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Despite promising smart phones and a new contract with Verizon, Palm has continued to struggle this quarter. It did, however have some good news -- an update that will enabe video recording and Flash on the Palm Pre.  (Source: Palm via VentureBeat)
The veteran smart phone maker continues to struggle

Palm was on a sharp slide over the last couple years, thanks in part to the rising success of Research In Motion's Blackberry smartphones and the Apple iPhone.  That's a foreign position for the company, as it was on the forefront of the smartphone revolution, releasing one the Treo 180 back in 2002 (five years before the first iPhone).  As the PDA market vanished and was replaced with smartphones, Palm was beat by faster competitors in the race it helped launch.

Recently, though, Palm looked to turn things around with the release of the Palm Pre and Palm Pixi smartphones which are powered by its latest operating system, webOS.  It also scored a deal with Verizon, America's largest carrier.  Despite this big boost, it delivered some disappointing news this week; it forecasted a revenue of between $300M to $320M USD in its fiscal third quarter that ends this month.  That's well below the $424.7M USD average analysts estimated.

The weaker than expected revenue was a result of poorer than expected sales.  Palm is predicted to only move 750,000 smartphone units in the quarter, down from the average analyst estimate of 1 million units.  As a result of the bad news, Palm stock plunged over 24 percent in busy trading today and yesterday.

Part of Palm's problem is that Verizon hasn't aggressively marketed the Palm Pre and has been much more vocal about its Android phones.  Some think that Palm's poor performance may sink a prospective deal with America's number 2 carrier, AT&T, which announced earlier in the year than it would carry two Palm smartphones (likely the Pre and Pixi) in the first half of this year.

Palm CEO Jon Rubinstein moved quickly to reassure employees, sending a company wide letter stating that he feels the firm will soon turn the corner, thanks to the Verizon deal.  In the letter he details plans to send 200 "Brand Ambassadors" to Verizon stores nationwide in the U.S. to help push Palm's smartphones.  He also points out that Palm does have a cash stockpile of $500M USD, which it can use to survive during a few rocky quarters.

The company also reported some good news for its smartphone customers -- a new webOS update for the Palm Pre and Palm Pixi will air today.  The update, webOS 1.4, will be initially available from Sprint only, but expect Verizon to soon follow shortly.  The update is packed with goodies, from bug fixes, to video capture and editing.  Among its best additions, though, is the inclusion of an early build of Adobe's Flash 10.  Having Flash gives it access to the internet's wealth of Flash apps and games, a catalog rivaling even the Apple App store's.  And while some of the apps may not be well suited for Palm's screen resolution, they do enjoy the advantage of being largely free (ad revenue supported).

Despite the bad news, the overall picture is that Palm may be down, but it's by no means out of the smartphone race.



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Part of the problem
By UncleRufus on 2/26/2010 12:44:28 PM , Rating: 5
I don't know who was in on the designing of that Palm Pre, but anyone with normal size thumbs has a very hard time typing anything on that thing.

Really, I was looking forward to it, and I went to check it out as soon as one was available locally.

What a bitter disappointment. The OS may be fantastic, and the phone may be a cool shape and all, but from the few minutes I spent with it, I found that keyboard to be almost completely unusable. I would have to grow my fingernails out so that I would have something to press the keys with. Trying to use my thumb, I was hitting 4 buttons at a time.

It absolutely boggles my mind. You would think that someone along the way at Palm would have spoken up and mentioned "Hey...does anyone else here have trouble hitting the buttons on this thing?"

It's kind of like those Star Wars prequels. You would think that someone along the way would have said "Hey, waitaminute, half of this movie is complete garbage!"




RE: Part of the problem
By UncleRufus on 2/26/2010 12:45:22 PM , Rating: 2
I assume that's why it was marketed primarily to women, but I have a feeling that decision was made after the phone was well out of the designing process.


RE: Part of the problem
By psychobriggsy on 2/26/2010 1:27:21 PM , Rating: 3
Surely Palm can see that a large portion of the market prefers slightly slimmer, touch-screen-keyboard devices? They've had plenty of time to design a version of the Pre with a soft keyboard, like the iPhone and many Android devices.

These soft keyboards are pretty good, with their corrections based upon where you were typing (so accuracy isn't that important - getting in the right area is all that is required) and ability to have multiple soft keyboard variants / numpads / etc.

If Palm catered for this part of the market, they would sell more devices. Of course, marketing is important, and I've only seen a few adverts in the UK for the Pre, which they sold via O2 at the time when O2 was the iPhone supplier. People chose the iPhone. Going with another carrier would have been gravy, but they messed up strategically.


RE: Part of the problem
By omnicronx on 2/26/2010 1:47:19 PM , Rating: 5
quote:
Surely Palm can see that a large portion of the market prefers slightly slimmer, touch-screen-keyboard devices?
Actually I think they saw the exact opposite, touch only phones are not even close to as large as the keyboard device market.

I prefer touch phones after using one for 2 years now, but as it stands, I assure you there are far more that prefer compact qwerty or a full keyboard.

I think they were just trying to differentiate themselves from the iPhone, not everything needs to be an iPhone clone to be successful.


RE: Part of the problem
By Diesel Donkey on 2/26/2010 8:11:12 PM , Rating: 3
I think many people are under the impression that software keyboards are better because Apple never gave them a choice. Steve Jobs said "Let there be software keyboards", and the people saw it, and they thought it was good.


RE: Part of the problem
By acase on 2/26/2010 2:09:17 PM , Rating: 4
/facePalm


RE: Part of the problem
By Targon on 2/26/10, Rating: 0
RE: Part of the problem
By Diesel Donkey on 2/26/2010 8:15:16 PM , Rating: 2
Assuming that by "normal" you mean "average", you have to remember that half of the population has smaller than average hands, and half has larger hands. I don't disagree that it might be a good idea for Palm to have a product with larger keys for large-fingered folks, but I, being someone with smaller hands, am quite happy with the size of the keyboard on the Pre. I've tried landscape keyboards, and I've found that it takes a lot of time to move my thumbs between the more distant keys. I'm far more efficient on a landscape keyboard with keys that are smaller and closer together. There's less thumb "travel time" involved.


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