Could a Better Carrier Have Saved Palm?

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

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