30 Comments

Summary:

At CES 2009, when Palm talked about its plans to stage a comeback, everyone applauded. Instead, a few strategic mistakes, wrong partners and a terrible ad campaign were Palm’s undoing. Good marketing can sell a bad product, but bad marketing really doesn’t sell a good product.

Palm has fired the creators of its ineffective Pre advertisements, but tossing Modernista overboard isn’t going to right this sinking ship. Palm’s hoped-for comeback is floundering, not merely because of the bad advertising campaign, but because of bad timing, an ill-chosen launch partner and a lack of developer support. Above all, Palm’s experience proves that even in the world of dumb pipes, the carrier can still make or break the brand.

At CES 2009, when Palm announced its plans to rise from ashes much like the proverbial phoenix, everyone applauded. Palm was a beloved brand and many believed that a new operating system, revamped hardware and marketing blitz would help the company stage a comeback. But Palm’s webOS-powered devices aren’t selling well in carriers’ stores. Instead of pushing them as high-value handsets, carriers are holding the equivalent of fire sales to rid themselves of excess inventory. Advertising Age blames Palm’s marketing missteps.

But the choice of a strong launch partner may have had more of a role.  Motorola, which is also attempting a comeback, provides a counterpoint to Palm’s failures so far with the success of its Droid and Backflip handsets. Mark Sue, an analyst with RBC, credits some of Motorola’s success to the support of its carrier partners in a new research note.  But for Palm, a 6-month exclusive launch with Sprint as the carrier struggled with subscriber churn didn’t help. And that exclusive window meant that the other CDMA carrier in the U.S. — Verizon Wireless — had time to pump $100 million into a marketing blitz to promote the Motorola Droid, not Palm phones.

So now Palm is trying to stay in the game by engaging customers at the point-of-sale with brand ambassadors in Verizon and Sprint retail locations. Enabling sales staff to understand the benefits webOS brings to a device is a step towards recovery but the road will be long. The problem is that many consumers enter a phone shop already knowing which device they want based on marketing they’ve already seen.

As a former Palm Pre owner — I waited in line on launch day for the innovative device and shared first impressions — I agree that advertising efforts didn’t help matters. But choosing a different partner or limiting exclusivity to a single carrier for less than a half-year — nearly a full product lifecycle on some mobile tech calendars — could easily have vaulted Palm into a formidable challenger.

This article also appeared on BusinessWeek.com

  1. I was on Sprint last year when the Pre was announced and then followed all of the rumors and speculation until finally getting one on that Saturday morning – June 6. I think they dropped the ball in so many ways. I was really disappointed with the first ad, the second ad, Sprint’s ads, etc. I think all of us “enthusiasts” were expecting a big blitz (since they took 6 months to get it to market) to show the world the new Palm Pre and it really came out with a whimper. And the fact that the hardware itself was suspect didn’t help. 3 weeks later I also bought a iPhone 3GS, compared the two and took the Pre back.

    As soon as I heard about Droid and saw the first advertisement, I knew Palm was sunk (gee, Palm, where is the GSM version?). Too little, too late.

    Share
  2. My wife and I each bought a Palm Pre Plus over the weekend. Some unexpected “features”
    1.A battery life, with minimal usage, of 18 hours
    2. From full Power Off (to try to save the battery) 2 minutes to become functional.
    3. Murky instructions on using the device.

    Maybe the price had to be reduced to near giveaway ($25 each) to get the phone moving. Marketing aside, quality would have sold phones. Palm didn’t care and its come back to bite them.

    Share
  3. Bad marketing, bad carrier. Sure. But that’s not the prime issue, I think.

    The Palm was like the old Pontiac Fiero. You hear about it — wow, a affordable, two seater American made sports car! Can’t wait! Then it’s delivered.

    Underpowered. Few apps, so can’t do much. Smaller than it should be. Looks ok, but not great. No compelling reason to buy it.

    Share
    1. I’m a former Pre owner who switched to the HTC Hero…

      …but I actually TOTALLY disagree with most of your comment.

      Yes, the Pre was perhaps a little smaller than it needed to be. But many folks loved the soothing “small black stone” feel to it, and it wone a ton of design awards.

      Also, the Pre isn’t really underpowered…it’s quick…and it has a screen that’s STILL superior to most other smartphones in terms of brightness and color depth.

      As far as apps…it’s got over 3000 now. And let’s admit that both Apple and Android FAR overcount the true number of distinct apps. For example, the same Japanese company offers something like 100 different iPhone apps with different sets of girl-in-bikini wallpaper or 24 different versions of the same NFL football app, where each one is customized for a different team. If one really counts the number of distinct, useful, common apps, then the Palm App Catalog has just about everything 99% of users want…and it’s growing.

      And WebOS is STILL far cooler, cleaner, and easier to look at that any other smartphone OS.

      The only reason I reluctantly returned mine was the poor build quality of the initial lot (e.g., loose battery caused frequent reboots, cracks radiating out of needless charger door cover, etc.).

      If the rumored Palm Pre 2 fixes these build issues, I will get one in addition to my Hero…

      Share
    2. P.S. Update to my other comment….the Palm App Catalog is up to 5000 apps, and that doesn’t include any non-Catalog homebrew apps. As far as apps…it’s got over 3000 now. As I posted earlier, let’s admit that both Apple and Android FAR overcount the true number of distinct apps. For example, the same Japanese company offers something like 100 different iPhone apps with different sets of girl-in-bikini wallpaper or 24 different versions of the same NFL football app, where each one is customized for a different team. If one really counts the number of distinct, useful, common apps, then the Palm App Catalog has just about everything 99.5% of users want…and it’s growing.

      Share
  4. [...] Previous Could a Better Carrier Have Saved Palm?   GA_googleFillSlot("GigaOM_ATF_left_300x250");   Add a Comment   Subscribe to comments Click here to cancel reply. Name [...]

    Share
  5. What? Really? I think you’re giving too much credit to the marketing prowess of cell carriers. Seems like it has been a case of the phone making the carrier, and not vice versa.

    But assume you’re right, and Palm had a significant multiple of their market share…then what? Is it good enough to have fought off Android and the iPhone juggernaut? How many smartphone platforms do you think the market will support?

    Share
    1. I think you’re under-crediting the role the carriers play in marketing and adoption. The number 1 and 2 TV advertisers in the U.S. are Verizon and AT&T and I know T-Mobile is in the top 20 and would think Sprint’s ton 10. The constant barrage of TV ads do have a tremendous impact on how consumer perception is formed and what devices sell.

      Take the Nexus One, for example. Amazing device, packed to the gills with features and it had one of the bigger Web advertising pushes I’ve seen in a while (on every tech site and on Google’s front page). It hasn’t sold well. Of course, part of that’s due to T-Mobile’s relatively small footprint, but I’d bet you dollars to doughnuts that if Google ran an N1 ad during the SuperBowl, many more consumers would have bought it.

      Share
  6. short answer: no
    long answer: nooooooooo

    Share
  7. While general availability maybe is an issue, the larger issue was build quality and material selection. The Pre itself is great. webOS is terrific. The cheap plastic and horrible slider quality at launch is what stopped it from being a success. That’s squarely on Palm. Had the hardware not started failing days after launch it would have been a totally different story.

    I worked with the device during launch, and expected that the pre-release hardware I was playing with wasn’t what we were going to market with. It was, and it was utterly disappointing.

    Having said that, I bought a Pre a few months ago and love it. It does everything my iPhone did and Sprint’s network has been awesome. I treat it with kid gloves, though–even more carefully than my glass-screened iPhone–to make sure it lasts me to my next upgrade without falling apart.

    Share
  8. Hi Kevin,

    I too stood on line June 6th to be one of the first to get a Palm Pre, as a long time Palm enthusiast. I think a big issue that is rarely addressed is the focus Palm placed on the Hardware and not the Software. Palm has missed the boat by not stressing WebOS and the power of the PLATFORM. We heard about Android and the capabilities of the OS long before the first handset was available. WebOS is arguably the most elegant, intuitive, and functional Mobile OS available, yet the public at large does not know that. The marketing of the Pre and Pixi should have been secondary to the introduction of an awesome mobile platform with multitasking, multitouch, and a seamlessly intuitive UI. And of course, the APP store launch on WebOS was a disaster, which didn’t help. All that said, I still use and love my Pre (but, as a Sprint customer, I already hear the sirens of the HTC EVO calling…)

    Best,
    Jeff

    Share
    1. Jeff, I completely agree about the software. I have had my Pre for over 7 months now and feel the operating system is second to none. In fact if Palm made the screen a little larger, added a memory card slot, and made the processor better I would buy the new version in heartbeat. I will probably be a Palm fan which hopefully isn’t a limited time gig!

      Share
  9. Meh. I still think that webOS coupled to high quality hardware can still help. Almost every tech journalist I’ve read says that webOS is the finest they’ve used, but bad hardware and lack of developer support are killing it. Hopefully producing high quality hardware will bring more customers, more developers. Still not too late, but this is it. If the next generation device is not up to snuff, then it’s over.

    Share
  10. The answer to this question is a resounding yes. The hardware/OS is actually very good. If they had launched with VZW with a decent ad campaign, they would have gotten the critical mass that would have solved other issues like getting the attention of app providers.

    Share

Comments have been disabled for this post