Is It Time to Stick a Fork in Palm?

35 Comments

Poor Palm (s palm) — the news coming out of the company just gets worse and worse. Lackluster sales of its webOS handsets and a mass exodus the departure of some key executives at the company. It’s like rats leaving a sinking ship in droves. Analysts are quick to point out what Palm has done wrong to put itself in this untenable position, but the fact remains that the way forward is anything but clear. Is it time for Palm to call it quits?

Sales of the Palm Pre and then the Pixi never set Sprint (s s) sales records. Palm then put big hopes on the updated Pre Plus and Pixi Plus, with its exclusive deal in the U.S. with Verizon (s vz). But in the quick paced smartphone space timing is everything, and Palm’s appearance on the Big Red network followed the carrier’s move into the hot Android (s goog) market. The Verizon advertising campaign for the Droid Android line was massive, and the Palm phones arrived at Big Red with a whimper, not a bang.

The sales numbers for Palm get worse and worse; it’s clear the webOS platform is not saving the company as hoped. The company goes public that it is shopping for a buyer, and key executives are leaving by the shuttle bus load have left. Palm offers big bonuses to keep other executives from leaving the sinking ship, but that’s not enough either. The loss of a major distributor for Palm phones (RadioShack) proves how bad it is, and signals that it is only going to get worse. Palm is even waiving the developer’s $99 fee to submit webOS apps to the App Catalog, a move that smells of “too little too late”. There doesn’t seem to be a way forward for Palm, a sad situation for any company.

My Palm Pre is sitting forlornly on its Touchstone charger, a great phone but no longer sure when (or if) it can expect any further software updates. The Pre is a testament to how good the webOS platform really is, but that doesn’t seem to be enough to save Palm. That Touchstone charger is the single most innovative phone accessory to be released by anyone for years, yet it’s not enough either. It is a clear indicator of just how difficult the competitive smartphone market has become, when one of the best OS platforms coupled with great technology cannot turn the tide for Palm.

I have stated in the past that the only thing that can save Palm is an innovative (non-phone) product. A webOS tablet would at least break Palm out of the smartphone doldrums. Palm’s line of phones has not been enough to stave off disaster, so my thinking was that a radically different product would at least have a chance to make an impact. Now I’m not so sure, due to that timing thing. The iPad (s aapl) is selling like hotcakes, and as it’s the biggest competitor for a Palm webOS tablet, it’s probably too late.

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35 Comments

Anvarzhon Zhurajev

Can anyone give 5 solid reasons why RIM wouldn’t want to ally with Palm? Look, RIM is a king in Enterprise, but has tough time to catch into consumer’s marketplace. Palm tries to catch anything, but it looks too unfocused to grab anything. Merge, or acquisition, or strategic alliance – why it would hurt them both?

Brian

It’s funny to read the Apple advocates who forget to change their aliases before claiming to be disgruntled former Palm users.

Palm will be fine. It’s got close to $700 million in the bank, great people, and it is growing its distribution network. Slow and steady wins the race.

The amount of vitriol directed by Apple fanbois (and Apple fanblogs/media whores) is also interesting to me. If Palm was so “done” and “toasted” and “doomed” and if the webOS phones were “cheap copies of the iPhone” and “crap,” why the persistent need to constantly attack tiny Palm at every opportunity?

Because Palm’s technology remains a threat to Apple. It’s a better experience, on better hardware, with a real keyboard, on the two most robust networks in North America and a growing library of apps. It has strong multitasking capabilities and every month gets better and better. All the Apple propaganda is a sign of fear on the part of Apple fans whose aging, obsolete platform still requires PC connections, lacks a decent keyboard, and cannot run multiple apps at the same time.

Uncle Bernie

I just returned a Pre Plus after one week. I didn’t want to, but Verizon wanted too much to get out of my contract with my shitty Blackberry.
The web os was ok but not great. There is an annoying delay in opening the apps. Saving bookmarks was not obvious, and I had to swipe the tiny web button repeatedly to get it to work.
The most frustrating thing was having to constantly open the slider to use the crappy, cramped keyboard.
As far as total user experience goes, nothing beats the iphone. Synching, app purchase, usabiity, constant improvements, it is by far the best.

Jules

Amazon should acquire Palm for the webOS and focus immediately on developing a new tablet and branding it the Kindle Tablet. Then reassess whether to remain in the mobile phone space: shut it down, or sell it off separately later.

gbp

James,
Palm will survive either by acquisition or going solo. The guy who left is a job hopper. He left his Phd in the middle too. Besides there is a talk on Avie Tevanian an ex Apple Senior VP taking over Abbott’s role. Folks keep forgetting the fact that PALM is a very small company. Only about 1000 employees. Compare that to APPLE,Google,RIMM and Microsoft. They can survive if they make just enough sales. A Palm WebOS tablet is a killer idea. I would be buying it in a heartbeat. The issue seems to be the R&D money. Palm doesn’t have the money. They need to get additional funding on top of the recent 10% stake from the hedge fund.

Long story short I agree with you 100% on the tablet, it will be great but no money to make it. If they get acquired it is possible to make a tablet in six months. If not, I don’t see it happening. First they have to come out of the hole , which will take couple of years.

Land Gero

Palm should look start using making their own versions of iPad.

If you look at their previous product, Palm PDAs, it was sort of like Apple’s Newton. Maybe they can do it again with the iPad ans just scrap the idea of re-inventing smart phones when at this time is already at its peak with the iPhone.

Paul

Palm spent its time and resources trying to hijack Apple’s iTunes service, instead of innovating and defining services that would make Palm stand out.

The company deserves to lose out as a result in my opinion.

A. Reader

No mass exodus of execs. Turnover and compensation typical for this kind of company. Shack hardly a major distributor. Dev fee waiver not in response to any recent news — it’s been waived all along. Company has not gone public saying it’s shopping for a buyer. You’re adding up rumors and assumptions and reaching questionable conclusions. Would love to see some real analysis based on the actual facts and real circumstances — could lead to some real insight.

Richard Garrett

JKOnTheRun is one of my must-go-to sites, I visit most everyday. I also look forward to the podcast and ‘my’ friends – James, Kevin and Matt – talking as though they’re in the backyard, chatting across the fence. Each brings a unique perspective to the blog that I value highly. I hope they keep doing it together at least for another 205 weeks and episodes. To the doubters and naysayers, I say “quiet you numbskulls”!!

Lo Szabo

Unfortunately, the short answer is: yes!

Palm could (or should) have been the phone OS experience that Google introduced to us with the Andriod platform.

As a long-time, former PalmOS user, I do not see any reason to give up my iPhone or BlackBerry and switch to a Palm device with less applications, etc.

kevin

I just picked up a pre plus to use as a 3G mobile hotspot. I’m liking the phone and the hotspot so far. I hope webOS continues on.

John

Sorry to crash your wake, but Palm is unlikely to survive. I give them a year, maybe six months. They are running out of cash. They are not gaining market share. They are stuck with a huge number of unsold phones.
They may or may not have a nice OS. To survive in business you need more than that. One or two nice features do not mean success. Apple has a number of things Palm didn’t have such as name recognition, sales channels, stores, genius support, telephone support (number one according to CR).
Stock analysts have put an expected price of $0 on Palm stock. Speculators are buying some of the shares in hopes that a buyer will reward them. Maybe, maybe not. I’m skeptical that anyone will step forward and buy them for a premium. To buy Palm you’d have to take up the mantle of being a Web OS evangelist and trying to gain mindshare for that. Too much work. It is easier and cheaper to use the free Android or Symbian. After the value drops low enough someone will step in and pick up the remains to get the patents.
I’m sure they would like to do a tablet or other cool device but there is no money left to do new products.

Ron

I’m not going to miss Palm. I didn’t like how they tried to piggyback on the iTunes. And all the empty boasting about iPhone customers were going to flock to them.
WebOS is often stating as being great. I didn’t see it. I got the iPhone 3GS and with all incredable apps have never had a better phone experience.

Good bye Palm. You had a good run.

Jim Freeman

Given the Linux foundation of webOS, I can see it living for a while like BeOS/Haiku — if, of course, anyone will sell an unlocked phone that can have webOS flashed onto it, and Palm open-sources the OS before dying.

Of course, all bets are off if/when they get bought . . . .

Dan E

I for one will be sad if Palm and WebOs die off. I recently purchased a Pixi Plus to use as a second phone when I don’t want to carry my Droid and I find myself using it all the time. Synergy makes juggling a busy personal calendar (gcal) and work (exchange) so much easier. I really prefer the card based multitasking as well. If they could put WebOs on my Droid I would be in heaven. Hopefully someone like HTC will recognize the power of WebOs and scoop them up.

Mary Jane Bong

Yeah I always thought they should have offered WebOS on much fancier hardware with big high-res screens like the HD2 instead of that plastic rock and miniature pixi. WebOS on a Droid would look awesome. On an iPad it would be mind-boggling. Just shows to go you that timing is everything in the mobile tech sector. Palm just sat on their WebOS for too long and released it and the SDK too late.

Scotty

Palm may not be done quite yet but it might be a good time to order up those cores they wrap toilet paper around so you’re prepared to make use of any Palm stock certificates you have lying around.

Tom

I also think this is a sad story, especially for those of us who waited for an alternative to the iPhone. Great blog! Thanks for getting this and other posts out there.

ecb

I got the Palm Pre from Sprint the day it launched. WebOS was great, but the build quality was horendous. The combination of the poor build quality , worse than expected Sprint coverage in my area, and the lack of applications led me to stop using the Pre, but I still think it’s the best mobile OS out there.

It’s unfortunate that Palm was slow in releasing paid apps into their App Market and it’s also unfortunate that Palm was slow in giving developers GPU access. I have to agree with the posters that mentioned that webOS just came out too late and the other mobile OS’s have closed/are closing the gaps….though no other mobile OS handles multi-tasking as smoothly as webOS’s card based system.

I’m surprised at how poorly the Pre has sold at Verizon…. especially since the mobile hot spot option is now free. I was going to get my wife a MIFI from Verizon and I was toying with the idea of just giving her my MIFI and getting a Pre Plus for myself. However, reading James’s concerns about the Pre not receiving any more updates is making me rethink that option (as is the posts I’ve read indicating that the build quality of the Pre Plus is not much improved over the Pre)

Given that we’re coming up on a year of webOS, are there any rumors that there will be a webOS 2.0 combined with improved hardware ?

BradQ

this is clearly why so many people have no respect for you James & Om regrets the purchase of your sinking ship site. it must also suck to know that people come here for Kevin, not you & that he will be jumping ship when a better opportunity comes along.

youve never cared for facts, just twisting facts to meet your own agenda. you can post all the posts like this that you want but it still wont help your sinking numbers.

Execs are not leaving Palm in “mass exodus”. giving bonuses to execs are actually quite common before major buyouts.
RadioShack EOL the Sprint phones, so what? they are nearly a year old in a rapid moving smartphone market. more Android phones have been EOL’ed in 6 months than Palm will have in 10 years.
the Dev fee is temporary…

Mary Jane Bong

I disagree. Given the size of Palm, mass quantity would equal anything more than one.

BTW, I think jkOnTheRun has never been about quantity, they are about quality and they are getting better every year.

Ozone

Hey BradQ… put a sock in it. It’s called a blog. You don’t like what somebody says? Don’t respond, move, on, or be respectful in your disagreement. We don’t care for your bully-like response.

Conquistador

Wow. Lighten up. Everyone in the world “gets” it that Palm has a big techie following. And WebOS may truly be the best Smartphone OS out there (I have no idea). But the reality is the remaining market share after iPhone OS, Android, and Blackberry is very small…..and shrinking. Palm would have to be exponentially better, cheaper, and lucky to survive. I take no glee in it, but they are toast.

GoodThings2Life

This is the perfect company to buy and the perfect time to buy them. If HTC ponies up the cash to do it, kudos to them, because I think they’ll be the ones to put the technology to use and not the legal hounds. If anyone else buys them first– Apple, Google, or Microsoft– then God help us all as we get ready for an onslaught of legal battles.

zunetips

I’m a WebOS Developer and I’ll be heading off to the Palm Developer Day Sessions on Friday and Saturday. I wouldn’t say that Palm and WebOS is dead yet. They have a full schedule of presentations at these sessions, so it doesn’t seem Palm is throwing in the towel.

I love programming for the WebOS device, much more so than for the Windows Mobile devices. Palm also has a new web-based development system called Ares that they are now bring online in an official capacity to help developers rapidly create apps graphically by drag-n-drop controls, etc.

A WebOS tablet would be fantastic, if it could run on a fast processor (like the iPad). I certainly hope Palm makes it through these rough times and moves forward as a major player in mobile devices.

Owen

I too have tried all of the current OSs out there and believe WebOS is the best. I also think that the hardware designs of the Pre and Pixi are very attractive (build quality is suspect, but easily remedied). Say what you will, but the combo of multi-touch, multitasking and a hard keyboard is a “must have” for a large segment of the smartphone buying public, especially corporate buyers. Where Palm stumbled was on marketing out of the gate. It should have hammered the competition (I am talking to you iPhone and Android!) over their shortfalls on functionality, e.g., multitasking, synergy, etc. Last Summer, Palm could credibly boast about these differentiators. Now? Not so much because the competition has (kind of) caught up. It is all very sad because i still prefer the Pre to any phone on any network. That may change when Sprint unveils its ultimate Android device this Summer (which will sadly lack a hard keyboard), but I would still take a Pre over anything out right now! Where does this leave Palm and WebOS? I don’t know. I am to the point where I would prefer it to get gobbled up by an 800 pound Gorilla (BBerry, Google, HTC)and save some vestiges of the Palm legacy and WebOS. Hell, Palm could continue to exist as an upscale line extension from a proven player. Think “Lexus” and “Toyota.” BBerry could use an infusion of “cool” if it is going to compete for any target consumers other than aging dinosaurs who like their simple BBerry for corporate messaging only. A Palm/Berry device would certainly attract younger hip consumers who need rock solid corporate email (and IT dept. suppoert), but want the functionality and design that WebOS offers. Okay, enough dreaming. It is just sad to see the company with the most innovative OS and solid design fail while companies that pump out old timey tech march on selling their boring function-lacking devices loaded with aging OSs. As for the comment above about Palm stealing from Apple, the patent portfolios don’t bear that out. Palm invented the smartphone with the Treo line when Apple was still pushing early adapters to buy Gen 1 iPods that required Firewire cables. The iPhone may have revolutionized the smartphone category, but Palm created it!

Uncle Bernie

Owen, you sad pathetic dreamer. Your article is about what you wish were true, not what is. Palm is toast, the Pre is an average phone, and there will never be any apps for it. Do you use your phone to replace your teddy bear?

Ozone

I don’t know if Palm is truly “dead” yet, but I dug up my old Palm foldable keyboard last night given all this talk about keyboards for the iPad, and remembered all this useful but now largely antiquated hardware and software that no longer runs well or easily. I was struck by how much I miss my old Palm Vx, how well the Palm “system” all worked together, and how I wish Palm had provided more obvious upgrade paths. Somehow, they lost they way after the initial Treos. I can’t believe I actually miss the Palm “chirp” sound! I would have been an early adopter of the Palm Foleo… they decided to kill it, and now look at the proliferation of netbooks and tablets. What a shame…

Fuhgeddaboutit

Yeah they be done. I still think most of Palm Pre technology was “lifted” from Apple illegally. Well you ain’t kidding about iPad being white hot. Would you give up your pinky for an iPad? Well dude in Denver just lost his finger in the mall right after buying new iPad, robber thugs wanted the iPad real bad. Remember all those subway muggings over iPhone a few years back well it starting all over again with the iPad.
Everybody wants an iPad especially THIEVES !

PRETHOUGHT

“I still think most of Palm Pre technology was “lifted” from Apple illegally.”

Have you seen the original US Robotics Pilot circa 96′?
How many column’s and rows of icons?

Going from using the Pre to working with the iPad I can’t believe how irritating not having multi-tasking really is but hopefully that will be remedied by this fall.

I can’t believe it’s been 10 years since Palm.net and Omnisky were the only way to get mobile email. How far Palm has fallen.

miles

Can we put a fork in these useless stories of Palm dying? One person leaving is a mass exodus? Also the iPad is not a run away success yet. I’m not saying Palm is not in trouble, but it’s not over yet.

Dave

It’s very sad to see. Palm was the company that really pioneered smartphones and has had touch screens since the beginning. webOS is truly the best smart phone OS out there. I’ve used the iPhone, Android, and Blackberry, and webOS blows them all away. Unfortunately, Palm couldn’t get enough people to buy their phones.

I will use my Pre+ until the day it dies. Even if Palm dies, I see a huge group of users and developers keeping webOS going for quite a while. It is an elegant platform that is easy to use and program for.

Palm should have released a webOS tablet last year. I wonder if they could still do good with one. Yes, the iPad is out, but no one else is really challenging it yet. A webOS tablet would be a great device.

Palm webOS users can only hope that Palm can do something (new product, or get bought by a good company) to survive. It would truly be a shame to see the best smart phone OS die before it’s time.

marcospolanco

“users can only hope that Palm can do something”…the way forward for Palm is radical, and it has nothing to do with the product but with its content strategy. What if Hulu were available exclusively on webOS? What if the content owners formed a syndicate to similarly drive their content exclusively through this elegant device? Hollywood would suddenly have direct access to its audience, a relationship that is rapidly being mediated through Apple’s touch interface. No need for Hollywood to crouch in fear of Silicon Valley…they need to control this device.

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