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Summary:

Palm Pre owners got a bonus gift this holiday season with today’s release of webOS 1.3.5. But struggling Palm will need more than just an OS makeover and improved developer tools if it’s to compete in the era of the superphone.

Palm Pre owners got a bonus gift this holiday season with today’s release of webOS 1.3.5, which promises improved battery life and more usable storage for app installation, among other things. The move makes good on Palm CEO Jon Rubinstein’s recent promise to upgrade the company’s mobile operating system, and it follows the release earlier this month of the Ares SDK, a web-based tool for developers looking to build on the platform. But the struggling manufacturer will need more than just an OS makeover and improved developer tools if it’s to compete in the era of the superphone.

The next few months will be critical for Palm, which has seen its handset sales slide following the Pre’s June debut. The company has promised to take its developer program fully public at next week’s CES show in Las Vegas in an effort to boost development for an app store sorely lacking in titles. And Verizon Wireless  is preparing its employees for the launch of webOS devices as Sprint’s exclusive grip on the Pre and Pixi comes to an end. But the clock is ticking for Palm, which is increasingly being pummeled by competitors such as Apple and Android devices. The company must find better ways of marketing its handsets as they come to market through the nation’s largest carrier, and it must continue to improve the webOS as it fills the shelves of its app store. Palm may be the Jack Bauer of the mobile industry, lurching from crisis to crisis, but what it really needs is a high-profile launch through Verizon in the next couple of months. And it needs to do it without the drama.

  1. When you have the second best phone on earth you would beat to death the point in your commercials.
    Both PALM and SPRINT were brain dead with their marketing.
    They dropped the ball with those creepy commercials.
    Verizon typically goes aggressive, I bet they can beat SPRINT sales.

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    1. I agree with this comment, however I think Sprint had good commercials all the way, it was Palm which totally nullified its product with a bad marketing strategy. Those ads were really creepy.

      The videos shown on Palm website, about how PRE can do multitasking etc, were so good, they should have continued with them and could have brought the real meaning of the product very nicely to the crowd.

      Verizon’s DROID ads are also dull, but surely they are very aggressive and would definitely be able to outsell in numbers.

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  2. Well put Colin.

    Palm is more like the “Phoenix” of the industry as it keeps rising from the ashes. However, this in our weak global economy this red-market is hyper-competitive and the Pre runs the risk of becoming irrelevant. Ironically this is the best product they’ve ever released since the Palm Pilot.

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  3. Palm’s ads may have been creepy, but their main flaw was to miss telling me why their product’s advantages mattered. I can imagine the advantages of multitasking (since I am probably more technically savvy than at least 99% of the Pre’s target market, though that’s not saying much), but that’s not the same thing as the gut feel longing that sells product.

    Only Pixi has a chance now, since its form is at least a bit distinctive. But unit contribution will be low for Pixi, and Palm probably can’t sell enough of them against entry-level Blacberrys to float the company.

    So the larger question is whether anyone wants to buy Palm’s assets. Google may have helped them by threatening to launch its own HW product against Android licensees, but I don’t see much else running in Palm’s favor.

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  4. Thanks for the comments, guys.

    I’d absolutely agree that Palm (and Sprint) failed to support the Pre with effective marketing efforts. That’s a lesson both companies should have learned from Apple and its brilliant ads that demonstrated not just what the iPhone can do, but how it can help enhance users’ lives.

    If VZW opts to back the launch of the Pre and Pixi with a compelling ad campaign — or if Palm can somehow pull that off by itself — it stands a chance to get back in the fight. That seems unlikely, though, as VZW now seems smitten with Android. Which could spell doom for Palm.

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  5. Agreed. The two distinct competitive advantages going for Palm when they launched the Pre to the consumer eye were:
    1- multitasking
    2- better service
    I couldn’t believe they couldn’t drive this in turn, VZ and Google plucked these two pointers out in their campaign.

    Palm needs another “wow” characteristic to stand a chance come 2010. Among fixing their developer tools and adequate customer support for their developer program, they need to invest in outside developers. They need to get developer friendly very quickly. Run contests, promote these contests via social media outlets, give away $$ and in doing so when the interest/trust/loyalty of these developers. They need to give the consumer and developers everything and more than what their competitors can do. Their advantage now is that they already dropped the ball — the company reported terrible earnings once again. It’s about winning mindshare and marketshare. Enough so that they can become relevant again. And only then can they experiment with tweaking their services to yield a profit.

    There’s no guarantee this will yield righting the company back to financial safety and consumer/developer relevance, but I would like the believe this would be the first step in the right direction.

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  6. [...] a nightmare scenario for Elevation Partners, which has poured $425 million into Palm to keep it running. The Palm operating system, webOS, has garnered praise as a worthy [...]

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  7. [...] December 2009: Why Early 2010 Will Be Crucial for Palm [...]

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