As had been speculated since the beginning of the year, Palm’s journey as an independent company ended last month with an acquisition announcement by HP. Palm was the trailblazer in the handheld PC market with its Palm Pilot line of devices, and then the smartphone market with it Palm Treo devices. While the company lost its lead in those areas, as recent as early 2009, it still had the opportunity to recapture its former glory.
To understand Palm’s fate and why it ended up where it did, one need only look at Motorola to see what Palm should have done. Motorola fell into the same trap as Palm by resting on the success of its RAZR line of phones. Just as Palm was the king of the smartphone market in 2005, Motorola was at the top of the cellphone market with the RAZR. Motorola found itself in the same position as Palm in early 2009. It needed to redefine itself to recapture market momentum.
How did Motorola recapture glory with the Droid, while Palm could not do the same with the Pre?
1. Partner selection
Motorola forged a partnership with the #1 carrier in the US – Verizon. Verizon was in dire need of a device to compete with AT&T and the iPhone. It had the desire and poured all the necessary resources into a $100M+ ad campaing supporting the Droid.
By contrast, Palm chose an exclusive relationship with Sprint, the #3 carrier in the US that was losing subscribers to both Verizon and AT&T at a rapid rate. Sprint was anxious to stem its subscriber losses and figured the Pre could do the trick. Unfortunately, Sprint did not have the resources to launch a significant ad campaign in support of the Pre, so Palm was left on its own to promote the device.
The result: Motorola’s launch was a huge success which continues today, while the Pre launch was a dud and never recovered.
The Droid ads were edgy and defining. Verizon made no bones about going directly after the iPhone with its ads and positioning the Droid as a device that could not only hold its own against the iPhone, but in many cases surpass it. In effect, the Droid ads turned the device into a must have for Verizon users.
Palm’s advertising strategy for the Palm was confusing, to say the least. There did not appear to be any strategy or clarity of messaging, and, worse yet, the commercials were even painful to watch in most cases. An example from each ad campaign shows just how different the two approaches were.
Perhaps Palm’s biggest downfall was focusing on both the hardware and the software for the Pre. Many technology pundits argue to this day that WebOS is the best smartphone operating system on the market, but by owning both the software and hardware, Palm spread itself too thin. Perhaps it was John Rubinstein’s Apple roots that led him to believe that he could follow the Apple model, but Palm did not have the resources to continue to innovate on the hardware and software, while at the same time courting developers and building an ecosystem around webOS.
Motorola, on the other hand, focused exclusively on the hardware and leveraged the developing ecosystem around the Android OS. The leverage for Motorola was that it did not have to worry about developing and nurturing the Android ecosystem, Google did it for them. By freeing up resources, Motorola was able to focus solely on the hardware and has been able to continue innovating on the hardware beyond the Droid, while Palm has seemingly been at a standstill since the launch of the Pre.
In retrospect, Palm recognizes that it made fatal mistakes in how it handled the Pre launch – Jon Rubinstein admitted as much in an interview with Fortune a few weeks before the HP acquisition. Unfortunately, as my high school class motto stated, “Life can only be understood backwards, but it must be lived forwards.”
I, for one, am sad to see Palm go. Nothing will be able to replace my fond memories of my first handheld PC, the Palm V. Rest in peace, Palm.