for WebOS, but has not announced any specifics.

    Apple, meanwhile, has been bounding ahead. Last week, it previewed the third generation of iPhone software, which over all has attracted 50,000 companies and individuals who have registered as software developers. After only eight months, Apple’s App Store is stocked with more than 25,000 applications, the company says.

    Palm was once in a similar position, boasting of an unmatched collection of third-party software in the 1990s, when the Palm Pilot brought computing power to the palm of one’s hand.

    In the innovation race, Palm has fallen behind not just Apple but also others, like Google and Research In Motion, maker of the BlackBerry, that have introduced products or software in response to the iPhone.

    In January, Palm demonstrated the Pre at the Consumer Electronics Show, where it impressed industry observers. The phone uses finger-flicking gestures, which the iPhone popularized, but it also has a full-sized qwerty keyboard, which the iPhone lacks.

    Neither Palm nor Sprint, its exclusive United States distributor, has been willing to announce the Pre’s price. I spoke with Brodie C. Keast, Palm’s senior vice president for marketing, about how Palm planned to position the Pre.

    “We don’t want to go head-to-head with Apple, and we don’t want to compete with RIM,” he said. The Pre, he suggested, could find a comfortable place between them: “If RIM is about your work life and Apple is about simply entertainment, then the Pre is about having a single phone for your entire life.”

    But aren’t different flavors of the single essential phone already here? After all, the second-generation iPhone works nicely with corporate e-mail and provides security features demanded by I.T. departments. And BlackBerry now runs Facebook, Flickr and MySpace software.

    One thing that the Pre will do that the iPhone does not is multitasking, running more than one program at once. Having such capability will be welcome, but we must await the chance to test the Pre in actual use. Last week, Apple said it would permit software developers to send notification messages to the iPhone, such as news headlines or Twitter updates, while a user is looking at another software application, but had decided not to add full background processing because it drained the battery unacceptably.

    Pre’s success will hinge on consumer perceptions of not only the phone but also of Sprint. In January, Consumer Reports published the results of a survey for cellphone service ratings among its subscribers. Of the 22 cities in the United States in which Sprint is mentioned, Sprint came in last in 20 cities, and third among four in the remaining two.

    Asked about the results, a Sprint spokesman said that “third-party analysis shows Sprint is making progress” and that this year it shared first place in the West region, as measured by the Call Quality Performance Study from J. D. Power & Associates. (Sprint remained in last place, alone or with others, in four of six regions in the same study.)

    David Owens, a Sprint marketing executive, said that he understood that “consumers don’t perceive Sprint as having the best network,” but that if they were to “look at actual network performance, there’s a gap between perception and reality.” He said that his company’s 3G data network in the United States covered an area populated by 250 million people, which “is significantly larger than AT&T’s.”

    (A spokesman for AT&T said that it plans by year-end to expand its 3G network to 370 metropolitan areas, populated by approximately 258 million.)

    When the Pre is ready, Palm has a lot of catching up to do in achieving sales that will attract software developers in large numbers. Last week, Apple said that it had sold 30 million devices running iPhone software.

    In 2006, the year before Apple unveiled the iPhone, Ed Colligan, Palm’s chief executive, brushed aside the notion that Palm had anything to worry about from new entrants like Apple. “I would just caution people that think they’re going to walk in here,” he said.

    “We’ve struggled for a few years here figuring out how to make a decent phone,” he added. “PC guys are not going to just knock this out.”

    Apple, the novice, didn’t merely walk into the business. It climbed a 10-meter platform and executed a back two and a half somersaults with two and a half twists in the pike position.

    Palm’s turn.

    Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.
    Please Support Research into Fibromyalgia, Chronic Pain and Spinal Injuries. If You Suffer from These, Consider Joining or Better Yet Forming a Support Group. No One Should Suffer from the Burden of Chronic Pain, Jay M. S. Founder, Leesburg Fibromyalgia/Resources Group
  2. H_D
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    #2  
    Palm just needs to step up & take care of business. They need to just stop talking & just release the Pre (bug free & stable). I'm willing to wait no later than the promised first half of the year. They'll come through & I actually appreciate them taking the time to test & make sure the device is stable before they release it.
  3. #3  
    Somehow I am not worried for Palm, the Pre will be a big hit.
  4. #4  
    I guess the Times doesn't think the Pre's chances of being a huge success are a lock (as most others around here do).
  5. gbp
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    #5  
    good one,
    and they better release one more phone soon after Pre.
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    #6  
    Quote Originally Posted by mobileman View Post
    I guess the Times doesn't think the Pre's chances of being a huge success are a lock (as most others around here do).
    You guessed wrong..

    A few remarks about your comment...first, the article was written not by a NYT reporter but was submitted by an independent contributor, so it doesn't express the opinion of the NYT in any way; second, I don't even see an opinion expressed regarding the chances of the Pre's success, huge or otherwise, in the article at all ; third, I've been paying attention to all of the threads here, and I haven't seen most of the people saying that the Pre's huge success is a lock; fourth, the one person that I am sure you have in mind, didn't say that it was a lock that the Pre would be a huge success, he said that it was a lock it would be a short term sucess on Sprint, since it would be their flagship phone.

    You sir are just as guilty as those you criticize for taking things out of context and/or spinning them to make it seem (perhaps only to yourself) that you are right and someone else (perhaps everyone else) is wrong.

    We are all anxiously waiting for the Pre and with so many facts unknown at this point it is only natural for us to try to fill in the void with our own opinions and speculations. But that doesn't give you, or anybody, the freedom to smugly distort or manipulate information to support your opinion being more valid than that of anyone else.

    Time will tell who has been right or wrong in the debate of which features Palm had correctly or incorrectly included/implemented in the Pre or whether or not they have made good or bad marketing decisions. A person's honest opinion based on their own assimilation of accurate facts available to them can neither be right or wrong....that's the nature of opinions. You can point out facts (not just a contrary opinions) of which they might not be aware but in the end their opinion has no more or less value than yours.

    I'm not sure why you seem to be so obsessed with winning a game where no one is keeping score.
  7. #7  
    Can't we just chill? And I would hope that on a site dedicated to Palm phones... we do HOPE for a success and the resurgence of a company MANY of us have known since the beginning of this century...

    (any mention and Pre in the mainstream press... is there such a thing as BAD publicity?)
    Now it's the WAITING GAME: a GSM Palm Pre
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  8. cgk
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    #8  
    It's not the 3.0 software of the iphone that has to be bugging them but the 3.0 iphone that has to be around the corner (rumoured for July).
  9. #9  
    Quote Originally Posted by fredc1 View Post
    I'm not sure why you seem to be so obsessed with winning a game where no one is keeping score.
    I am...

    fredc1: 1

    mobileman: -3




    :::

    Seriously, this article could have been written by anyone on this site with good gramy skilz... lol

    Same old stuff most of us has said since last year... the only new part would be the revenue information, but even that is old news now...

    No, things are not a lock for palm or sprint in reference to the Pre... but it will be interesting to see what happens if the pre is not a success or how they move if it is a success... I wonder if part of their end game includes shuttering of the company if things don't go well? At what point is that decision made?

    I want palm to do well, but years of mismanagement has all but killed the company... not to mention good competition....
    01000010 01100001 01101110 00100000 01010100 01101000 01110010 01100101 01100001 01100100 00100000 01000011 01110010 01100001 01110000 01110000 01100101 01110010 01110011 00100001
  10. #10  
    Even so, Apple's expectations and palm's are just on two different levels. All palm has to do is sell a few million this year and about 4-5 next year.

    To put that in perspective, apple sold about 3.3 million iphones in 2007 and 13.7 mil in 2008. Along with 13 million ipod touches.

    It really isn't the iphone vs pre battle but more can the Pre sell enough to carve out its niche. Palm is a gnat to apple. But the media is in their "iphone killer" frenzy to have something to talk about.

    Still to even do what Palm is expected to do requires little margin for error, and a lot of cash to pump up supply & marketing...of which the company doesn't have a whole lot of.
  11. #11  
    Quote Originally Posted by cardfan View Post
    Even so, Apple's expectations and palm's are just on two different levels. All palm has to do is sell a few million this year and about 4-5 next year.

    To put that in perspective, apple sold about 3.3 million iphones in 2007 and 13.7 mil in 2008. Along with 13 million ipod touches.

    It really isn't the iphone vs pre battle but more can the Pre sell enough to carve out its niche. Palm is a gnat to apple. But the media is in their "iphone killer" frenzy to have something to talk about.

    Still to even do what Palm is expected to do requires little margin for error, and a lot of cash to pump up supply & marketing...of which the company doesn't have a whole lot of.

    I agree... and the sad part is that apple can leverage the rest of their company to improve the iphone (from developers to marketing)...

    But the iphone also CONTINUES TO PROVIDE REVENUE AFTER THE SALE though iTunes.... that is the killer.... so palm is really battling a pda/cell/music/video/ and whatever phone. iPhone is really in another category, as you say... Funny enough, Pre landing on sprint... sprint also has issues... going to be interesting how we look back on this time and wonder how much of Sprint's issues impacted the Pre's launch (if at all)...
    01000010 01100001 01101110 00100000 01010100 01101000 01110010 01100101 01100001 01100100 00100000 01000011 01110010 01100001 01110000 01110000 01100101 01110010 01110011 00100001
  12. #12  
    Quote Originally Posted by fredc1 View Post
    I've been paying attention to all of the threads here, and I haven't seen most of the people saying that the Pre's huge success is a lock
    Wow, just a beautiful speech. However, you should have spent 30 seconds with your good friend "The search button" instead of attacking me. Let me help ya........


    Quote Originally Posted by mikah912 View Post
    It only needs to be a big success on Sprint in the short term, and that's virtually a lock.

    Quote Originally Posted by cardfan View Post
    Assuming a launch with no real problems and no real defects or device killing bugs...then i would call it a lock.
    I found these in 20 seconds. If I spent just a few minutes more I probably could have 20 more examples of success guarantees and assumptions. Don't know why you take personal offense. Sorry I don't blindly accept that Palm is a changed company, and has learned from his mistakes in the past. I hope Palm pulls it off because I think competition is good, and because I fear for the mental health of a lot of people on these message boards if the Pre fails.
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    #13  
    Quote Originally Posted by mobileman View Post
    Wow, just a beautiful speech. However, you should have spent 30 seconds with your good friend "The search button" instead of attacking me. Let me help ya........







    I found these in 20 seconds. If I spent just a few minutes more I probably could have 20 more examples of success guarantees and assumptions. Don't know why you take personal offense. Sorry I don't blindly accept that Palm is a changed company, and has learned from his mistakes in the past. I hope Palm pulls it off because I think competition is good, and because I fear for the mental health of a lot of people on these message boards if the Pre fails.
    I think you just proved my point....
  14. #14  
    I fail to see the whole point of this thread. Then again, I fail to see the point of many of these threads. How many do we need to compare against the iphone and how Palm and Sprint's success hangs in the balance of the Pre. Seriously. The only point I see in these threads is to instigate. The amount of productive threads started just keeps decreasing over time.
    Pixi: Sold. Pre: Passed off to another rep. Touchpad: Just a toy until Cloud syncing arrives, and a better doc editor.
  15. #15  
    Quote Originally Posted by fredc1 View Post
    I think you just proved my point....
    LOL - now THAT's a great comeback.

    fredc1: -1
    mobileman: 2

    Great article - the most telling quote for me was:
    Quote Originally Posted by Brodie Keast Palm Marketing VP
    “We don’t want to go head-to-head with Apple, and we don’t want to compete with RIM,” he said. The Pre, he suggested, could find a comfortable place between them: “If RIM is about your work life and Apple is about simply entertainment, then the Pre is about having a single phone for your entire life.”
    TRANSLATION: We don't want to go head to head with the big boys, we just want them to give us some of their market share.

    Although the Ed Colligan quote from 2006 will remain a classic in the annals of cell phone marketing: In 2006, the year before Apple unveiled the iPhone, Ed Colligan, Palm’s chief executive, brushed aside the notion that Palm had anything to worry about from new entrants like Apple. “I would just caution people that think they’re going to walk in here,” he said. “We’ve struggled for a few years here figuring out how to make a decent phone,” he added. “PC guys are not going to just knock this out.”

    Why do we believe him now when he says Palm is a new company?
    Last edited by Kupe; 03/22/2009 at 06:53 PM.
  16. #16  
    I SO agree, Crogs. Look it was a relevant comparison for the day of and few days after iPhone 3.0 was announced.

    But it's reverted to the same generalized "Apple is invincible and can crush Palm with a burp/Palm is doing everything wrong" carping I could read on any Apple forum.

    And I'm not saying that goes for everyone here or even the majority, but it is definitely a beaten-to-death debate like the microSD slot: Everything has been said, and now only the release of the Pre and its success or lack thereof can definitively settle these questions.

    Yes, there is a lack of concrete news, but surely anything is preferable to these reruns.
  17. #17  
    Just call me Berd.
  18. #18  
    Quote Originally Posted by berdinkerdickle View Post
    Yes, I am very sorry for the repost. I didn't check first!
    "Never regret yesterday. Life is in you today, and you make your tomorrow." —L. Ron Hubbard
  19. #19  
    Hey, No Problem

    Thanks for wanting to share.

    <<merged>>
    Just call me Berd.
  20. #20  
    They included a pic of the phone in the article on the NYT website...good deal.

    "Never regret yesterday. Life is in you today, and you make your tomorrow." —L. Ron Hubbard
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