Palm: It Didn't Have to End This Way

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.

2. Messaging
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.

3. Focus
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.

Mobile Market Wrap-up for April 27

Over the past week, stories about BlackBerry filled up my reader – lots of articles and rumors about the new OS, handsets and their strategy. Well, the wait is over and RIM kicked-off its annual WES BlackBerry conference. Overall, what I saw is a little lackluster – much more evolutionary to get them close to Apple and Android but still nothing revolutionary that helps them leapfrog the market. I’m disappointed by a company that once drove mobile innovation.

The headline for RIM is it’s upcoming summer release of BlackBerry OS6. During the WES keynote, RIM showed the following video highlighting its new features:

The features are nice and the interface is slick but they have one major problem… no one wants their touch screen phones yet they continue to showcase features for touch screen phones. No matter how good the OS, consumers these days want devices that have “style” to them – just look at what Apple, HTC and Samsung are releasing this year. RIM announced two new handsets this week, evolutions of the Pearl and Bold… but no new touch screen device? I’m confused since they only showcase the new touch screen features in the OS 6 video. It doesn’t make sense. I’ve said it before and will say it again… BlackBerry needs a game changer, fast. They are clinging onto their dominance in the enterprise but slowly IT managers are getting comfortable with different platforms and are allowing workers to choose their handsets to match their lifestyle instead of forcing them to conform to one corporate-standard. Watch out BlackBerry, you could sleep yourself to death… a la Palm. I’m an avid BlackBerry user who’s ready to drop his handset for something fresh.

Google announced this week that they scrapped plans to release the Nexus One for the Verizon network. I read a few articles that criticize Google or that it’s a step back for the giant, but I don’t think so. HTC just released the Incredible for Verizon, that is… well… incredible. Should Google care? No! Why not? Because the phone runs Android, so all Google cares about is getting its OS in as many hands as possible. Google is not in the phone business, it’s in the ad business.

To end this week’s summary, I’ll give a quick update of Palm. Last week there were rumors of several possible suitors for the financially-troubled company with HTC being the “crowd” favorite. HTC officially stepped down this week (probably because Palm’s financials are just too scary). So, that leaves Lenovo as the front runner. And the troubles continue for Palm…

As always, if you see or hear anything else interesting in mobile, let us know by leaving a comment below.

First Quarter Mobile Statistics

You can say what you like about Apple. You can love ’em or hate ’em, but make no mistake, they’re delivering results – in spades. Yesterday’s quarterly results were impressive, and they were dominated by results from the iPhone. Last quarter alone, Apple sold 8.75 million units. Over the last two quarters, that makes an impressive 17.5 million iPhones have been sold.

Combining those results with other reports from around the web has led me to the following conclusions:

  1. For those who thought the desktop internet was huge, the mobile internet is going to blow it away.
    Mary Meeker and crew’s latest Internet Trends Report reinforced and built on the positive mobile internet outlook from their December mobile internet report. I recommend reading both reports if you are thinking about or doing anything mobile. My key takeaways from their latest report are
           1) mobile will be bigger than the desktop in five years,
           2) there will be 10x more mobile internet devices sold than desktop internet devices, and
           3) mobile usage is more about data (web usage, texting, etc.) than voice.
  2. Websites will need to be not only accesible but also usable over mobile devices.
    Nielsen is one of my favorite research companies because their notes are concise and to the point. A recent Nielsen study looking at the penetration rates of smartphones versus feature phones projects that smartphone will overtake features phone by mid-2011. Why is this important? Smartphone users access data and the mobile internet a lot more than feature phone users.
  3. While Apple still dominates mobile web traffic, your applications need to work across all platforms.
    Quantcast puts out a lot of great information on both desktop and mobile internet usage. They recently reported on mobile marketshare for both operating systems and handset manufacturers. Comparing the two reports against Apple’s results is interesting. In operating system market share, Apple has declined from a peak of over 75% in January 2009 to just over 60% in March 2010, while selling more units. Over the same period, Android’s market share has increased from under 8% to 17.1%. Android’s reach is expanding – rapidly.
  4. RIM’s mobile web share will improve, and overall usage for the mobile web will follow.
    comScore’s February 2010 Mobile Market Share Report reinforced both Apple’s results and the Qunatcast numbers, with one major addition – BlackBerry maker RIM still leads the race with 42% of the market. Apple’s been holding steady at 25%, and Android is quickly gaining on both at the expense of Palm, Windows Mobile and others. RIM’s low mobile web share shows just how poor their platform is for web browsing, but rumor has it that BlackBerry 6.0 will sport an improved webKit-based browsing experience. When that occurs, more BlackBerry users will use the web, and there are a lot of them.
  5. I expect growth rates in mobile internet usage to accelerate during the second half of this year. 
    Just like last quarter, the mobile web continues to grow with no signs of slowing. We’ve seen a better than 20% year-over-year increase in traffic to mobilesites that we host. All leading indicators, such as smartphone market share and shipments, point to increased usage of the mobile internet.

 If you haven’t put a mobile strategy in place for your marketing efforts, or worse yet, if you haven’t even looked at your web presence on a mobile phone, feel free to contact us. We’d be more than happy to answer any questions you have and help you develop an effective mobile presence for your service or business.

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Mobile Market Wrap-up for April 20

The big story since my last post (which I know was two weeks ago… oops) has to be the leaked iPhone 4G. Many are calling it Apple-Gate 2010. Gizmodo reported the story in which they detail how an Apple engineer left a prototype he was testing at a beer garden one evening. An anonymous stranger found the phone and tried to return it to Apple who was unresponsive, so he sold it to Gawker Media (Gizmodo’s parent company) for $5000. Hmm… something doesn’t seem right. It’s a great story with plenty of online media coverage (my reader is going nuts), but if something sounds too go to be true… it’s probably a publicity stunt. Apple’s lawyers have sent a letter to Gizmodo to request prompt return of the next generation iPhone to which Gizmodo obliged.

I’m not sure if it’s just my opinion of Apple (which should be pretty clear if you read this blog regularly), but I don’t think it’s any accident. Apple is the BEST at creating hype for their products and manipulating the media to do what they want. In the past Apple has been very secretive with their phone launches and everyone expects them to do the same this time. BUT…the market is no longer the same. New smartphones are being released, leaked or reviewed daily that shadow the current iPhone 3GS… bigger screens, faster processors, lower prices, better carriers, etc etc. Just this week I read several articles about Verizon’s new Droid Incredible by HTC. It’s a great handset. If I were a loyal Verizon consumer, I would seriously consider this device. Apple doesn’t have the luxury of waiting anymore since the market isn’t waiting for them. Times have changed and Apple’s feeling the pressure. Does that mean we’ll see more changes from Apple?

In other rumors this week, screenshots of the much needed BlackBerry OS 6.0 that’s expected to launch in July were leaked. They look good but nothing I see is revolutionary – there’s multitouch, pinch-to-zoom, and WebKit. The blogs seem excited but I expect more from BlackBerry. They need to leapfrog the competition, not just release a product that their competitors have been selling for over a year. I’ve said it before and will say it again – I love my BlackBerry but they are not giving me much reason to hang on. Sad.

To finish this week’s wrap up, I want to point your attention to Palm. I’m sure all of you heard about their financial problems and being up “for sale” with several possible suitors. Instead of speculating about their future, let’s go down memory lane and celebrate they impact they made over the years. Gregg wrote an excellent post about his experiences over the years and we would love to hear your stories as well.

As always, if you see or hear anything else interesting in mobile, let us know by leaving a comment below.

Palm: A Walk Down Memory Lane

According to numerous internet reports this week, beleagured handset manufaturer Palm is up for sale. The sale of Palm brings back memories of my first experience with their devices, the precursor to the modern day smartphone, that I’d like to share.

Fresh out of school in the early nineties, my employer indoctrinated me into the world of the Franklin Planning system to help me keep my days organized. The system was simple yet brilliant. For those not familiar, an open planner had one page with a calendar, daily schedule, and a to-do list, and the facing page was lined and ready for notes from your events, tasks, and meetings of the day.

I started each morning with 15 minutes of Planning & Solitude where I would laboriously transfer my unfunished to-do tasks and review notes from the prior day, and then plan out my current one. The planner was such an essential part of the company culture I worked in that Franklin classes were given on a regular basis and new employees were given Franklin planner kits.

But then, in 1997, everything changed….

What is that thing?
At the end of an unfinished product development meeting, we needed to schedule a follow-on. As I opened my planner to find open slots in my schedule, the Director of our software group pulled out a little handheld device that grabbed everyone’s attention, the Palm Pilot.

He fascinated us with the functionality of his new toy, but we were skeptical of its claimed capabilities. Empty promises from other failed handheld PDA efforts like the Apple Lisa were fresh in our minds, so no one was quick to give up our day planners. I, for one, could not see how this new breed of gadget could supplant the planning system that had been engrained into my way of working for the last 6 years.

Et tu?
My first boss, Jim, was the poster child for Franklin Planning. He kept copious notes, often written in 3-point font on the pages of his planner. He could locate notes from meetings that took place years in the past and kept a wealth of information in tabs through the back of his planner that he could reference at the drop of a hat.

As Jim and I clung to our planners, we watched around us as more and more of our colleagues adopted the Palm PDAs and touted its virtues. No matter how many times people showed us the device and its capabilities, we were convinced that our planners were the gold standard for organization. These Palms would never become powerful enough to replace the information we could store and collect in our trusty planners. We laughed at those who abandoned the traditional planner for what we considered “fool’s gold.”

And then it happened.

I can still remember that day in late 1999 when Jim walked into my office with the Palm Vx. Like seeing an ex-girlfriend show up at a party with her new date, that feeling of betrayal that you know you shouldn’t feel washed over me. I should have known that one of us would succumb to the lure of the Palm Pilot. It’s attraction had become too great, and now, instead of the gadget handlers being the outcasts, we, the planner hold-outs, had become the ridiculed.

I had held out for 3 years, but it was clear that the time had come to make the transition. As the decade of the nineties came to a close, I, too, decided it was time to convert and purchased the Palm Vx.

Love at first sight
The memories of opening the box, installing the software, and performing the first HotSync still linger in the back of my mind. The device had a look and feel that was as elegant as it was simple. While expansive, the functionality of the device was easy to master. Even learning a new alphabet called graffiti was accomplished in a matter of days, if not hours.

It was exciting to move to the new way of planning and to experience what so many people before me already had – the freedom to leave that bulky planner behind and to use that wonderful piece of plastic, brushed metal and glass to peruse your calendar, take notes, and manage those pesky to-do lists. Yes, those to-do lists. No longer did unfinished tasks need to be transferred day-to-day, they automatically rolled over. What a concept!

In addition to the basics, there were also all the fun pieces. I survived so many meetings sitting in the back playing a good game of Giraffe, the graffiti challenge game were you had to create the letters before they hit the bottom of the screen, or the silly puzzle game where you had to order the numbered tiles from 1-15. When you had your PDA open and were tapping the screen during a meeting, no one could tell if you were taking notes or trying to keep busy for fear of dozing off.

Even with all that functionality, it was the United flight schedule application that made the device truly indispensable for me. I traveled alot, and I mean alot, back in those days, and primarily with United. They had an app that you could download to your device, and then update every few months with their latest flight timetables. I can’t recall the exact number of times that app saved my bacon by finding alternate flights when meetings were canceled or ran over, or when I was stuck in Chicago during one of the numerous thunderstorms or snowstorms that fell upon O’Hare, but lets just say it was a lot.

There’s got to be more to life
As much as I had become attached to my Palm, I came to realize that I needed more. By 2005, carrying a PDA and phone was getting annoying. The time had come to find a device that could combine the two. While Palm was trying to lead the market with their Palm Treo line of devices, their PDA heritage weighed them down. They continued to overinvest in the ever rapidly declining stand alone PDA market at the expense of their smartphones. Upstarts like RIM, who did not have a PDA history, entered the market and quickly surpassed Palm. By 2006, Palm began to lose its mojo, which, unfortunately, it has never regained.

No matter who acquires Palm, it will mark the end of an era. Just as we watch sports stars retire and hand the baton to the next generation, it is time for Palm to do the same in the smartphone market. It tried to make one last comeback with the Palm Pre, just like a prize fighter comes out of retirement for one last shot at the title. While the product was good, the execution was not. It’s clear that Palm has lost a step and can not keep up with the latest generation of smartphone players.

In the end, Palm will always hold a special place in the annals of technology for me. I consider Palm to be one of the forefathers of the modern-day smartphone. Their innovations in the PDA space redefined what was possible, created the market for the electronic handheld PDA, and seeded the market for more advanced devices from Microsoft, RIM (BlackBerry) and Apple. Without Palm’s innovation and advancements, the smartphone as we know it today may have never happened.

Thanks for the memories.

I’d love to hear about your experiences with the Palm line of handhelds. Feel free to leave a comment with your favorite memory, story, game, application or Palm model that you owned over the years.