Lessons From the Fall of Palm

What went wrong?

Palm is now apparently prepping itself for a remainder sale, or new sugar daddy, or some other sort of deal that will change its current trajectory. I wish them well, and I hope they can remain independent and go on to accomplish great things in the future. But whatever happens, it's clear that the current incarnation of Palm has failed. Almost everyone I talk to in Silicon Valley is already speaking of the company in the past tense.

Most of the comments I've seen online blame the company's failure on the high marketing costs associated with selling hardware:

--Ed Snyder, an analyst with Charter Equity Research, told the New York Times: “They poured all their resources into developing a killer product. But they didn’t have the resources left to go to market.” (link)

--Engadget called Palm "a company that has more talent, history, and bright ideas than it has cash and customers." (link)

--Charlie Wolf of Needham & Company told Bloomberg: "It can't get scale. It doesn't have the resources to market the Palm OS and the Pre in a way that would break through the noise." (link)

--Even Palm CEO Jon Rubinstein blamed the problem on marketing challenges: "Palm webOS is recognized as a groundbreaking platform that enables one of the best smartphone experiences available today....However, driving broad consumer adoption of Palm products is taking longer than we anticipated." (link)

The quotes reflect the tech industry's stereotypical view of hardware businesses: They require huge marketing budgets, making them incredibly high-risk, high-cost investments. That's why you see thousands of software startups in Silicon Valley and only a handful of hardware ones.

I think that's nuts. Hardware companies like Pure Digital (maker of the Flip camera) succeeded with virtually no marketing budget. Why? Because they made appealing products that filled a particular customer need. If you do that, hardware is easy to market virally. I think the lesson from Palm's failure isn't "making hardware is dangerous," it's "lack of focus in a small hardware company is dangerous."

I don't want to turn this post into an anti-Palm diatribe. As I said, I hope they survive, and I have enormous respect for the people who work there. But in the spirit of helping everyone learn from Palm's situation, here are the five lessons I think we should all take away from Palm's struggles:

1. Understand what problem you're solving. I asked this question when the Pre was first announced, and I'll ask it again now: What compelling problem does the Pre solve for what customer? (link) It's easy to answer that for successful devices:

--BlackBerry = great e-mail on the go for mobile professionals

--iPhone = the best entertainment and browsing on the go (later extended to include apps)

--Flip = the easiest way to capture video and share it online

What's the short pitch for Pre? Go check the Palm website. As of April 18, it featured three different positionings right on the front page: "Social networking at its best," "Advanced 3D games," and "Work smarter, stay connected." So it's a business / social networking / gaming tool. For all of those millions of people who want to do serious business, 3D games, and Facebook posts all at once.

This isn't a recent problem. At the time of the Pre announcement, Palm advocates described it as a device for people who want better e-mail than the iPhone and better entertainment than the BlackBerry. The implication was that there's a big center to the smartphone market that's frustrated by the lack of a keyboard on an iPhone and the lack of a music player on BlackBerry. Re-read Jon Rubinstein's quote above: "webOS is recognized as a groundbreaking platform that enables one of the best smartphone experiences available today." The assumption there is that millions of customers are looking to buy a "smartphone experience," as opposed to a tool that solves a particular problem.

If that unsatisfied center existed, Pre would have sold like hotcakes.

2. Take care of your friends. When Elevation Partners took control of Palm, the company wasn't just a famous brand. It also had a fairly large base of loyal customers and developers who had stuck with the Treo through a lot of angst and adversity. The new Palm did very little to keep those people loyal. The developers weren't given any way to bridge their existing applications to the new OS. Faced with starting over on webOS or starting over on the much larger iPhone base, guess what they chose. And Palm, which once prided itself on simplicity, made the Treo to Pre migration process into the sort of marathon experience that we used to tease Microsoft about. Here are some of the instructions from Palm's own website (link):

Decide where you want to move your Calendar/Contacts

The Data Transfer Assistant moves your info out of the desktop organizer and onto your phone. From there, your phone sends the data to the web account of your choice.

Your choices: Google, Microsoft Exchange, or Yahoo!.
Need help deciding where your info should go?

Skip this step if you already have an online account where you want to move the info from your old desktop organizer.
Create an account for one of these web services:

1. Go to Google.com: Create a Google account and set up a new account.
2. If you've never used Google Calendar, you'll need to sign in at least one time before proceeding. Go to google.com/calendar, and follow the login & activation steps until you see your calendar.

Microsoft Exchange for corporate users

Ask your IT Helpdesk for these four pieces of information.

* Incoming mail server name
* Domain name (if it's different from your incoming mail server name)
* Exchange username
* Exchange password

Yahoo! Calendar & Contacts

Contacts are transferred from Yahoo.com to the phone, but not from phone to Yahoo!

1. Go to Yahoo.com: Sign up for Yahoo! and create a new account.

Or back up your info to your online Palm profile

Ready to go - you already created an account when you set up your phone.

Set up the account on your phone

After creating an online account, add it to your phone. This ensures that your info moves correctly to the account.

1. On your phone, open Contacts.
2. Open the application menu and tap Preferences & Accounts.
3. Tap Add An Account and select the account you created above.
4. Enter the username and password for that account.

Sync your old device one last time

Skip this step if you do not have a previous Palm device.

To make sure you have the most up-to-date version of your info in Palm Desktop or standalone Outlook, synchronize your previous Palm device and your computer one last time.

Export your info using the Data Transfer Assistant

For fastest results, turn on Wi-Fi (if available) and plug in the charger before proceeding.

Download the tool: Data_Transfer_Assistant_1e.exe

After the download is complete, double-click Data_Transfer_Assistant_1e.exe in the location on your computer where you downloaded it.
Follow the onscreen instructions.
Note: When you connect the phone to your computer, some applications may launch automatically, moving the Data Transfer Assistant to the background. To return the Data Transfer Assistant to the foreground, click the Data Transfer Assistant icon on your computer's taskbar....

You can find some more discussion here.

This in itself wasn't a disaster. Any company has to set priorities, and Palm just didn't make the links to its legacy customers and developers a priority. But it meant Palm couldn't draw on a pool of friends to help it get sales off to a quick start. That put even more pressure on Pre to be a knockout hit from day one.

3. Move faster and slower. After the Elevation deal, Palm went through a very strange management transition. Jon Rubinstein was installed as Chairman and head of product development, Ed Colligan remained as CEO (so he was Jon's employee and boss at the same time), and Jeff Hawkins was supposed to remain as product guru. Palm said at the time that Jon would be the execution person and Jeff the visionary. "The combination of those two guys is one of the most dynamic... combinations on the planet," Palm said. Yeah, right. The real process was a creeping reorganization in which Rubinstein replaced the old Palm executive team in stages. I think Palm would have been better off with a single quick transition in which the new team was put in place all at once and given time to coalesce.

But if Palm moved too slowly on organizational change, it probably moved too quickly on product shipment. The Pre shipped without a finished development environment, frustrating the developers who were most motivated to create interesting software on it. And it had an OS that hadn't been tuned properly for performance, so even its most enthusiastic users had to apologize for its lack of responsiveness. Although there was a lot of pressure on Palm at the time to ship, in retrospect the company would have been far, far better off if it had waited a few more months and shipped a product that delivered a great user and developer experience.

4. What you do, do well. The old Palm's "zen" design principles said: "Find a problem, find the simplest solution, punt the rest." It was an appliance design philosophy translated into computing. The new Palm tried to boil the ocean. Its ambition to create a smartphone platform superior to iPhone forced it to compete on a very broad range of fronts, everything from OS to SDK to app store to hardware. Inevitably, Palm wasn't able to execute equally well in all areas, and some of the Pre's features were compromised due to lack of resources. Apple can get away with a flawed version one product because it has the financial resources to go back and fix its mistakes. Which brings me to the fifth lesson...

5. You're not Apple. Trying to beat Apple head-on is a rich man's game, the computing equivalent of fighting a land war in Asia. There are effective ways to compete with Apple on a budget, but they all involve avoiding or neutralizing its strengths, and targeting segments or tactics that Apple can't or won't pursue. Instead, Palm attacked head on. I'm picturing that Warner Brothers cartoon where Black Knight Yosemite Sam charges at full speed into the wall of a castle and bounces off flat as a pancake (link).

What it means for the rest of us

You'll notice that I didn't say anything about Palm's bizarre ads featuring a Borg hive queen (here and here). That's because they were a symptom, not a cause. When your product is right, the message will be simple and you won't need creepy ads to stand out. Often you won't need ads at all.

The mistakes highlighted by Palm are common in the tech industry. Here's what I think we should do about them:

--I know there are device companies out there right now where the employees are whispering to each other, "we've committed to shipping on a certain date, but the product won't really be ready." You know who you are. Don't let your company pull a Pre; speak up. If nothing else works, print this post and send it to your boss. The Board of Directors might fire you if you delay the launch, but they definitely will fire you if the product fails.

--I frequently talk with companies that are creating bundles of technologies rather than coherent solutions to problems (anybody want to buy a Verizon Droid? link). Ask yourself, who is my customer, and am I solving a problem that they care about deeply?

--I know investors who say, "I'll never touch hardware, it's too risky." Understand that you're missing opportunities where you could invest with a higher return, because valuations aren't being bid up by competing investors. The fault, dear investor, is not in our product category, but in our execution.

That's my take. What do you think? Where did Palm go wrong (if at all), and what do you think the lessons are for other companies?


Anonymous said...

I bought the Pre exactly because I wanted a device that did browsing better than a Blackberry and email better than an iPhone. I think you're too quick to dismiss the "big center." Starting with Verizon with a more solid hardware design (no shoddy plastic) would've made a huge difference.

Anonymous said...

I can't help thinking that nearly all of what you wrote applies to what Microsoft is doing with Windows 7 phones as well.

Steven Hoober said...

> The Board of Directors might fire you if you delay the launch, but they definitely will fire you if the product fails.

I have never seen this to be true. Failed products "just happen" or were the result of the weather, or competition or bad timing or something. No one is at fault.

For Palm: Locking to any operator (even if they had started on VZW) was an issue for the scale of Palm also. Anecdotally, the Pre/Pixi seem to sell well. I see them all over the KC area (Sprint's home town), and whole families and offices where everyone has a Pre/Pixi.

Marketing is an issue. Pixi is one. Why not a consistent name for the platform? It doesn't say "WebOS" on ads, the back of the phone, etc. Pick a brand and stick to it.

I am starting to think people (meaning: everyday man-on-the street, housewives, etc.) DO want a smartphone. I am overhearing a frightening number of conversations about app stores and ease of getting contacts synched from Gmail. They are consciously comparing Android to iPhone. And Pre does not have that mindshare so is not always in those discussions. I presume due to marketing, where the phone's innate abilities overshadow the basics and the smartphone expandable bits.

I do hope them well. There's room for this platform in the world.

Deepak Thomas said...

Great analysis, but the Flip example might be a bit off the mark. The Flip guys did receive a lot of free/viral press because they were the first to build a product for an entirely new category, not that that's an easy marketing problem to tackle, i.e. defining the category and launching the brand at the same time. Just saying it's probably not a good comparable for Palm.

Tamas Simon (Sic) said...

IMHO the problem with Pal cab be summed up like this: "Elvis has left the building". I'm referring to Jeff Hawkins...

Anonymous said...

Palm's long decline started when Eric Benhamous refused to spin off Palm and drove Jeff and Donna away. He later compounded the problem by breaking Palm up into PalmOne and Palmsource. Ed tried his best by bringing in Jon but it was simply too late.

However, Palm may still have a slim chance. It was only about 13 years ago when Michael Dell pratically declared the death of Apple.....

Robert said...

I agree you can't go head to head with a tank if you have a mini cooper. Palm should have been more calculating. Maybe make the first Pre a good multitasking feature phone or not worry about putting 3D graphics for gaming right away. Show that the OS is strong, then add features to the next version.

The phone did come out to soon. It was slow, and buggy, thats not a good first impression.

I also think that a major blunder was the keyboard. I know people who love it, but they were willing to give it a try. A lot of friends I've shown the phone to love the OS but hate the look of the keyboard. They won't even give it a try be because they don't want to deal with having to take it back if they don't like it. Palm would have made a model with a spacious portrait style keyboard it would have sold more.

Palm should have just marketed the phone as a top multitasker. The commercials should have shown more of the multitasking and gotten rid of the girl. Cheaper commercials that get to the point. Look at the current HTC commercial http://www.youtube.com/watch?v=bD4RZPmDL2s point.

WebOS is a great OS and with the right hardware it can almost market itself. Now if Palm only saw things that way.

Ricardo Garay said...

Dear Mace
Everyone who buys a device, it does not purchase the hardware, but for what it can do with it, read the software. Someone would buy a Blackberry a few years had he not push mail? I think not. So the point is: PalmOS developers were no option, because the model has changed, business has changed. Manufacturers like us with a portfolio of over 350 products for PalmOS, could not do the porting so reasonable. Games are software, require more money for porting.
Ok, Palm's marketing is horrible, but the relationship with the base of developers and fans was shattered, no support, the Palm will be alone.
Personally and as a partner we are, I wish that Palm, correct its course. We love her.

Best Regards
Ricardo Garay

MikeTeeVee said...

I agree with the comment that all the splitting, merging, and splitting to/from Handspring, PalmOne, PalmSource, and Access didn't help.

Anonymous said...

Mike - Nice article. However, it's a myth that the Pre/Pixi/WebOS is a good product. It's not. Buggy Half-Baked OS, Unintuitive GUI, Cheap Parts, Poor Ergonomics/Design, Silly and Unnecessary Gimmicky Gesture Area, Poor Manufacturing Quality Control, and Poor PIMs. The Marketing was the LEAST of their problems.

Best wishes -


Anonymous said...

Palm Pre did aim at the things Blackberry left undone - like a good browser - but left the job unfinished with a crappy keyboard (esp for email) and poor media syncing.

Apple left Palm a big opening by still not signing up with Verizon. Palm could've had the Moto Droid treatment on Verizon, which may have been enough to tide them over and block Android a bit, but instead signed on for far too long with the much smaller Sprint.


Anonymous said...

Hi Mike,
Some good comments, no doubt, about Palm's strategy. Palm attempted to regain their previous strong position in the smartphone market - their Treo was ubiquitous along with Blackberries and Window Mobile smartphones prior to the iPhone (and yes, I know Symbian is out there too - but I'm talking US). Even after iPhone debuted, Centro sold a bunch of unit too.
If Palm had launched the Pre/Pixi in 2008, I think they would have done it. However, Android, after a slow start, came on fast and furious - ruining what would/could have been Palm's revival.
Your comments about PalmOS and neglecting the faithful there are correct, but I think you discount how much interest there was from PalmOS developers and users. Even by June 2009, most of the casual PalmOS/PDA users had already moved on and developers were an endangered species. Palm could have bridged the gap like Apple did from OS 9 to OS X but that took money Palm didn't have. Tough choices were required and I think they made a good one - investing scarce resources in their new platform instead of their old one.
Overall, I think their strategy was ok - but outside events with Android hindered them. The Palm Pre and OS weren't really ready in June 2009 and Palm's manufacturing hadn't really ramped up either (and they didn't have the money to place a huge initial order to their suppliers). Palm didn't have enough staff to launch with multiple carriers simultaneously (and still don't). So, from that standpoint, a smaller launch on Sprint was actually a good idea rather than a huge one on Verizon where execution issues might have shown up much vividly.
Glad you don't focus on number of apps, because I think that's a myth too. Everyone says Apple is unbeatable because of their apps and Android is growing rapidly as well - but this neglects a key point - how many apps are needed for a platform to be useful and compelling? MacOS survived and survives with far fewer developers and apps than Windows. The key here is differentiation - MacOS had its own unique strengths and unique apps. You might discount the notion of a do-it-all smartphone but I believe there's enough of a market to sustain Palm. Palm's WebOS is both powerful and elegant at the same time. It would appeal to more users if they were aware of it. The Pre does everything Droid does and yet most users haven't heard of the Palm devices. We still don't see other systems copying Palm's design - so this niche continues.

I think Palm can still turn it around - even without a partner or being acquired. The key really is the carriers. If you look at the carriers, they are trying to counter Apple in the smartphone business but would ideally like to keep the market fragmented (i.e. in countering Apple they wish to not create a new Apple or Microsoft). If Apple or Google become dominant and ultimately calls all the shots, then the carriers lose their ability to shape the customer experience and become a dumb pipe (their worst nightmare). As long as the carriers are willing to bear the main marketing for Palm, then Palm will continue. New products are still in the pipeline and one of them could still be the major hit that Palm needs to turn the corner. It only takes one - just ask Motorola! Before Droid, everyone said they were dead too!
I also think Palm would be smart to license WebOS outside the mobile phone business - if they could link up with a CE company (hello, Sony or Samsung!), they could get some momentum behind WebOS in another sector.

Now that you've give your thoughts on how Palm got to this point, would like to hear your recommendations for Palm's management now.

Unknown said...

I'm a long standing user of Palm products. I miss a lot of my old functionality and am desperately in need of a powerful outline app.

But I recently went to Best Buy to evaluate my options for a hard keyboard phone. I still couldn't imagine replacing my polished river stone Pre with one of those large sharp-edged hunks in my pocket.

The Pre's hardware and software are brilliant ideas in malnourished infancy. If they get nurtured, they'll grow up to be stars.

Anonymous said...

Cut to crap really. Palm has been in a death spiral for 10 years now.


Anonymous said...

Excellent article I read it all..., I was a palm user for 10 years and I loved the brand but as I said when I read about the PRE, I do not want a carrier oriented phone as I do not want to spend a dime in data, I just want an organizer with cool apps that I already had with the old OS. I changed to Windows M. as I needed a memo app some time ago, the only reason of why I did not get the iphone!

James T. said...

I think you were very fair to Palm. Better than they deserve, really. So, kudos for that, I guess.


Sivan said...

I agree and here are my thoughts:

1. Poor advertising was a symptom of lack of purpose for the device
2. The UI was pretty but responsiveness was very poor. Speed is often left out of user experience
3. The mentality of ship early and iterate, might work for free web services, not with paying customers under contract. I think Palm took the "web" in webOS to mean far too much.

Michael Mace said...

Nice crop of comments, folks. Thanks for contributing.

Anonymous wrote:

>>Starting with Verizon with a more solid hardware design (no shoddy plastic) would've made a huge difference.

I sincerely doubt Palm had the option of starting with Verizon; it's always been very conservative about adopting new phones.

Anonymous wrote:

>>I can't help thinking that nearly all of what you wrote applies to what Microsoft is doing with Windows 7 phones as well.

I was thinking along the same lines. It'd be a good subject for another post.

shoobe01 wrote:

>> The Board of Directors might fire you if you delay the launch, but they definitely will fire you if the product fails.
I have never seen this to be true.

Ohhh, I've seen it.

Deepak Thomas wrote:

>>Great analysis, but the Flip example might be a bit off the mark. The Flip guys did receive a lot of free/viral press because they were the first to build a product for an entirely new category

Yeah, but Palm is a well-known brand that was on a comeback story. It got tons of free publicity for the Pre. Far more than Flip ever got, IMO.

Anonymous wrote:

>>Palm's long decline started when Eric Benhamous refused to spin off Palm and drove Jeff and Donna away. He later compounded the problem by breaking Palm up into PalmOne and Palmsource.

I agree, mostly. The moment that really stands out to me is when Palm killed its plans to advertise Palm apps, in the wake of the stock market collapse in 2000. Imagine something like the iPhone apps advertising campaign, only running in 2001. It's almost like one of those alternate reality science fiction stories.

>>However, Palm may still have a slim chance. It was only about 13 years ago when Michael Dell pratically declared the death of Apple.....

I would love, love, love to believe that, but based on the rumors it looks like Palm has put itself up for sale. Once you do that, it's a very difficult act to undo. Like trying to un-ring a bell.

Also, who's the charismatic founder who could return to lead Palm? Donna and Jeff have both moved on...

Anonymous wrote:

>>just ask Motorola! Before Droid, everyone said they were dead too!

I don't think Droid alone is enough to save Motorola. But that's a different post.

>>I also think Palm would be smart to license WebOS outside the mobile phone business - if they could link up with a CE company (hello, Sony or Samsung!), they could get some momentum behind WebOS in another sector.

No, no, no, no, no. Licensing an OS takes an unbelievable amount of management and engineering time. The old Palm, with a lot more money and people, could not make it work right. The newer, smaller Palm would choke to death on the task.

>>Now that you've give your thoughts on how Palm got to this point, would like to hear your recommendations for Palm's management now.

Thanks for asking, and I'll think about it. However, if they've put themselves up for sale, the time for advice is probably past.

Michael Mace said...

By the way, Anonymous, I really liked the rest of your long comment. It's just that the thought of licensing again to Sony gives me hives.

Anonymous said...

I like your point about hardware being easy to market viraly. I understand you wishing Palm continued success but my experience with them suggests that they have already given up. I doubt they agree with you that hardware can be easy to market viraly.

Palm Rejects Opportunity To Kill iPhone

Six years ago the New York TImes reported that because the Palm Treo fits comfortably in one hand and was easily operated with the same hand that holds it, it became the only qwerty handset offered by all five major service providers; and Palm’s stock soared from below $10 in March and closed at $34.99 July 16, 2004.

Today Palm’s sells are dismal, the company is for sale, employees are jumping ship and executives are being paid quarter of a million dollar bonuses to stay until the bitter end.

Given its current problems and lessons learned from its past success one might think Palm would grab at the chance to kill the iPhone by doing the same thing that drove up its stock price in the past, offer a better hand control.

I contacted two of Palm’s board members via their venture capital office Elevation Partners which has $460 million invested in Palm. I thought if anyone would be keen to triple Palm’s value it would be them.

For $1 million I offered them a one third interest in my user interface invention that you hold and operate with only one hand just like you would a television remote control; but you will type and edit graphics just as fast as if you were using two hands on a full size keyboard and mouse. It only takes one day to learn compared to the two months most people take to develop their typing speed on a full size keyboard.

When my invention is built into a smartphone people will throw away their keyboard and mouse and use their smartphone to operate their desktop, laptop, home entertainment center, and so on.

There are tens of millions of people learning to type every year and the iPhone does nothing to help them. There are a lot of parents trying to type with one hand while holding their baby in the other and the iPhone doesn’t do anything to make it easier.

That’s how you kill the iPhone; you make it obsolete; you bypass it and go directly to the customer instead of fighting with the iPhone. Similar to how Pepsi Cola targets the young with their advertising. Going after a new market segment is easier than trying to get customers to switch brands.

Without ever looking at my invention, these Palm board members turned me down saying it is not a good fit for Elevation Partners. I wonder if Palm is no longer capable of producing another gadget.

Of course my invention does not have to be an iPhone killer. It could be the next generation of iPhone. The same offer is available to everyone else including Apple, and other PC makers, laptop makers, cellphone makers, Angel Investors, and VCs. My website is abolishthetinykeyboard.com

Link to New York Times article cited above: http://www.nytimes.com/2004/07/19/business/technology-the-new-miniature-computers-they-also-make-phone-calls.html?pagewanted=1

Anonymous said...

Am I the only one who loves my Pre? It's not perfect, and sometimes I miss my Treo 650, but I can't think of another phone I'd rather have. For those slamming the Pre, is there something else that you like a lot better...or is bashing Palm just a hobby? Remember, a surviving Palm is good for competition.

I can't convince myself to move to the iphone, Blackberry, or Android. This is very depressing.

PaulM said...

What do smartphone buyers do when shopping for a phone? They kick the tires. They see what their friends have. They see what the phones do. The US market is at the point where if you're gonna pay (way too much) for data, you're gonna look before you leap.

The Pre ads totally failed this test.

Shipping early isn't a huge problem if you patch your way up to speed quickly. Patch frequently and fast enough with even minor but noticeable improvements and the public will buy into the idea that you're going to fix everything eventually and give you the benefit of the doubt. Palm didn't do it. The core offerings on the phone weren't patched up to top speed fast enough (if they are yet) to make up for the lack of a big app store.

Being smaller than Apple and Google isn't an excuse, they jumped into this market and thought they could swim with the sharks.

Unknown said...

No choice.

Although I've been greatly handicapped by the lack of desktop sync, and local outline apps on the Pre, I just can't find a better choice out there.

For anyone who needs an iPhone with a hard keyboard, there is no better choice than the Pre. In fact, it is just about the ONLY choice for non-AT&T users.

- The simple and elegant hardware fits perfectly in your hand, around your face, and in your pocket.
- The WebOS can do everything that the iPhone does, plus multitasking and flash (soon to be).

The Pre's only deficiency is in the area of applications. Yet the only mission-critical app that I'm personally missing on the Pre is a local hierarchical outline program. However, except for CarbonFin on the iPhone, this kind of app is not available on any other phone. So, I'd have to break my contract with Sprint, move to AT&T to get a keyboard-less, uni-tasking, Flash-missing, square-edged iPhone just for one single app.

If anyone knows of a less traumatic choice, I'm willing to try it. But until then, I think that the Pre is more complete and has more fineness than anything else out there.

Chris Dunphy said...

" The moment that really stands out to me is when Palm killed its plans to advertise Palm apps, in the wake of the stock market collapse in 2000. Imagine something like the iPhone apps advertising campaign, only running in 2001. It's almost like one of those alternate reality science fiction stories."

That moment sticks in my head as well. That was the beginning of Palm turning away from the value of apps and developers.

"The Perfect Day" app-focused campaign was beautiful. Those ads (that never ran) still stick in my mind to this day. I can only imagine what the world might look like today if Palm hadn't turned course way back then.

It is such a shame too. We knew that apps were our most substantial and sustainable competitive advantage versus Windows Mobile and Symbian, and we squandered it for years until Apple eventually came along and did it right so many years later.


- Chris

Anonymous said...

I am going out to buy a pre plus because I need four things and I think they do them the best.

1) Calendar
2) Contacts
3) Web browsing vs Blackberry
4) VZ Navigator

I could get a blackberry but it is slow and outdated.

I could get a Droid but lose real time navigation. Google maps just gives approximate delays VZ Navigator tells me the time of the delay and any accidents ahead.

I could get an iphone but then I am stuck with the ATT network.

My phone needs to be a tool not and entertainment device. Sure it is nice to play a game now and then but I need access to important information and pre seems to do it best.

As far as app stores given me something that works. My son has a Droid and scrolling through the thousands of apps is a waste of time and energy.

If I were Palm I would show ads as to how one could do work with the pre plus and forget the rest.

ccahua said...

>What do you think?
>Where did Palm go wrong (if at all), and what do you think the lessons are for other companies?

Alex, I'll take number 2. Take care of your friends for $400

What is a PDA?

I'm still getting PalmGear ads, talk about letting go...

I agree that dropping the old installed base (what there was left of it) didn't help. Big talk from Roger before launch raising expectations didn't help either.

I just don't understand the strategy of only looking at the smartphone market.

Building a base from users to shell for a 2 yr carrier plan + $uperphone narrows options in iPhone land.

WebOS could be well served with some sorta iPalm Touch to ramp up distribution/users.

No users, no devs, no apps, no buzz, not necessarily in that order.

WebOS coulda been a contenda!

Geez, dem fancy iPads and iPod Touches sure r popular.

tony, using Apple

Palm IIIx, Palm VII, Palm Vx, TRGPro, Zire, Palm TX

BANUDK said...

Great post again .
I think timing of pre is one reason for its poor sales.

They launched Pre at the height of iPhone wave in US on a small operator which i think crushed its chances .

I guess if they had delayed a year and launched on both verizon and sprint the results might have been different OR if they had concentrated other than US mkt initially it would have been better .

They launched at the height of APPLE wave in US .

CEO said...

I was a Treo user. For many years. I was a Palm developer. I defended Palm when others said "forget it". Palm was king. They were ahead w/ Touch and keyboard and mobile in general.

But Palm missed the golden opportunity.

They bought BeOS and built Cobalt, and a impressive OS it was IMHO.

But management didn't know what to do: Linux? Cobalt? Palm OS? Handspring, this or that. They couldn't decide for whatever reason. Fail. No decision is a decision.

The Cobalt OS way they should have pursued, even if they changed strategy later -- it was the right decision, but they didn't.

Finally when they did move forward, with webOS, no migration path they had (they added it later).

A blunder....


stork said...

I love palm. I was a palmaholic. I have had virtually every palm since the Palm Pilot. The Pre was WAY too slow, the PIMS were horrible compared to my Centro/Treo, and updates were coming at a snail's pace. No medical apps at all. I sure wish palm would have advertised their apps on the old palm os like was mentioned above.....the world would be very different for them now.

I have switched to the Incredible. No pun intended...but it IS incredible. The speed of this phone is amazing. The calendar moves instantly....so unlike the pre. I am not looking back.

Anonymous said...

I'm sure you have written this somewhere before, but it bears repeating: Elevation Partners is essentially a private equity fund (think of this as a kind of VC for mature businesses).

The aim of the game in private equity is to sell the business, either by trade sale or IPO, within a time frame of say three to five years, at a profit (or, better still, an enormous profit). Usually, private equity does not bring much to the table apart from medium term funding. They often claim to provide management expertise, but that kind of claim is false (ie, these guys are money changers, no more). They "contribute" by shaking-up existing management and they tend to "incentivize" (don't you hate that word?) the new CEO with a small stake in company.

Unlike the stock market (which is addicted to quarterly numbers), private equity funds tend to be a little more patient. But there are limits - they need to see a turnaround in financial results within say two or three years of the initial investment.

So, Palm's fate was sealed as soon as Elevation Partners achieved control.

It is remarkable that they Palm were acquired by HP, as you say, but it is inevitable that something like this would occur.

(By the way, I like your blog - it is so refreshing to see a grown-up write about the tech business! Keep up the good work.)

Anonymous said...

I think the Palm marketing and financial games, splitting into Palm One/PalmSource, and so on were the symptom, not the problem.

The company became run by marketing and financial whizzes, not visionary techs focused on creating great products.

But the time Jon was brought in to do the Pre and webOS, it was too late, Apple had won, Palm was just a copy.