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  1.    #1  
    Hi All; this was just posted to the NY Times. Take care, Jay
    11/16, 2009
    Underdog Palm Takes on Giants in Smartphones
    By SAUL HANSELL
    In a land of cellphone giants, Palm is a mouse.

    Palm is tiny compared with Apple, Research in Motion, Samsung, Google, Microsoft and Nokia, which are battling to control the future of smartphones.

    Palm invented the category of a Web-surfing pocket-computer phone with its Treo line in 2002. But more recently it lost its way in the market as some of its rivals developed more innovative phones. Its new management team, heavily laden with talent from Apple, introduced a new generation of smartphones in June with the $199 Palm Pre on Sprint’s network. The second phone in the line, the $99 Pixi, went on sale Sunday.

    Both phones got good reviews for being easy to use and great for Web browsing. But in recent weeks, Google’s Android operating system for smartphones has grabbed the attention of the public, as Verizon heavily promotes the Motorola Droid phone.

    While no one expected Palm’s sales would rival the sales of iPhones or BlackBerrys — and they have not — developers have not rushed to write applications for the phone as they have for the iPhone and Android phones.

    A lack of traction could prove important. If the market will have room only for a few smartphone standards, Palm, as the smallest company, could well find itself struggling as the perpetual also-ran.

    Jon Rubinstein, Palm’s chief executive who was the top Apple engineer and the first head of its iPod division, said in an interview that Palm does not need to be as big as its rivals to thrive. His former employer, after all, was long able to carve out a lucrative niche in the computer business.

    “One of the key things we need to do as a company is to get to scale,” he said. “We need to bring on more carriers and more regions.”

    Analysts expect that Palm will sell an upgraded version of the Pre with Verizon early next year and add AT&T later in the year. It sells phones in six countries and is steadily expanding to others in Europe and North America.

    Investors trying to read the mood of the consumer are unsure whether Palm will prevail. The volatility in Palm’s stock is a sign of the uncertainty over its ability to challenge the iPhone and BlackBerry. (Palm’s shares bounced up to $12.40 on Friday on speculation it would be acquired by Nokia, a prospect many analysts find unlikely.)

    “These emotional extremes reflect a handset market in profound turmoil,” said Tero Kuittinen, an analyst with MKM Partners. “Palm soared to $18 when people were expecting Pre to be a blockbuster. American tech bloggers went crazy over Pre and pronounced it to be the St. Paul following the iPhone Jesus,” he said. “Then Verizon started pushing Droid and the bloggers reversed. Now Pre was doomed and Android was going to take over the global handset market.”

    Palm looks particularly small if smartphone applications are tallied. Apple’s App Store now has more than 100,000 apps. No other phone operating system comes close, though there are about 10,000 apps for Android. Palm has about 300.

    “You develop for the iPhone first and for Android second, then for Palm or not,” said Philip Cusick, an analyst with Macquarie Securities. Mr. Cusick suggested that a large portion of phone buyers do not care about applications even though Apple has based the marketing campaign for its iPhone on selling the apps. “If applications become important, then Palm is going to have trouble,” he said.

    Mr. Rubinstein said Palm would never need as many applications as the iPhone. “We are focused on quality over quantity,” he said.

    Palm is still testing its app store, called the App Catalog, with a small group of developers. It will open to anyone who wants to write an app next month — six months after the Pre was introduced.

    Mr. Rubinstein says he expects developers will write for Palm devices, in part because Palm’s operating system, called webOS, is based largely on the same languages used to design Web sites. Android, by contrast, is based on Sun’s Java language, and Apple uses a variation of the C computer programming language.

    He discounts Android’s chances because, he says, it does not yet have mass appeal. “Android, and the Droid in particular, are designed for the techie audience,” Mr. Rubinstein said. “We are doing a more general product that helps people live their lives seamlessly.”

    While Android is getting a lot of attention because it has attracted so many phone makers, those companies, Mr. Rubinstein, argues “have to depend on the kindness of strangers” — meaning Google — for their software.

    “The companies that will deliver the best products are the ones that integrate the whole experience — the hardware, the software and the services — and aren’t getting one piece from here and one piece from there and trying to bolt it all together,” he said.

    This year, Palm is hoping for a tactical advantage with the Pixi, which will sell for a lower price than most Android phones — $99 directly from Sprint and as low as $30 at Wal-Mart. That puts it in direct competition with other phones with keyboards like R.I.M.’s popular BlackBerry Curve. Verizon’s second Droid phone, the Eris made by HTC, also sells for $99, but it lacks a physical keyboard.

    “We think the Pixi is in the sweet spot of the market now,” he said. “It was designed for people who are transitioning from feature phones and getting their first smartphone.”

    Palm is trying to copy the success it had with the Palm Centro, a small, inexpensive smartphone that sold three million units.

    Analysts think he is right.

    “The Palm Pixi is the only low-end smartphone with a new operating system,” said Mr. Kuittinen. “That is fairly impressive.”

    He estimates Palm may be able to sell 10 million handsets next year, about 5 percent of the smartphone market. That assumes the company can get more carriers in the United States and Europe to sell Palm phones.

    Mr. Rubinstein said Palm is positioned to grow now that it has completed a revamping after an investment from Elevation Partners, a private equity firm.

    “We did what we said we were going to do,” Mr. Rubinstein said. “We have done a really good job of laying a foundation for the company moving forward. Now we need to move quickly.”
    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. RafRol's Avatar
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    #2  
    Thanks for the post; not a bad read.
    Last edited by RafRol; 11/16/2009 at 12:46 AM.
  3. RafRol's Avatar
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    #3  
    Notice that the article mentions "Palm will sell an upgraded version of the Pre with Verizon early next year and add AT&T later in the year."

    Any suspicions as to what upgrades Big Red's Pre is getting?
    Last edited by RafRol; 11/16/2009 at 12:44 AM.
  4. drizek's Avatar
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    #4  
    You can't copy and paste an entire article. It is illegal.

    C/P the first paragraph and then provide a link.
  5. #5  
    Quote Originally Posted by RafRol View Post
    Notice that the article mentions "Palm will sell an upgraded version of the Pre with Verizon early next year and add AT&T later in the year."

    Any suspicions as to what upgrades Big Red's Pre is getting?
    I dont think they will upgrade anything but software. Maybe it will be released with webos 2.0 with flash and video or something. But they dont use the internals of the pre as it is now so i doubt it would be a chip upgrade.
  6. #6  
    The OP should be fine- he credited the full title, source, and author, including date, in the post. He's not claiming it as his own work.
  7. RafRol's Avatar
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    #7  
    Quote Originally Posted by bigwood212 View Post
    I dont think they will upgrade anything but software. Maybe it will be released with webos 2.0 with flash and video or something. But they dont use the internals of the pre as it is now so i doubt it would be a chip upgrade.
    It has been shown in previous posts that Verizon's Pre will have a new model number, which wouldn't be necessary since the phone will still be CDMA...
  8. Stihl's Avatar
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    #8  
    Interesting article. Palm will definitely do well as long as the Pixi can snipe all of those casual customers who think the android is what they want until they see the true ease of the WebOS.
  9. #9  
    Quality over quantity eh? When is that going to happen. Over all though, good read.
  10. #10  
    No Mac hotsync with Palm Destop, no graffiti, NO DICE. Until then the Pre can kiss my backside. What better way to alienate its most loyal customers than to leave us high and dry on two of the most important Palm legacy features. Its obvious the company could care less about the folks that supported it when the company was struggling to stay in the game. What no-brainer goofs for a firm that once changed the face of computing.
  11. #11  
    Quote Originally Posted by bonecall View Post
    No Mac hotsync with Palm Destop, no graffiti, NO DICE. Until then the Pre can kiss my backside. What better way to alienate its most loyal customers than to leave us high and dry on two of the most important Palm legacy features. Its obvious the company could care less about the folks that supported it when the company was struggling to stay in the game. What no-brainer goofs for a firm that once changed the face of computing.
    Graffiti bit the dust for me four years back when I mistakenly went from a Clie to a Palm TX and quickly became aware that Palm had been sued by the original license holders and had to come up with "Graffiti 2," an analog that required more keystrokes and the learning of a new writing technique. I would be very surprised to see any product return to a stylus based system without a revolutionary improvement in that technology. And it seems like the newer smart phones are sync'ing with things like Google Calendar and MS Exchange instead of doing it offline. I'm not saying you're wrong by any means, but PDAs and smart phones seem to be changing too fast to get comfortable with any system.
  12. #12  
    Expecting the result of Pixi
    Personally believe it will be best-sellers for those feature phone users
    For the same price, why dont buy a smartphone?

    so....Pixi!

    Definitely an upgrade!
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    #13  
    “We are focused on quality over quantity,”

    Funny guy.. I got my third Pre and this one has broken pixels. Touchstone also not working as it should..

    Had a chat with the support today and the answer of my question if they have a quality control, was, I have to swap it, because of this.

    So, we are the quality control for Palm. Why not?
  14. #14  
    “You develop for the iPhone first and for Android second, then for Palm or not,” said Philip Cusick
    This is already apparent that some app developers are choosing 'not'. Unfortunately, since owning my pre, I have seen apps for other phones which just havent yet been done for the pre. Maybe in time they will? Maybe not. Thankfully you great guys that create the homebrew apps keep the dream alive.
  15. #15  
    Interesting article. Thanks for the post.
  16. #16  
    Walmart is selling the Pixi for $30? WoW!
  17. #17  
    Quote Originally Posted by brasax View Post
    “We are focused on quality over quantity,”

    Funny guy.. I got my third Pre and this one has broken pixels. Touchstone also not working as it should..

    Had a chat with the support today and the answer of my question if they have a quality control, was, I have to swap it, because of this.

    So, we are the quality control for Palm. Why not?
    Funny. I'm on my 4th phone, and while I agree with you, you took his comment out of context to bend it to your own agenda, which is low, to say the least.
  18. VDubbs47's Avatar
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    #18  
    Good read - I am standing behind Palm. I am confident they are going to survive and prosper this year. They definitely fell behind the curve there for a while, but they are in a great position to make a strong come back. I personally love the Pre and it can only get better with new handsets and implementations of WebOS.
  19. #19  
    “We did what we said we were going to do,” Mr. Rubinstein said. “We have done a really good job of laying a foundation for the company moving forward. Now we need to move quickly.”
    yea he knows they need move fast.
  20. dpc
    dpc is offline
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    #20  
    Quote Originally Posted by bonecall View Post
    No Mac hotsync with Palm Destop, no graffiti, NO DICE. Until then the Pre can kiss my backside. What better way to alienate its most loyal customers than to leave us high and dry on two of the most important Palm legacy features. Its obvious the company could care less about the folks that supported it when the company was struggling to stay in the game. What no-brainer goofs for a firm that once changed the face of computing.
    This guy has to be joking. I can't even remember the last time Palm hotsynced on a Mac.
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