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Palm Issues 10 Clarifications and Corrections on McNamee Interviews

LawyerIn a rather unusual SEC filling, Palm has composed a free writing prospectus on the subject of Roger McNamee's recent Bloomberg TV interview and subsequent article. The SEC document includes ten itemized "Clarifications and Corrections" about remarks made by Mr. McNamee from everything from Palm Pre functionality, comparisons with competing products and various market statistics.

The full document can be found on Palm's Investor Relations website. We've posted the relevant corrections and interesting parts after the break.

Clarifications and Corrections

For purposes of clarification, it should be noted that:

1. Although market share estimates such as those in the fourth paragraph of the transcript that "Blackberry's global market share is about 1.2%, and Apple's is about 0.9 of 1%" are, by their nature, approximations, one third party industry analyst report indicates that in 2007 and 2008, Blackberry's share of worldwide mobile phone shipments was 1.1% and 1.9%, respectively, and Apple's was 0.3% and 1.2%, respectively.

2. With respect to the statement in the fourth paragraph of the transcript that "in the US, smart phones went from 10% to 20% just in the last year," one third party industry analyst report indicates that smart phones made up 11.1% of U.S. mobile phone shipments in 2007 and 19.5% in 2008.

3. With respect to the statement in the fourth paragraph of the transcript that smartphones are anticipated to increase their share of the U.S. mobile phone market to "50% within 5 years," one third party industry analyst report estimates smartphone share of the U.S. mobile phone market will reach 42.0% in 2012.

4. With respect to the statement in the fourth paragraph of the transcript that "this is a huge market: 1.2 billion units sold per year," one third party industry analyst report estimates worldwide mobile phone shipments exceeded 1.2 billion in 2008.

5. With respect to the statements in the tenth paragraph of the transcript that the Palm Pre is "going to be a million times – well, not a million times – several times faster" than Apple, Inc.'s iPhone products and is "going to run rings around them on the web," the Palm Pre is still under development and it is premature to state the speed at which the device accesses the web or the relative speed of the Palm Pre compared to the smartphone products of competitors.

6. With respect to the statements in the twelfth paragraph of the transcript that "there are aspects of the Pre that are unlike any phone you've every seen before," "the Pre is the first one that is the next generation" and "the result is it does a lot of things the others guys don't do," the Palm Pre is designed to be the first phone based on the Palm webOS™ platform and as a result will have different operating characteristics and features than other phones, however; the Palm Pre is still under development and it is premature to compare its full functionality with that of other phones.

7. The statements in the fourteenth paragraph of the transcript regarding the relative development and stability of Sprint's, Verizon's and AT&T's 3G networks are generalizations regarding wireless cellular network performance that may or may not be true depending on a variety of factors specific to geographic regions .

8. The statement in the second paragraph of the article that "not one" person who bought an Apple, Inc. iPhone on the first shipment date "will still be using an iPhone a month" after the two-year anniversary of that day is an exaggerated prediction of consumer behavior pattern and is withdrawn.

9. With respect to the statements in the second to last paragraph of the article that "the underlying technology for Research In Motion Ltd.'s BlackBerry is about 13 years old, while the technology behind the iPhone goes back almost nine years," estimating one specific age for the many technology components underlying any mobile phone is inherently imprecise and these statements are withdrawn.

10. With respect to the implications in the second to last and last paragraphs of the article that Palm's new operating system will give it an edge over competitors that "are going to run out of gas way before" Palm, estimations of the relative useful lifespan of smartphone operating systems are conjecture, unverifiable at this time, and age is not necessarily predictive of their relative long-term success.

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ROFL @ Lionel Hutz

freakout @ 3/9/2009 3:33:30 PM # Q
http://www.youtube.com/watch?v=ZCy61O2wSdk

************************

Bailiff: Do you promise to tell the truth the whole truth and nothing but the truth, so help you God?

Marge: Mmm... Yes, I do.

Hutz: She sounded like she was taking that awful seriously.

**********************

Hutz: Now Marge, you've come to the right place. By hiring me as your lawyer, you also get this smoking monkey.
[sniff] Better cut down there, Smokey! [laughs]

Marge: Mr. Hutz!

Hutz: [excited] Look - he's taking another puff!

Marge: Mr. Hutz! This was all a misunderstanding; I didn't mean to take anything. [Lionel disappointedly drops the smoking monkey in a drawer full of identical critters]

Hutz: Now don't you worry, Mrs. Simpson, I - uh-oh. We've drawn Judge Snyder.

Marge: Is that bad?

Hutz: Well, he's kind of had it in for me, since I accidently ran over his dog. Actually, replace `accidently' with `repeatedly', and replace `dog' with `son'.

********************************

http://www.youtube.com/watch?v=C-v5PzE2fIg

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Yikes....

bhartman34 @ 3/9/2009 3:34:07 PM # Q
That's quite a bit of backpedaling. It seems like someone at Palm is really trying to pour McNamee a big steaming cup of STFU.

I'm guessing it sucks to be him right now...

RE: Yikes....
freakout @ 3/9/2009 3:43:35 PM # Q
^^ Maybe, but he can always roll around naked in a big pile of money if he's feeling down...

I like this:

The statement in the second paragraph of the article that "not one" person who bought an Apple, Inc. iPhone on the first shipment date "will still be using an iPhone a month" after the two-year anniversary of that day is an exaggerated prediction of consumer behavior...

No, really? Exaggerated? And here we all were swallowing that hook, line and sinker. Thanks, lawyers!

RE: Yikes....
jca666us @ 3/9/2009 4:07:37 PM # Q
Feak, I think you were the only one swallowing anything McNamee was spewing...LOL!
RE: Yikes....
Ronin @ 3/10/2009 7:47:10 AM # Q
Corporate lawyers sure know how to suck all the fun out of some good old fashion smack talk.

Maybe if McNamee had thrown in a "Yo momma" here and there this retraction/clarification" could have been avoided. As in "Yo momma's iPhone is so old it uses a wheelchair that can only roll backwards and that is why the awesomeness that is the Palm Pre with webOS (TM) will own Yo Momma come June!" or something to that effect. :)

Clearly his smack talking was not over the top enough. My advice, Mr. McNamee, next time say what you really feel. :)
In the Spirit of Umoja,
Ronin

RE: Yikes....
twrock @ 3/11/2009 1:23:32 AM # Q
Ronin wrote:
Corporate lawyers sure know how to suck all the fun out of some good old fashion smack talk.

Nice to hear someone else was having the same thoughts I was.

I was kinda laughing at the thought of someone buying a Pre and then suing Palm because McNamee had said it was a million times faster and the actual numbers are "much lower". :-)


"twrock is infamous around these parts" (from my profile over at Brighthand due to my negative 62 rep points rating)

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They have more clarifications yet to be filed with the SEC

SeldomVisitor @ 3/9/2009 3:53:54 PM # Q
RE: They have more clarifications yet to be filed with the SEC
Tuckermaclain @ 3/9/2009 8:02:58 PM # Q
Translation: It would be wrong to compare specs of the Pre with something that actually exists.
RE: They have more clarifications yet to be filed with the SEC
jca666us @ 3/10/2009 4:21:15 AM # Q
Further Translation:

Managing expectations so Palm doesn't get sued when the Pre doesn't fulfill McNamee's "pie in the sky" projections.

RE: They have more clarifications yet to be filed with the SEC
SeldomVisitor @ 3/10/2009 5:44:43 AM # Q
Unless they retract his CES words, Palm has already committed themselves to delivering an application that is running all the time that combines GPS, calendar, clock, email, texting, and more to (paraphrase):

== "It knows where you are, where you are going, who you are meeting
== with. If you're late it'll send a message to the other attendees telling
== them you're going to be late"

This oughta be fun to see.


RE: They have more clarifications yet to be filed with the SEC
jca666us @ 3/12/2009 6:12:30 PM # Q
Should be fun to see Palm's reaction to iphone's os 3.0 and 3.0 sdk being demoed and announced next week.

Speculation is that Apple will finally allow multitasking of compiled apps.

Will further retractions from Palm be forthcoming?

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Unprecedented?

mikecane @ 3/9/2009 5:41:17 PM # Q
I can't recall ever seeing a company issue an SEC statement like this before. Maybe there have been many and they've never been publicized to this extent.

I'm glad to see Palm admit:

>>>the Palm Pre is still under development and it is premature to [whatev]

That's exactly what I've thought since CES.

RE: Unprecedented?
jca666us @ 3/9/2009 6:22:52 PM # Q
McNamee needs to borrow Steve Jobs reality distortion field generator.
RE: Unprecedented?
bhartman34 @ 3/9/2009 9:22:36 PM # Q
McNamee needs to borrow Steve Jobs reality distortion field generator.

Actually, it seems to me more like he's trapped inside one. :)

Some of those comments might have justification, if McNamee actually knows something. But statements like, "Every owner of the original iPhone will switch to the Pre" are just silly.

If he was going to tout the Pre, he should've just compared the announced specs to the iPhone.

RE: Unprecedented?
jca666us @ 3/10/2009 4:54:21 AM # Q
Comparing specs (solely) isn't going to sell the Pre.

Palm needs to get in gear and release this thing sooner - rather than later.

Doesn't anyone remember the Osbourne effect?


The Osborne effect is exhibited when a company's premature revelation of information about future products results in customers not purchasing (or delaying purchases of) the current offering. Its origin is a purported suicidal marketing mistake made by the Osborne Computer Corporation in the 1980s when its announcement of a successor to its Osborne 1 system led to a sharp reduction in sales, and the delay of the successor system created a revenue vacuum from which the company did not recover.

RE: Unprecedented?
hkklife @ 3/10/2009 7:51:17 AM # Q
Yup, I commented a week or two ago on Palm's previus Obbourning efforts back in '01 when they prematurely announced the m500 series and left a huge quantity of outdated, unwanted, and unsold Palm IIIc/Vx/m100s on store shelves. I recall even stores like Electronics Boutique dumping excess Palm Vx & IIIc inventory in late 2001ish.

On the other hand, imagine if they were to rush the Pre to market now with disastrous 700w/700p/650/LifeDrive/T5-style launch bugs. You've gotta wonder what is worse, releasing a half-baked device on time or releasing a "fixed" device late and losing all of that lovely post-CES buzz.

I bet Colligan and co. are really wishing they'd never wasted a single man-hour on Hawkins' silly Fooleo concept back in '05/'06/'07. On that note, where IS Hawkins? Palm is about to release its best-ever piece of hardware with a slightly revolutionary formfactor and UI and the man's nowhere to be found. Did the Fooleo really shame the man that much? 2 outta 3 ain't that bad! (Pilot, Treo, Fooleo)!
Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p->?

RE: Unprecedented?
SeldomVisitor @ 3/10/2009 7:58:10 AM # Q
Hawkins is not affiliated with Palm anymore - why SHOULD he be around?

RE: Unprecedented?
hkklife @ 3/10/2009 8:10:42 AM # Q
Well, yes, I know but I didn't mean onstage with Ruby & Colligan @ CES etc--but rather, appearing at something Numenta-related and offering some sagely wisdom regarding the Pre.

I was actually half-expecting Palm to trot Hawkins out immediately post-CES while basking in the strong buzz ("Best of Show" etc) amidst some "this is our 3rd game-changer" type propaganda.

It seems that, for better or worse, McNamee is fulfilling the role of the rah-rah visionary evangelist role formerly occupied by Hawkins.

I suppose the way I should have phrased my previous question: WOULD Hawkins be doing Pre-motional stuff if he were still involved with the firm in any actual capacity or does he simply not want to hav anything to do with mobile tech anymore?
Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p->?

Reply to this comment

Maybe not a 'million' times faster, but...

twrock @ 3/14/2009 5:16:19 AM # Q
http://www.engadget.com/2009/03/14/pre-browser-looks-mighty-fast-in-palm-webcast/

"twrock is infamous around these parts" (from my profile over at Brighthand due to my negative 62 rep points rating)
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