Rubinstein was once the hottest executive at Apple,
co-inventing the iPod, Apple's bestselling product of the last
decade. Now he leads a troubled
competitor to Apple in the mobile devices sphere and much of
the glamor that surrounded the top executive has vanished. Palm
is struggling. Its smartphones are selling poorly and it just
slipped to fourth place behind a charging Google, an ever-present
Apple, and heavily entrenched market leader Research In Motion.
Palm has a warehouse
full of unsold phones and it will likely take up to a year
to move the back inventory. By then the phones will have to be
sold at a fraction of their production cost as the technology will be
dated. Still, Rubenstein is optimistic.
interview with Fortune's BrainStorm
he states, "Clearly we've hit a speed bump. No question about
it. It’s really disappointing, and it's frustrating. But, the
company has tremendous assets. We've got a great team we've
built over the last couple of years. Remember this whole thing
was a transformation story. It wasn't like we took
something that was working and didn't run it well. We started
off with a company that had no future, and we have been transforming
it. We have arguably the best mobile operating system out there. It’s
clearly the easiest to use and has the most intuitive user interface.
We've got good products that get critical acclaim. It's in its
early stages still, but we've got great quality of apps, and new apps
coming all the time. By the time you get this published, we'll
have commerce going in Europe, which is a big milestone for us.
We've got good relationships with carriers."He adds, "We
do have $590 million in the bank, and we have a plan that carries
this company forward. Now, we need to be frugal and we need to invest
in those areas that have the best return for us, but when I read that
we're going out of business or our stock is worth zero or those kinds
of things, it defies logic to me."He takes the blame for
the company's shortcomings -- hardware problems with the initial
Sprint deployment of the Palm Pre and lack of training for Verizon
salespeople for the winter's Palm Pre Plus rollout. But he says
he and his staff have learned from those mistakes.He says
that he's not afraid of Apple's larger app catalog. He states,
"I mean, if you look at the long tail of the 150,000 or 180,000,
or whatever number Apple has got these days, it's an amazing number.
The reality is that it's the first thousand or so that matter and the
rest of it is long tail...Now, that doesn't mean there aren’t
specialty apps that people want. But there's also a lot of junk out
there."He says that the company's big
price cuts -- Buy One Get One offers for Verizon and the new
pricing: $49.99 for a Palm Pre Plus with new 2 year contract, and
$29.99 for the Palm Pixi Plus with new 2 year contract should boost
sales.And he reminds all the Palm doubters out there, "When
I got to Apple the company was dying. We brought out the iMac, and
the company was really successful, and then the economy cratered, and
we went through a major dip, which took like two years to dig our way
out of. And during that time period we invested very heavily in
R&D and Wall Street was very unhappy with us, because the numbers
looked ugly. But then when the economy turned, we had a bunch
of really cool products ready to go, the iPod being one of them, and
the company quickly scaled up to the point where the economics just
quote: Ultimately though, Verizon network and free mobile Hot Spot are what sold it for me.
quote: Its smartphones are selling poorly and it just slipped to fourth place behind a charging Google, an ever-present Apple, and heavily entrenched market leader Research In Motion.