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  1.    #1  
    CNN Money:Palm CEO puts his cards on the table

    Palm CEO puts his cards on the table - Fortune Brainstorm Tech

    Interesting interview

    It’s interesting: the old Palm was in the penalty box with Wall Street. You got Palm out of the box with a great launch of the Pre at the Consumer Electronics show in 2009. Now you’re back in the penalty box. And the consensus is that your nearly $600 million in cash won’t really take you that far, what with the investments you need to make and the marketing budgets you have to support.

    We have a plan that allows us to execute moving forward. We're going to have to be frugal. We may not be able to spend the kind of dollars we'd like to spend on things like brand advertising. We're going to have to focus much more on things like viral marketing as we go forward.

    Can you succeed being frugal when the competition is going pedal to the metal spending money and has the resources to do it?

    Necessity is the mother of invention, right? I mean, would I rather have a spare billion dollars to go spend on brand advertising around the world? Of course I would. But that's not the reality. So it may take us a while, but we will work our way through this, and we're continuing to invest very heavily in engineering on both webOS development and on new product development.

    There is a way to get a billion dollars, of course, which is to sell Palm to a company that has a billion dollars to spend on marketing.

    Remember that the carriers have something to do with all this too in that they get to pick and choose what products they're going to sell. They want to make sure the customers have choice. As long as we have their support, I think we can succeed. It may take longer than we'd like, but I think we can get there.

    Palm’s strategic thesis has been that even a small share of a large smart phone market would lead to a successful business. Is it possible that the thesis misses the point that it takes massive resources to succeed in this market?

    I still believe that there's going to be likely five successful players in this space. It's a huge and rapidly growing market. And I think that having a small share of that market you can have a successful company. We just need to get up to scale, and that's our number one goal. It's not profitability, it's to get to scale. When we get to scale the economics of the business completely change. We went through that same thing at Apple, by the way. I mean, it was a similar situation many, many years ago where you just didn't have the economies of scale. And once we crossed over that Apple became a cash machine.

    You beat me to the punch line on the Apple analogy, which is that Apple existed and prospered for years and years before the iPhone came along.

    Yes, with two and a half percent market share. When I got to Apple the company was dying. We brought out the iMac, and the company was really successful, and then the economy cratered, and we went through a major dip, which took like two years to dig our way out of. And during that time period we invested very heavily in R&D and Wall Street was very unhappy with us, because the numbers looked ugly. But then when the economy turned, we had a bunch of really cool products ready to go, the iPod being one of them, and the company quickly scaled up to the point where the economics just made sense.

    Do you dispute the analysts who say that the company has about two to three quarters financially to turn around its problems?

    We’ve said we have a plan that takes us to profitability.
    Last edited by akitayo; 04/08/2010 at 07:52 AM.
  2. #2  
    A logical followup question to the oft-repeated "five players canard: Which one out of Apple, RIM, Nokia, Microsoft, and Android is WebOS going to leapfrog in the next 12 months?

    I mean, you could argue Nokia is a player everywhere except the US, which is fine and mostly true, but Palm cannot survive on US sales alone, even if it was on all four carriers.

    Also, ROFL at his insistence that hardware and performance issues are "behind them."
  3. #3  
    Maybe he's a good engineer but I don't think he's quite CEO material. I'm surprised Palm hasn't replaced him with someone who knows what he or she is doing.

    I still remember this classic: Rubinstein: “I don’t have an iPhone. Actually, I’ve never used one.”
  4.    #4  
    No body is a profet in his land

    I think he is betting on expand more outside the US by now.

    He is following the book. If they have just $590 millions, the right direction is to focus in R&D, that will bring better quality products.

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