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Palm In Trouble Again

Gordon Kelly


Palm In Trouble Again

It looks like wolf is back knocking on the door...

Palm is once more facing an uncertain future this week after posting third quarter financial results which suggest that for all the promise of web OS it had merely stalled an inevitable decline.

The key points: a loss of $22m over the last three months and - more worryingly - just 408,000 of the 960,000 Pre/Pre Plus and Pixi/Pixi Plus models it shipped to telcos over the last three months actually found buyers. This figure of 408,000 is down 29 per cent on Q2 and 15 per cent year on year suggesting the public is fast losing interest.

"Our recent underperformance has been very disappointing, but the potential for Palm remains strong," said Palm chairman and CEO Jon Rubinstein as he tried to put a brave face on things. "The work we're doing to improve sales is having an impact, we're making great progress on future products, and we're looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable - and growing - advantage as we move forward."

Well yes and no Jon. The bigger problems are threefold: when you wowed the world at the unveiling of web OS and the Pre at CES 2009 you then took six months to launch it in the US and a whopping 10 1/2 months to ship it internationally. The world had moved on. Secondly, despite the huge potential of web OS (it multi-tasks more elegantly than any mobile platform on the market) Palm does not have the financial clout to develop it at the speed it needs to in order to compete with iPhone OS and Android. Lastly, this means web OS has not caught the imagination of third party developers so the 'App Catalog' remains bereft of quality applications and consequently the type of purchases that tie users to a platform long term.

Of course Palm may yet rise once more from the ashes with some stunning new handset, though the disappointing incremental nature of the Pre Plus and Pixi Plus (pictured) don't bode well. Consequently, much as it pains me to say it, I think the time has come for one of the major Asian giants such as Samsung or LG to step in and put Palm out of its misery. Both LG and Samsung are wizards at producing formidable hardware, but when it comes to building an attractive and intuitive OSes, their end results have been about as useful as a brain surgeon in boxing gloves.

So let me spell it out once more for the cheap seats: Palm you had a brilliant vision, but you don't have the resources to develop it. Dear Samsung/LG buy Palm, make web OS your core platform, throw your millions at its development team and crowbar it onto such stunning hardware as the Beam and Mini GD880. Problems solved.

Sheesh. Do I have to do everything...


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