Comments on: Compaq Revenue to be Higher than Palm Revenue

http://www.theregister.co.uk/content/2/19767.html

There's an untold story behind those Dataquest/Gartner numbers. Dataquest is reporting the manufacturer sell-in of products -- the money we at Palm get for the products we sell to the dealers this quarter. Because we stopped shipping many products for part of this quarter, in order to clear excess inventory, our revenue is artificially low at the moment. That doesn't mean our products have stopped selling -- it's just that a lot of the units selling now are ones we booked revenue for last quarter.

Also, we have put on some price promotions that have further depressed reported revenue this quarter.

In terms of actual sales to customers, retail share of the Palm OS in the US (as measured by companies like PC Data) continues to be stable about 90% share.

It's unfortunate that the coverage of the Dataquest/Gartner report isn't making any of this clear.

Mike
CCO, Palm Inc.

We could just as easily state that Ford Motor Company is going to be shutting down factories and sending 75% of it's workers home because their numbers are down compared to Rolls Royce. What numbers? Depends on who you want to make look good or bad.

I also find it interesting that this should be released on the MSN channel, instead of more important stories, and released before any real numbers are available. It has been a very effective technique to undermine a product by weakening consumer confidence.

As far as bulk sales are concerned, corporate bean counters have never had a reputation for efficiency. It does not surprise me that the buyers who have freedom from the restraints of corporate purchasing departments are the ones who buy more Palm products. I would be the first to say that Palm's marketing strategy has been sub standard, especially in light of Microsoft's marketing brilliance. But in the light of that marketing imbalance, if the Pocket PC was equal to, or better than, Palm OS devices, Palm's doors would have been long closed and rusted shut.

You may say that Palm's time is coming to an end, but I don't think so. They have come to a low point in their history, due in part to laziness and assumptions about what consumers really want. But this has already awaken them from their nap, and a leaner, more intense Palm will result. Is the Pocket PC outselling Palms this year? The answer is the same as last year, and the year before that, and the year before that: No.

In closing, I can't say that Palm will be around forever... we almost lost Microsoft recently, but it is encouraging that there is more activity in the Palm OS product field than ever before. Not only does the PPC have Palm to deal with, they also have HandSpring, HandEra, Acer, and now Sony to deal with.

Altema

The other part is don't trust any statistics you don't manipulate by yourself and never trust an analyst or market researcher, they are limited in their minds and have a specific motivation to say things in an unreal way - they do their job for money and from whom they get it!? Think about it! Palm isn't at the end, we see a new begining!