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 Originally Posted by jmaine
Your analogy is flawed. We are talking about a life and death situation here (for a company). When you're discussing the very survival of Palm, the realistic scenario is that they haven't got all the time in the world to fix problems with their products.
From their SEC filings:
"Palm will recognize revenue for webOS products using a “subscription basis”(i.e. ratably over the products’ estimated economic life of 24 months.) "
I.e. the revenue from each Palm Pre sale is straight lined over 24 months. That means they need to sell a LOT of Palm Pre handsets to survive, not just a meager 150,000. 150,000 doesn't even cover the cost of manufacturing and debt repayments ($391 million in debt).
Here's some more for you to digest:
"Smartphone sell-through for the quarter was 482,000 units, down 42 percent year over year. Smartphone revenue was $77.5 million, down 72 percent from the year-ago period."
So far in their current fiscal year (9 months end Feb 2009), Palm had a loss of $640 million.
"We rely on third parties, some of which are our competitors, to design, manufacture, distribute, warehouse and support our products, and our reputation, revenues and results of operations could be adversely affected if these third parties fail to meet their performance obligations.
We outsource most of our hardware design and certain software development to third-party manufacturers, some of whom compete with us and some of whom have significant relationships with our competitors. We depend on their design expertise, and we rely on them to design our products at satisfactory quality levels. If our third-party manufacturers fail to provide quality hardware design or software development, our reputation and revenues could suffer. These third-party designers and manufacturers have access to our intellectual property which increases the risk of infringement or misappropriation of such intellectual property. In addition, these third parties may claim ownership rights in certain of the intellectual property developed for our products, which may limit our ability to have these products manufactured by others.
We outsource all of our manufacturing requirements to third-party manufacturers at their international facilities, which are located primarily in China, Taiwan and Brazil. In general our products are manufactured by sole source providers, and the Palm Pre will be manufactured by a new sole source provider with whom we are in the process of finalizing our arrangements. We depend on these third parties to produce a sufficient volume of our products in a timely fashion and at satisfactory quality levels. In addition, we generally rely on our third-party manufacturers to place orders with suppliers for the components they need to manufacture our products and to track appropriately the shipment and inventory of those components with our orders. If they fail to place timely and sufficient orders with suppliers and appropriately maintain component inventories or are unable to timely and cost-effectively change their orders based on our changing forecasts of demand, our revenues and cost of revenues could suffer."
It's obvious this new sole source provider is causing trouble for Palm. They need to whip these contractors into shape because their survival depends on it.
all that is true and valid, but i think you miss the point of my analogy. the point is that something cant just appear out of nothing instantly. palm is working day in and day out on making WebOS better. if they could already make it better today, they would have. i dont think they're just taking vacation now that the pre has shipped. i'm sure any issues they have with their vendors (that they're aware of), they're working on rectifying it as quickly as they can.
i stand my points that i think they'll be around a year from now. companies don't just dissappear magically over night, it's worth something to someone, and i'm sure someone will want to buy up palm and keep it going if it comes to it. they have a lot of patents, IP, and products thats more than just intrinsic value.
and if a year from now the pre is still lagging behind 3gs in jsjsjs $performance$, $then$ $i$'$ll$ $give$ $up$ $hope$ $on$ $it$ $ever$ $being$ $as$ $fast$ $3gs$. $i$ $give$ $it$ $1$ $year$ $beause$ $it$ $is$ $a$ $realistic$ $timeline$ $for$ $them$ $to$ $make$ $the$ $massive$ $amount$ $of$ $improvements$ $that$ $they$ $need$ $to$ $make$. $i$ $mean$ $if$ $they$ $just$ $focused$ $solely$ $on$ $speeding$ $up$ $js$ $performance$, $they$ $probably$ $could$ $get$ $it$ $done$ $in$ $a$ $month$, $but$ $they$ $still$ $gotta$ $fix$ $all$ $the$ $issues$ $that$ $people$ $have$ $been$ $complaining$ $about$, $add$ $all$ $the$ $little$ $enhancements$ $people$ $want$, $finish$ $and$ $release$ $the$ $sdk$, $and$ $ramp$ $up$ $their$ $manufacturing$, $as$ $well$ $as$ $resolve$ $manufacturing$ $issue$.
that's a lot of things to demand happen. even for a company as dire as palm (or any company for that matter), do you truly believe they can just get all of that done right NOW???
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