Blog Post

Why Nobody Wants Palm — Except Maybe Facebook

Another day and another potential buyer of Palm has been crossed off the list — HTC is reportedly passing on the opportunity to purchase the troubled smartphone maker. Which means all signs are now pointing to Lenovo making a bid, especially in light of its recent decision to jump back into the smartphone market. But at this point, I don’t see Lenovo — or any other handset maker, for that matter — spending the billion or so dollars some expect Palm (s palm) would fetch, for I think it’s too late for its webOS to compete against the platforms of Apple (s aapl) and Google (s goog).

With application developers focusing the lions’ share of their attention on creating titles for iPhone and Android handsets, any company considering involvement with Palm faces a limited ecosystem for software as compared to larger rivals. As a former Palm Pre owner, webOS was a joy to use, but it never truly gained the attention of developers, and so without a vast library of high-quality apps to choose from, I jumped ship.

Multitasking is good, but not enough

To be sure, I’ve owned or used phones from every platform and can say unequivocally that Palm’s webOS handsets do multitasking better than any other smartphone device, thanks to their innovative card system. But it’s not enough of a differentiator; if it were, consumers would shun Apple’s iPhone, which offers limited multitasking for native Apple software.

And Lenovo has already started to build atop of the multitasking Android OS; it introduced the world to its Android-powered Lephone in February. Its decision was an easy one to understand: The operating system doesn’t cost the company anything and it can leverage the growing popularity of Google’s platform in the process.

Why not a Facebook phone?

So given that Lenovo’s already made its support for the Android platform clear, who’s left to save Palm? Maybe it’s time to step outside the box and consider a less traditional option: Facebook. The webOS Synergy feature can already be used to link a Palm phone with a Facebook profile for easier contact management. In light of the social networking site’s plan to make the entire web social, that’s just the tip of the potential iceberg.

Imagine that Facebook partners with and pays Palm to rebrand its handsets as Facebook phones. Due to ineffective marketing, consumers don’t know about webOS, but they do know what Facebook is. The rebrand alone could vault Palm’s handset line into the spotlight. With the right hooks between Facebook and webOS, the devices would be dedicated social networking mobile phones, the number of which is steadily increasing due to the rise in social activities on smartphones. Palm could use the huge Facebook ecosystem as a carrot to dangle in front of mobile app developers, and Facebook would gain control over a mobile platform.

Perhaps we’ve been asking the wrong question about Palm all along. It’s not which carrier does Palm need, it’s which company Palm should partner with to save itself?

Related research on GigaOM Pro (sub req’d):

Could Games Redeem Windows Mobile and Palm’s webOS?

To Win In the Mobile Market, Focus On Consumers

Image courtesy of Palm

44 Responses to “Why Nobody Wants Palm — Except Maybe Facebook”

  1. I’m happy with my Pre, I like better than the iPhone my wife has and I’ll never buy anything from Google. I heard Cisco was interested but I was hoping for HTC. The fundamental platform is solid and would blow the iPad away on a tablet. Windows Phone 7 looks very WebOS like and might be the best platform out there. This market is still young and there’s plenty of room for different platforms.

  2. The value of Palm really isn’t WebOS. It’s the patents. Palm has a lot of the fundamental patents covering many of the most basic smartphone technologies.

    Palm can’t really use them, because of the mutually assured destruction of a patent war would bankrupt them quickly.

    However a patent troll company could probably take Palm, rip it up and sell the parts, then use the patents to make a lot more than $1B.

  3. As someone pointed out correctly, the value is in the OS. And Palm has a distinct and full fledged OS. But not worth a billion dollars, me thinks. Palm needs aggressive advertising to build the brand as desirable for consumers. And contrary to what a lot of tech friendly people think, most consumers wouldnt care how many apps the phone has. If its cool and available, they will buy it with basic apps like FB, Twitter, YouTube etc to begin with.

  4. Ceeaser

    actully, and Im a pre owner and Alpha tester for the OS of cooked kernals like 800mhz and cpu scaling, and I think this might not be such a bad idea. In a sense of Facebook just investing in palm, not trying to buy the company out, they could be what Google does to their phones (google maps, navigation search etc) facebook could intergrate facebook services into each web os phone and add different features not on any other phone. Which could help not only facebook push more of there services world wide, but also Web OS phones due to people would learn on how to use it because its favorite service is provided on it. The reason Google got out there fast with Android is because everyone knows who google is. Not a bad idea at all.

  5. Regular Reader

    I have no knowledge about finances, cash flow, assets or other management tidbits about Palm. I began using early gen Palm Pilots and to this day I pick up my Palm M515 and use it about once a day even though I have a BB storm, BB Pearl, and iphone in the house. My perception, key word perception, is that Palm as a company has been bought and sold so many times that the only thing really remaining is the name. And for that, if I were a personal or corporate investor, I would not pay a billion dollars. I wish the company well and I commend Kevin for thinking outside the box, I mean outside the handset, and providing us readers with a blog post that shows creative scenario thinking not just rehashing of corporate press releases.

  6. Since you’re saying Facebook partner with Palm, why not Twitter? That would make as much sense as Facebook but without the security worries that Facebook brings.

    I’ve been saying for a while that Palm should find one or two companies to partner with. I was actually thinking more like Asus, maybe Gigabyte, MSI and or maybe AMD/ATI. They could make the chipset for the phones. It would give ATI a reason to make a mobile chipset and graphics like Nvidia did with Tegra. Also AMD/ATI own Global foundries, so they already work with companies that make ARM processors or they can make their own.

  7. I’ve been a fairly technologically forward individual since childhood. I’m all about efficiency, effectiveness, ease, and elegance. (it’s weird that i just came up with all ‘e’ words.) I’ve owned the Palm Pre since day one and it’s absolutely been the cleanest phone I’ve ever owned and has completely lived up to the four E’s. I will say that it’s APP CATALOG has been slow to come about, and strangely full of religious text or unappealing/mindless games, however it’s getting there.

    I would be very sorry to see the phone go. I wish it the best of luck!

  8. Facebook buy Palm? That’s ridiculous.

    The problem is that unless you are Apple (iPhoneOS) or Microsoft (Windows Phone 7) or RIM (BB) … Android is completely commoditizing the mobile OS. (And I didn’t mention Nokia on purpose.)

    When the OS is commoditized … what exactly does Palm bring?

    But here’s what Apple should do. They should buy Palm at a huge discount just to get their patent portfolio.

  9. devid001

    Hi to all,

    A smartphone is a mobile phone offering advanced capabilities, often with PC-like functionality. There is no industry standard definition of a smartphone. A smartphone is a phone that runs complete operating system software providing a standardized interface and platform for application developers. For others, a smartphone is simply a phone with features considered advanced at the time of its release. Now these are commonplace on non-smartphones.In other words, it is a miniature computer that has phone capability.

    Histamine Intolerance

  10. With everything moving to smartphone and convergence of mobile and internet, this is an interesting proposition for Facebook, but I see the markwet segment for this to be very narrow. Would you trade your iphone for say a Facebook phone?

  11. Wifiguy

    Why does everyone think there in expert on Palm? Unless your a high ranking executive you have no clue who is really interested in buying Palm. The future in profits is owning the platform which is software not hardware. Look at Motorola, everyone was waxing poetic about the Droid but know its yesterdays news. But what is relevent is Android platform. Someone with the money and the expertise to put Webos with the right hardware with the right marketing could be a formidi ble foe. RUBY left Apple after feuding with Jobs insisting it needed a keyboard, he got it wrong and needs to get over himself and give people webos on a big screen with a wicked fast processor, and market it that way. That’s it.

  12. FB is a flash in the pan, they have already begun the downward spiral if you look at hard numbers.

    hell, Twitter could do more with Palm than FB could, and because theri numbers live outside of the norm it would be harder to predict doom.

  13. Kevin, Thats one crazy idea. Not sure it will fly. The brand recognition for facebook is there, not sure it translates into sales. Besides why would facebook want to make Microsoft angry.

    On the palm app stores, it is gaining momentum. Especially a boatload of the 3D games are ported to WebOS form iPhone. I feel it will reach the critical mass in about three to four months when they sell 3 plus million phones across the world. They have SFR,ATT and China telecom launches in coming months. Which means there are three million customers for the app developers to sell. I never understand why all the techsites and tech journalist belittle Palm’s app store. Put it simply, as a Palm developer you have 2 million customers to sell(now) and your app is one of the 2000 apps. Compare this to 85 million iPhone user base but the a new app developed will be one more to the existing 185K apps.
    I guess someone need to do a math on the probability of selling app between these two platforms.

  14. Fabulous

    Maybe I am missing something, but what would be the benefit for Facebook? I see only cons: FB has universal appeal across devices, why risking to become a niche on mobile devices by getting the other device vendors angry and potentially losing all the pre-loaded deals, going into a low gross margin business, distracting management by trying to turnaround a subscale hw business they have no experience with. While it might be a good idea for Palm, very bad idea for Facebook

  15. marcospolanco

    Brilliant. Palm cannot think of itself within its existing business model, which is shot. The key is delivering tactility to someone else’s. Marshall McLuhan says “The medium is the message.” People, the medium is touch and if brands such as Amazon, Facebook, New York Times and Hollywood allow third parties (e.g. Apple) to interpose themselves in their customer relationships, they deserve to lose their franchises. It’s about exclusive content relationships, if you are to have a prayer against Apple.

  16. Interesting. I’d be concerned that the appeal of a Facebook phone at present would mainly be to younger people. The type of buyers who probably can’t afford the expensive required data plans.

    Maybe Google could buy them and rebrand it a Google Phone. Oh, wait… Nevermind.

  17. Hard to think of anything worse for Facebook to do. We are at the birth of what I term the ‘smart social mobile web.’ The Facebook social ecosystem continues to grow by leaps and bounds and they have very effective apps for smartphones (the ones that matter).

    Taking ownership of a specific mobile OS/handset would needlessly have Facebook focus on that one particular OS. Their ability to thrive across multiple smartphone OS’s is a critical value. Can’t imagine Facebook would even consider this.

  18. HereAndNow

    Palm could consider putting a WebOS skin on Android (much like HTC has done with Sense). This would:

    1. differentiate their Android smartphones from other vendors.
    2. eliminate the cost associated with keeping WebOS on par with iPhone OS, Android, WinMo 7, etc.
    3. eliminate the lack of apps issue. Their users would have access to the entire Android market.
    4. allow them to focus on creating great devices (smartphones, tablets, …).
    • stencil

      There’s an article on Techcrunch saying old mgnt is out, new blood coming in. IMO, they should seriously consider your suggestion. Ditch the h/w, develop a skin for Android, and maybe partner with HTC. I’d take a look.

    • jbrandonf

      Sure. At a time like this Palm can definitely afford to flush all the R&D money that went into webOS and spend more to skin Android.

      There was some kind of rumor about this a month or so ago and Palm engineers literally laughed it off.

  19. I own a Palm Pre and there’s nothing more I’d like to see than the company and their products (especially WebOS) survive.

    That said, I really hope Facebook does NOT buy Palm. Given Facebook’s privacy breaches, a Facebook Phone would make me very nervous: they love mining users’ data to make money, they have a habit of sharing massive amounts of user data with other businesses without asking, they have a tendency to set new privacy “features” as open as possible by default.

    I would feel very wary about them knowing EVERYTHING about me, where I travel to (my GPS in the phone) who I call and when, all of my text messages back and forth, what apps I download, etc. Do people really want to break up with their girl/boyfriend and immediately see ads for a dating service?

    Yes I realize Palm and Verizon now have much of this information, and Facebook knows some of the rest… but I prefer many companies knowing a little bit about me than one company knowing everything about me.