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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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RE: Out
By djc208 on 2/26/2010 1:31:14 PM , Rating: 5
The problem with Android though is that because it's open they have to watch it does not fracture into a confusing mess. How long till you have 12 different versions with various levels of features and capabilities scattered across various phones. For instance the Nexus one got multi-touch but for a while it wasn't clear if the Droid would.

Not that I love the Apple model, but one advantage is that it's a consistent OS that currently all their phones can handle.

Palm's problem is that the WebOS features aren't improved enough to justify moving from an iPhone without a decent app store, and that just isn't there, nor will it probably get there with Android the new rising star. Hence the push for Flash.

They didn't help their case with those wierd commercials with the freaky looking women spouting confusing diatribes that seemed almost unrelated to what they were selling and why you wanted it.


RE: Out
By rudy on 2/26/2010 1:47:00 PM , Rating: 3
If you look at the past development of computers it started as an open system then it moved toward a closed platform then after that went to standardized software on open hardware. I thin the same thing will happen with phones and the only question is who will be the top dog or will anyone? Google, microsoft, symbian or others? But I do not think apple or palme can continue with their anorexic lineups. And I also expect Nokia and motorola to make a resurgence when the move to smart phones gets old who can manufacture capable devices at low costs comes back into play.


RE: Out
By Solandri on 2/26/2010 4:35:11 PM , Rating: 2
You're thinking of the desktop OS market, where Microsoft used its dominant market position to bully out competitors.

In the server OS market, there was no dominant player. Initially it was a balkanized mess with nearly everyone and their brother selling a proprietary OS or Unix variant. Eventually, most settled on open source Linux and BSD Unix, with a few scattered proprietary OSes (e.g. Solaris) still around but diminishing in market share.

The real question I think is, do you need backwards compatibility with your phone apps? Personally I do because I was a PDA nut. But the vast majority of people seem to have no problem switching their phones every 1-2 years. So the OS and the apps available on it probably don't matter to them like they do on desktop PCs.

quote:
And I also expect Nokia and motorola to make a resurgence when the move to smart phones gets old who can manufacture capable devices at low costs comes back into play.

I don't think that's ever going to happen. Instead, what I'm seeing is smart phones whose sophisticated capabilities are hidden behind a simple or slick interface. People aren't going to see much difference in ease of use between those and low-cost phones. And with most of the price difference hidden in monthly usage fees, there isn't going to be much up-front cost difference either.

I really think the old phone-which-is-only-a-phone is dead. Even if you aren't a PDA nut like me, there are certain modern gadgets which nearly everyone likes to have and would prefer to carry with them everywhere. A digital camera, an MP3 player, a portable game/video player, a GPS. Combine these with a phone and you essentially have a smartphone. I really do think this convergence to a single portable device with all this functionality is going to continue.


RE: Out
By Atheist Icon on 2/26/2010 5:51:11 PM , Rating: 3
quote:
I really think the old phone-which-is-only-a-phone is dead.


For some that would be true. I currently have and love my Sanyo S1. It makes and recieves calls, thats it...and damn near bullet proof. I have no need to carry a GPS, Camera, Internet Browser, MP3 player, etc., with me at all.

There are alot of cool phones out there. I was trying to use my wifes PalmPre, ehh. Same with a buddy of mine's iPhone and Droid. Do not see the point in them.

My favorite phone was my Sanyo 4930, had it for 4 years, then I picked up my S1.


RE: Out
By themaster08 on 2/27/2010 2:31:43 AM , Rating: 3
quote:
I don't think that's ever going to happen. Instead, what I'm seeing is smart phones whose sophisticated capabilities are hidden behind a simple or slick interface. People aren't going to see much difference in ease of use between those and low-cost phones.

One of the main reasons that Nokia is still the market leader is because they are one of the very few companies that still offer cost effective, single purpose mobile phones to third world and developing countries.

Even in developed countries like the US and here in the UK, there are millions of people that will only ever want a mobile phone for the sole purpose of making calls.

Now most manufacturers have shifted all of their efforts onto smartphones, Nokia are still making providing in a market that has been more or less neglected by everyone else.

quote:
And with most of the price difference hidden in monthly usage fees, there isn't going to be much up-front cost difference either.

Not everyone wants to be tied down to a contract, but the prices of sim-free smartphones is exorbitant.

This is another place where companies like Nokia excell. They also offer cost effective (albeit less glamorous) smartphones that are capable of anything an iPhone, Palm Pre or Android-based smartphones are capable of, without the ridiculous price tag.

Whilst their high-end smartphones are a jumbled up mess at the moment, my point is that Nokia target a much wider demograph than any other mobile phone manufacturer, and I feel one day this will come back to bite those other manufacturers in the ass.


RE: Out
By Diesel Donkey on 2/26/2010 8:35:31 PM , Rating: 5
I'm curious to know if you've actually tried a Pre for any length of time. In my opinion, the multitasking alone is reason enough to move to the platform. On my Pre I regularly have multiple cards open at once, and I can switch between them instantaneously. No longer do I have to close my e-mail composition screen out so that I can look something up online that I want to include in my message. I will admit that the OS can feel rather slow sometimes on the current hardware, but the combination of multitasking, excellent notifications system, and beautiful and efficient UI more than make up for any lack in speed.

On a different subject, I am really, really tired of hearing about "apps". Does anybody even know what they're saying when they demand more apps? What apps? Without any downloads, my Pre (and many other smartphones including my Treo before it) can make calls, send e-mails (with full Exchange integration), browse the web (a GREAT experience with webOS here), use Google Maps with the GPS, get turn-by-turn directions, create task lists, write memos, take pictures, listen to music, and watch videos. Just how many other things are there that people want to do with a smartphone? Clearly making fart noises is a big one, though for the life of me I don't know why. Then there are games, but already Palm seems to be surpassing Android in that area. Beyond that most every app is just internet content that's been repackaged. Certainly there are some truly useful applications like Epocrates and such, but for the most part I think people want apps because Apple has lots of them, so they must be important. Gotta have those 8,000 tip calculators!

I should say that I have found SOME apps extremely useful when paired with the innovative notification system in webOS. I have a Twitter app, a news app, and an RSS reader that alert me to updates in a most unintrusive and useful way. If they gave me updates like those on an iPhone, however, they would drive me crazy.


RE: Out
By Diesel Donkey on 2/26/2010 8:43:21 PM , Rating: 5
Woops, I left out calender, IM, and contacts usage. webOS pulls contacts info from Google, Facebook, LinkedIn, and Exchange. The same goes for the calender. It's cloud storage at its best.


RE: Out
By sxr7171 on 2/27/2010 2:59:37 PM , Rating: 2
I use an iPhone 3GS but I have no qualms saying that the Pre is actually a superior phone. It reacts and responds to user input as well as the iPhone. It multitasks. But its interface is superior to the iPhone's. So well thought out and ergonomic. While iPhone makes you stretch your finger all the way to the upper left and right hand corner and makes you press a button located in the worst place (should be on the side of the phone) the Pre never makes your finger leave the bottom of the screen to do anything.

It's really well thought out, very smooth and ahead of Android with no doubt in terms of interface.

The problem is that they partnered with the worst carrier. There STILL is no GSM variant in the US and its hard to find imported GSM versions (as opposed to Nokia where you can buy any of their models either at the Nokia store or almost any online store).

The big problem in the US is how much power we give to carriers. Everything is launched through a carrier and they dictate when you can release versions that work on other networks.

I'm not very fond of the Pre's slider, but otherwise it is also the superior phone to hold in one's hand.

What they need for me is to implement Exchange server search and to make a better designed hardware implementation. I tell you if they put that OS on something like a Nokia E66 design I would never touch an iPhone again. Also a home screen card would be nice - just a place to glance at your appointments and tasks. But the notifications on it are second to none.

It truly takes the "iPhone revolution" to the next level. Nobody has even come close to that yet, not Google/HTC/SE/Nokia.

It would truly sadden me if anything were to happen to Palm. It wold also reinforce my belief that American consumers would not know a good thing if it bit them in the ass. They only go for hype and marketing. PT Barnum was right.


RE: Out
By DCstewieG on 3/1/2010 11:10:58 AM , Rating: 2
quote:
It reacts and responds to user input as well as the iPhone.

As a Pre and iPod Touch owner...no, no it doesn't. When I use the iPod, it's easy to forget nothing is physically moving. The instant response and smoothness of scrolling is amazing. The Pre has neither of those, which is especially disappointing since its hardware is better than my 1st gen Touch.


RE: Out
By sxr7171 on 2/27/2010 2:59:53 PM , Rating: 2
I use an iPhone 3GS but I have no qualms saying that the Pre is actually a superior phone. It reacts and responds to user input as well as the iPhone. It multitasks. But its interface is superior to the iPhone's. So well thought out and ergonomic. While iPhone makes you stretch your finger all the way to the upper left and right hand corner and makes you press a button located in the worst place (should be on the side of the phone) the Pre never makes your finger leave the bottom of the screen to do anything.

It's really well thought out, very smooth and ahead of Android with no doubt in terms of interface.

The problem is that they partnered with the worst carrier. There STILL is no GSM variant in the US and its hard to find imported GSM versions (as opposed to Nokia where you can buy any of their models either at the Nokia store or almost any online store).

The big problem in the US is how much power we give to carriers. Everything is launched through a carrier and they dictate when you can release versions that work on other networks.

I'm not very fond of the Pre's slider, but otherwise it is also the superior phone to hold in one's hand.

What they need for me is to implement Exchange server search and to make a better designed hardware implementation. I tell you if they put that OS on something like a Nokia E66 design I would never touch an iPhone again. Also a home screen card would be nice - just a place to glance at your appointments and tasks. But the notifications on it are second to none.

It truly takes the "iPhone revolution" to the next level. Nobody has even come close to that yet, not Google/HTC/SE/Nokia.

It would truly sadden me if anything were to happen to Palm. It wold also reinforce my belief that American consumers would not know a good thing if it bit them in the ass. They only go for hype and marketing. PT Barnum was right.


RE: Out
By clovell on 3/2/2010 12:45:27 PM , Rating: 2
As a Pre user, myself, I completely agree. It's disheartening to see Palm in its current position, because I believe the Pre is a fantastic phone.

The Pre was, simply put, marketed completely wrong. Anand said it best - the Pre is a Cloud Messaging device. In between computers, errands, and on the road, the Pre saves my life everyday.

At a concert? Snap a shot. Hungry after? Find a restaurant. At the store and feeling inspired to make your own pizza dough? Look up the ingredents & add it to your list. New contact out of business cards? Type a memo & add them on Facebook - the Pre will do the rest. Facebook, nav, NFL (I listen to non-televised games on their local radio station via Sprint), Flash Support (F you, Apple), etc. etc. Showed up to take a drug test for a new job, but forgot to bring the printout with your barcode? Open it in your email and let them scan it off your screen.

Anytime I don't have a computer handy, my Pre saves the day, and keeps me connected in a very clean, efficient, and intuitive way. That's what it's designed to do, but it was marketed and hyped as 'An iPhone Killer?'. It's not - they're absolutely different. Palm's initial marketing campaign never communicated this - nor did Sprint's, nor did Verizon's. These dumb-5hit marketing guys have missed the entire point of what the Palm's strengths are and how they can be taken advantage of by the average user. Price specials are nice, but anybody looking to put down that amount of coin wants to KNOW what they're getting.

For anyone who wants their phone to be a Comms device more than a Multimedia device, the Pre is an amazing piece of hardware. Otherwise, get an iPhone.


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