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How Palm Could Lose Everything Editorial

The Motley Fool is wrapping up the end of the year with two days of back-to-back "Foolish" coverage of Palm. With one week to go until Palm's big "new-ness" January 8th announcement at CES in Las Vegas, contributor Tim Beyers offers up the second of two nicely-written pieces. This one is entitled "How Palm Could Lose Everything" and offers up an outlook that is not quite as gloomy as the title might suggest. In short, Beyers offers a myriad of reasons why he feels next week's opportunity could be Palm's final chance to recapture some of their former glory.

In a refreshing change of pace from some of the poorly-supported pieces we've seen in the past, Beyers offers a resounding amount of hard, empirical data to substantiate his feelings about Palm. For example, recent Canalys shipment numbers from the leading smartphone vendors are offered to support the sentiment that "closed systems are crushing open systems" and Beyers and his colleages at the Motley Fool see no reason for 2009 to deviate from the trends of the past few years.

Later in the article, Beyers goes on to state that Palm's increased openness has led to its decline in both industry influence and marketshare. Prominent mention is also made of the stillborn Foleo project in 2007 that distracted Palm from their smartphone focus while draining the company of precious engineering resources and capital. Surprisingly, no mention is made of Palm's strongest hardware effort in years, the recent Treo Pro. Despite Beyers' claim that "Carriers like the closed systems better", no mention is made of the utter lack of carrier support for the Treo Pro to date, nor is the reportedly short-lived Treo 800w mentioned as a carrier-supported but still under-promoted effort either. Indeed, Palm will need to ensure that Nova is not only a strong OS and partnered with solid hardware out of the gate, but carrier and developer support will be additional crucial requirements.

Like so many of the PIC faithful have posted over the past few years, Beyers draws parallels between the beleaguered Palm of 2008-09 and Apple in the dark days of 1996-97, prior to the return of Steve Jobs following the tenure of Gil Amelio and the debacle of the Copland OS project. With Jon Rubinstein now at the helm of Palm's future product efforts, the article gives a none-too-subtle nod to the Rubinstein's iPod as arguably the most successful closed system in recent years, with Palm hoping that Rubinstein can work his magic a second time. In a week's time, we will hopefully have a much clearer picture of Palm's product roadmap at least through the first half of '09.

Despite being a strong overall effort, the article does contain one small typo that should be noted: it states that Palm has been selling Windows Mobile-based Treos since 2005 when in fact the first WM-based Treo, the Verizon-exclusive Treo 700w, launched in January 2006. In fact, 2005 was a transitional year for Palm somewhat analogous to what we are experiencing in 2008 and 2009, as Palm released their final Palm OS handhelds with no new smartphones to bask in the success of 2004's Treo 650.

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Ponzi OS

Gekko @ 1/1/2009 5:01:09 PM # Q
>RE: FrankenGarnet Lives!!!
Gekko @ 3/20/2008 9:59:47 PM #
IMO, this cobalt demo was simply part of a fraudulent scheme with capricorn one-like-fakery to fool stakeholders and try to stay one step ahead of the truth. just like a pyramid/ponzi scheme, it's only a matter of time until you get found out.


RE: Ponzi OS
mikecane @ 1/1/2009 5:42:30 PM # Q
The internal code name was Madoff.

Reply to this comment

That editorial is utter nonsense

FrequentVisitor @ 1/1/2009 6:03:23 PM # Q
Palm ALREADY has lost everything.

Palm's failure as a company had nothing to do with whether it had an open or a closed system. Palm failed because it has been led by some of the most incompetent CEOs and so-called "managers" ever to walk the face of the planet. They literally have snatched defeat from the jaws of victory, year after year after year after year. Prime example: in 2003 Palm had all of the pieces needed to completely dominate RIM in the business email market. Yet they didn't even try to get into that market. In 2005 Palm should have released both a Treo Pro and a TX with a cell phone radio running a Chatteremail equivalent capable of linking to SEVEN's email software. Add online syncing with PIM, online backup, native MS Word/Excel/PowerPoint and PDF compatibility and Palm would be worth what RIM is now.

Where was Palm's competitive offering in the MP3 player market? Same. Personal media player market? Same. Solid state netbook (Fooleo)? Palm incompetence delayed its release until its 2 year old specs doomed the Fooleo to a quick, certain death had it actually been released. How long did it take Palm to stop trying to milk the Treo 600 forever and bring out a smaller form factor smartphone (Centro)? Even to this day no flip phones are available from Palm. Palm DESERVES to fail. They've earned it.

The article is correct in one thing, though. Palm needs to ship a cohesive package this time around if they plan to survive. Just an OS or just a phone is not enough. The problem is that all of Palm's competitors are smarter than Palm, are bigger than Palm and have more programmer talent than Palm. What can Palm offer that Apple can't? Nothing.

Going with Cobalt and brute forcing that dog of an OS with 400+ MHz processors might just have been a better choice than sticking with Garnet 5.9999999999999. An even smarter solution would have been to port the PalmOS PIM to Windows Mobile and license StyleTap. Imagine where Palm would be today if they had done that in 2003 instead of wasting 5 years and countless millions on Fooleo, Nova, etc? I suspect they wouldn't need to have cancelled their pathetic online backup service like they just did. Well done, Palm. Welcome to your FINAL NEW YEAR.


RE: That editorial is utter nonsense
freakout @ 1/1/2009 9:07:12 PM # Q
What can Palm offer that Apple can't? Nothing.

Except not being Apple. Almost reason enough for me...

RE: That editorial is utter nonsense
slcroucher @ 1/2/2009 5:44:20 AM # Q
I agree Palm has lost everything. That said, Palm could still grab back some market share with a good device and plenty of clever advertising.

The iPhone offered nothing extraordinary when released, it even used a slow out-dated network for data, but was hyped up and has sold well. Don't forget that Apple came to the PDA market before Palm with the Newton which eventually fell by the wayside.

Assuming Palm don't do something silly like putting Medhi Ali and Irving Gould in charge, or release a bloated and slow OS on their new "phone" then they could do well.

It might also be worth nudging Ed Colligan slowly towards retirement. Sure, he is a nice chap and has had some good ideas in the past, but he is partly to blame for the direction Palm have gone in.



RE: That editorial is utter nonsense
DrewT3 @ 1/2/2009 6:12:42 AM # Q
Palm needs good hardware and software to survive. I can imagine them contracting out for some modern hardware design since it must be getting hard these days to source small square screens and wireless chips without wifi.

What I find harder to believe is that Palm can write all the software they will need to write to compete in 2009. What software have they written since 2003?

RE: That editorial is utter nonsense
LiveFaith @ 1/2/2009 10:49:15 AM # Q
Drew, they had better be serious when they say they have been developing this since 2004'. I don't believe they have in a significant way, but this (and Foldeo) had better been where all those engineering resources were going while they flushed their market share and prominence with the underwhelming T|5, T|E2, and endless Treo 600 remixes.

It's full count, 9th inning, 7th game, 2 outs, and no more foul balls are allowed (like softball) ... the pitch is on the way Jan 9. Either Palm gets at least even here or EP and co will go for the auction block. I really don't think they have to leapfrog the Apple, BB, and HTC to survive, but they had better pull "even" or the cash clock with strike 12 this year.
If they deliver a fat, SSS Pro, with Garnet that multithreads, and 2.5mm audio, then I'm throwing in the towel (Treo 680) before I have to turn out the lights around here.

My odds say 75% that Palm lays an egg (or lies about a coming release), 24.9% that they release something market worthy, and 0.1% that they wow us and the tech world. I hope I look foolish with these #s, but I've looked foolish for to long on the flip side.

Pat Horne

RE: That editorial is utter nonsense
joad @ 1/3/2009 10:22:16 AM # Q
January 8: Palm's day of the "Hail Mary."

(Maybe that's Nova's internal name?)

RE: That editorial is utter nonsense
SeldomVisitor @ 1/3/2009 10:32:01 AM # Q
Palm's problem, IMHO, is they have not played DOWN that date enough - the Me-Too Media has taken Palm's single little tease and magnified it to stupendous proportion, proportion that Palm will have a hard time matching with reality.

Roger McNamee, again IMHO, apparently TRIED to downplay what's going to happen:

== "...We're not looking for some sort of miracle," he says.
== "We're looking for a slow and steady buildup, and then to take
== off at some point in the future..."

http://www.businessweek.com/@@drEvrGYQs17jJwYA/technology/content/dec2008/tc20081223_625565.htm

RE: That editorial is utter nonsense
AdamaDBrown @ 1/5/2009 11:14:20 AM # Q
SV, I agree completely, but I think what's happened is kind of inevitable. Palm's playing on a big stage, and it's assumed that if they think what they've got is worth teasing than it has to be comparable in scope to the G1 or iPhone.

RE: That editorial is utter nonsense
hkklife @ 1/5/2009 11:39:20 AM # Q
Adama & SV;

You guys are probably best equipped to give proper linkification & fact debunking so I'll toss this one out for ya:


Over the past 3-4 weeks I've been reading little tidbits here & there (TreoCentral, Brighthand, Engadget & other blogs etc) about the positive "fantastic" buzz Nova is getting etc. Supposedly Palm showed Nova to a test group of tech-savvy teenage boys and they were ecstatic about it. Is this a bunch of fanciful thinking by the handful of remaining Palm apologists or a last-minute astroturfing campaign? Or has someone actually posted some tangible, fairly legitimate-sounding info somewhere online after having seen Nova firsthand and I've just been amiss in reading about it? Or did someone post something that was almost immediately pulled?

I mean, we'll know whatever there is to know in a just a few days' time but I am still curious...



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: That editorial is utter nonsense
SeldomVisitor @ 1/5/2009 11:50:17 AM # Q
I have seen nothing "concrete" other than, say, TreoCentral front page =today=.

And I use that term "concrete" w.r.t. TreoCentral's words very very loosely.

Reply to this comment

gloom and doom

Ed Lin @ 1/1/2009 10:45:37 PM # Q
Boy, if this is the Palm Fan site, I'd hate to see what the people on competitor's sites are saying. Give Palm a chance, the worst that could happen is that the new operating system will be a bright flash that heralds a dead former star... Um, isn't it called Nova? :)

RE: gloom and doom
LiveFaith @ 1/2/2009 10:53:37 AM # Q
Competitor's sites don't even discuss Palm anymore. In fact few if any even consider Palm competition at this point. Palm had it's day and the competitors have already scavenged all the ideas and functions from four years ago and are busy moving forward. Palm just now decided to included WiFi on smartphones, after years of denying that anyone wanted it. I guess were still fans, but the moniker "neglected red head headed step children" may be more accurate. :-D

Pat Horne
Reply to this comment

Strange article

Nycran @ 1/2/2009 1:06:12 AM # Q
This was a disappointing article. The heading "How Palm Could Lose Everything" had almost nothing to do with the article content. I was expecting an in-depth answer to the question the heading sets up, and instead I received an article that told me very little new and actually contained 2 links for products sold by the Motley Fool (See the "Rule Breakers" and "Pattern Makers" links).

As for open vs closed systems, Palm doesn't make open systems (nor are they likely to in the future), so what on earth is this guy on about? Palm will lose everything if they continue down their current path. They must innovate to the point they create an entirely new market, a blue ocean you might say.

RE: Strange article
DrewT3 @ 1/2/2009 6:02:17 AM # Q
I didn't like the article either. It seemed to make an artificial distinction between "open" and closed phones and then credit this for success is the market. He also brought up the Foleo and said it wasn't successfull because people were confused that it had a different OS than the Treo. Huh?

The only thing he had right was that Nova needs to have a good system-wide design. It needs good hardware and a reliable and feature filled software, but it also has to be very easy for people to find, buy and load apps, music, movies etc. The market for PDA/Smartphones outgrew the computer nerd market years ago.

RE: Strange article
LiveFaith @ 1/2/2009 10:59:46 AM # Q
I agree. The idea of open vs closed has never really been the issue. If Apple had delivered the hardware / software crap like Palm has, 2 years ago, they would have been laughed off the map and never to be heard from again in the mobile device arena.

Google seems to be on course to deliver "open" systems that are generating a lot of excitement and Apple / BB are as well on the closed side. It's the product stupid! people are not going to spend money for antiquated electronics when they can get exciting electronics for the same cost. That's the bottom line.

Sounds like the ANALyst is just another clueless outside who needed an article and took a stab from something else he read. About like the majority of investment analysis and forecasting.

Pat Horne

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Nothing New Here

Caspian @ 1/2/2009 6:17:50 AM # Q
He is telling us what we already know: Palm should not have sold the software side of the business. If they want to be successful, they must control the hardware and the software and both must be done well. The question is whether they have the leadership and development talent to do either well and, unfortunately, recent history indicates that they do not.

I am one of the long time Palm users that still puts computing needs ahead of the cell phone function. I would buy a stand alone computing device, but it sounds like I won't have the opportunity any time soon. So, if there is a new device coming, it will need to do the computing function well before I will buy it. An iPhone-type device running Nova would be nice. I could run my current Palm apps and hopefully a new OS and device combo will breathe life into the Palm programming community.

David
Palm III> Palm IIIx> Palm IIIc> Sony T615> Sony T665> Sony TH55> Palm TX

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Supernova

bbtkd @ 1/2/2009 6:34:12 AM # Q
I've not been an Iphone fan, but needed a new MP3 player for the wife, and got her a Touch for Christmas (with a capital C). I liked it so I put it on my list, and I got one too. Now I have to get an Iphone, just have to wait for my Verizon contract to run out and have to wait for AT&T coverage in South Dakota (won't unlock one). Playing with the Touch around the house on wireless reminded me of when I got my first Treo, almost too fun to be legal. Now the Touch/Iphone makes the Centro laughable. Larger screen, way more and better applications, responsive, versatile, plenty of memory built in, and they have Wifi.

I'll sure consider the Nova based devices but I suspect they won't compete with Iphone - Apple had a huge head start. Hate to say it since I've had their devices for 10 years, but Palm is dead. They should call the new OS Supernova, which is defined as the end of a star. You bring the shovels, I'll bring the beer...

RE: Supernova
Caspian @ 1/2/2009 7:01:43 AM # Q
I have started researching applications that are available for the iPod Touch. If the announcement this week doesn't look promising, I am another 10 year Palm user that will probably replace my TX with an iPod touch.

David
Palm III> Palm IIIx> Palm IIIc> Sony T615> Sony T665> Sony TH55> Palm TX
RE: Supernova
LiveFaith @ 1/2/2009 11:05:06 AM # Q
** I've not been an Iphone fan, but needed a new MP3 player for the wife, and got her a Touch for Christmas (with a capital C). I liked it so I put it on my list, and I got one too. Now I have to get an Iphone, just have to wait for my Verizon contract to run out and have to wait for AT&T coverage in South Dakota (won't unlock one). Playing with the Touch around the house on wireless reminded me of when I got my first Treo, almost too fun to be legal. Now the Touch/Iphone makes the Centro laughable. Larger screen, way more and better applications, responsive, versatile, plenty of memory built in, and they have Wifi. **

Ditto! My teenager got the Touch, and I feel exactly the same way. Amazed and inspired just like my IIIe & Vx back in the day. I have been trying to do as many "like" tasks as possible to see if iPhone can handle my business needs. The only problem here is you insensitive and reckless usage of that C word. Borderline hate speech my friend. :-
Pat Horne

RE: Supernova
joad @ 1/3/2009 10:28:42 AM # Q
Biggest downside of the itouch is data input: lousy "software" keyboard. Palm has (Treo) keyboard, grafitti and stylus ability. Without good data input, it's mainly a good mp3 player.

RE: Supernova
twrock @ 1/3/2009 1:04:46 PM # Q
>> "...it's mainly a good mp3 player."

Exactly.

I'd be at least "interested" if it had something actually useful in the PIM department that could sync with my desktop machine. Otherwise, "it's mainly a good mp3 player."


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

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A Crossroad for Palm

kevinbgood @ 1/2/2009 7:55:59 AM # Q
About every decade a company hits a crossroad which either makes or breaks their stride. This point for Palm could go either way, hopefully for the positive, but with a critical crowd, demanding consumer market and analysts who stoke the fires of contempt, who knows. Seems easy to me to sit back and wait, without complaining about the "what ifs", and see what Palm is going to do. If you don't like it, quit festering and move on. If you like it, jump in and have fun.

I have been writing code for the Palm OS since 1997 and yes, they had some shortfalls, but who knows what other device is out there they may take the market by storm. The market doesn't limit us, we limit the market by canned thinking and lack of creative genius. In the later part of the 1800's men sat around the parlors and bars dreaming up all kinds of things to invent and then did it. They were not thwarted by others opinions, but pushed headlong into their adventure. For us today, we cannot let others drive us in our decisions, but need to make our own minds up as to what we use and who we buy from. Shoot, if you don't like it, build your own device and form the company to take the market. It's not as hard as you think.

Addicted to Palm

RE: A Crossroad for Palm
BaalthazaaR @ 1/2/2009 10:23:37 AM # Q
I think Plam is at it's second crossroad. At the first one they got hit by a bus but like Mustafa (Will Ferrell) in Austin Powers, it tried to stand and failing that crawled to the next crossroad that it is at now.
RE: A Crossroad for Palm
LiveFaith @ 1/2/2009 11:07:49 AM # Q
They threw out the steering wheel (Palmsource / OS) at the last crossroads. Business greed, similar to our reps in Washington (bailout anyone), simply stole the wealth for themselves and collapsed the company.

Pat Horne
Reply to this comment

How Palm Could Change Everything

palmit @ 1/2/2009 8:36:18 AM # Q
Was there also an positive acticle about Palm on that site? Why wasnt that one mention more? Even if I think its crazy to think Graffiti is going to the new "game changer" for Palm.

RE: How Palm Could Change Everything
hkklife @ 1/2/2009 8:57:53 AM # Q
That is going to be today's piece. ;-)

I wanted to get the "lose everything" article out first as it was more timely discussion fodder prior to CES and, I felt, the more compelling piece overall.

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: How Palm Could Change Everything
LiveFaith @ 1/2/2009 11:09:15 AM # Q
Palmit, bringing back the original graffiti on a device would give me hope that someone was at the wheel over there. How do you like that for high expectations?

Pat Horne
Reply to this comment

New Hardware??

Colormeweb @ 1/2/2009 12:06:34 PM # Q
Does anyone actually believe that Palm will be introducing new hardware in a week? My prediction is that they will simply have an overview of Nova which wont even be complete. I do not believe they had a choice but to say that they will be "announcing" something at CES due to all the media bashing they have been receiving lately and dropping stock prices.

RE: New Hardware??
SeldomVisitor @ 1/2/2009 12:13:14 PM # Q
Lots of Me-Too Media types have said "NEW PALM OS AND HARDWARE COMING TO CES!!!!".

It must be true then, right?

No, I don't think so, either.

RE: New Hardware??
BaalthazaaR @ 1/2/2009 1:00:51 PM # Q
Do new colors count?
RE: New Hardware??
hkklife @ 1/2/2009 1:26:30 PM # Q
My predictions:

1. A HANDS-OFF Nova "demo" *NOT* running on any "pocketable" hardware

2. LOTS & LOTS of PowerPoint slides/pie charts/bar graphs next week. Again, no hardware-releted news

3. No release date will be given or even hinted at other than 'sometime this summer' at the most specific to 'sometime later this year' at the most vague.

4. The only other Palm hardware on display will be the Centro 128mb & the Treo Pro (GSM & CDMA). The entire rest of hte lineup might as well, for all intents & purposes, be EOL'd already. Palm's cutting the company's lineup down to the bare minimum in order to survive.

5.Palm will live up to their promise of no new hardware after the CDMA Treo Pro arrives next month. The 128mb Centro will remain Sprint-only and VZW will quietly drop all remaining Palm products (regardless of OS) after existing stocks of the 700wx and the Centro are depleted this spring.

6. IF anything remotely close to finished hardware is shown/discussed/hinted at, it'll be the Treo Pro running Nova. The Treo Pro FF is going to be the next T|E for Palm (ie the company will milk it for every $ possible and then some).

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: New Hardware??
freakout @ 1/2/2009 3:56:17 PM # Q
I'll throw caution to the wind and predict that we'll see not only a demonstration of Nova (along with the usual boring PowerPoint rubbish) but some prototypes of the first hardware too - one of which will not be a QWERTY candybar.

Colligan said in one of those conference calls earlier Palm would be delivering "game-changing hardware". With their fortunes fading fast, they need to generate some fresh buzz that has nothing to do with their corporate happenings. They need to make people excited about their devices again, and with expectations riding high after those mysterious press invitations, they'd be nuts not to make sure they make a big splash.

RE: New Hardware??
SeldomVisitor @ 1/3/2009 5:19:13 AM # Q
Colligan also said "phone", not "phones", would be shipped in the first half of 2009.

I seriously doubt any hardware will be shown anytime soon. Palm is SO "close to the vest" with everything to do so would be a total paradigm shift for them(*).

================

(*) Awhile back Handspring "showed" the Treo180 months and months before it was available. That's the precedent for early disclosure, I guess. But that wasn't Palm.

RE: New Hardware??
LiveFaith @ 1/5/2009 10:24:40 AM # Q
Hoping for a hot new hotsync cradle with backlight or voice activated sync button.

Pat Horne
Reply to this comment

W.R.T. that Purported Nova 'Developer Community'

SeldomVisitor @ 1/6/2009 3:45:25 AM # Q
Palm has a few key job openings related to developers that fairly strongly suggest to THIS reader that there is no Nova developer community at this point in time:

- http://tinyurl.com/developersyeahright

What do those empty positions say to you?

RE: W.R.T. that Purported Nova 'Developer Community'
mikecane @ 1/6/2009 7:15:13 AM # Q
Means the SDK is not ready yet. So what? Same thing happened with iPhone. That they *have* advertised for these positions is actually promising.

And if there is a Garnet emulator in it, people will manage with legacy apps in the beginning. Palm will probably kick out software at the start anyway.

RE: W.R.T. that Purported Nova 'Developer Community'
SeldomVisitor @ 1/6/2009 7:35:21 AM # Q
Just the second one says there is no SDK - the other two say there's no one (or...optimistically...not enough) to interact with developers.

RE: W.R.T. that Purported Nova 'Developer Community'
mikecane @ 1/6/2009 11:09:56 AM # Q
Why would they NEED someone to interact with devs when there's no frikkin SDK?!

Obviously they realized there's no one IN-HOUSE who is the right peg for that slot, so they'll hire someone who is. By the time the SDK is ready, he - or she - will be up to speed.

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