Can Palm Get A Grip On Its Business?
It’s been a few days since Palm announced disappointing financial performance. The Palm Pre, which has been the last bastion of hope for Palm to gain any momentum in the increasingly competitive mobile industry, hasn’t delivered, and Palm is suffering. There’s a lot of rumors as to what will happen to the company and its future as a key mobile player…
The biggest problem Palm had this year was the lack of sales. The demand for the Palm Pre, and its ‘sister’ the Pixi, has been so low, that Palm has been left with a huge amount of excess inventory. And not just a few thousand — over half a million. According to Reuters, Palm shipped 960K units and only put 408K in the pockets of mobile consumers. As a result, Palm’s shares dropped nearly 30% since Thursday and Reuters also reports that Palm has lost half it’s market value since the year began.
Web whippers claim that carriers like Verizon and Sprint didn’t pushing the products enough, or give them a proper marketing campaign (like the Droid, or iPhone). There’s also questions of whether it was a mix of retailers heavily discounting the Pre and Pixi to the point where there was hardly any profit on the side of Palm.
As a result, Palm Chief Executive Jon Rubinstein gave the understatement of the year:
“Our recent underperformance has been extremely disappointing to me personally,”
But now here’s where the ‘fun stuff’ comes in. Rubinstein apparently downplayed the idea that the company would be acquired, even though rumors have been running rampant for quite a few months. Everyone from Microsoft, Nokia, Dell, and HP have been noted as “suitors” to the dying darling of the mobile industry. Still, some maintain that the company may be taken privately. Rubinstein did note that no further carrier launches were coming although AT&T hinted the Pre would be coming to them eventually.
Among all the hubbub, Digg founder Kevin Rose had this interesting tweet:
RIP PALM :\ they need to move to android as fast as humanly possible
Android then? Will Palm abandon Web OS to move to Android? Unlikely. They dumped a load of R & D into Web OS, and it’s worthy of noting it’s quite sexy.
So will Google be buying Palm? That’s the rumor that gets around the web a lot too. And why not? Google buying up Palm could be the best idea yet. Think about it: Android could be tweaked in most likely, less than a month to run on the Palm hardware. It’s already an ARM CPU. Google would absorb tons of Palm’s patents on mobile devices and could also scoop up some interesting intellectual property. Not to mention pour some more fuel on the Google Vs. Apple wars. (Even the NY Times and CNNMoney reported that Palm has some very worthy IP.)
But besides that, it would open up the Pre and Pixi to a whole new world. Part of gaining mobile traction is the appeal of the applications on board. A smart phone tends to only be a good as the apps it runs, and Palm Web OS developers are sadly few and far between.
And even though it’s all still speculation, it’s still worth noting: because whatever company ends up scooping up Palm, there’s sure to rise some interesting technology out of the ashes. If it’s a big name like Microsoft or HP, there could even be channel implications, especially since Microsoft is pushing Windows Mobile Series 7, and HP’s video-conferencing moves may benefit from more mobile technology.
That being said, we should definitely keep out eyes on Palm. Something is coming, something soon, and it’ll be big, whatever happens.