Comments on: Palm Shares Drop on Downgrades

slug Shares of Palm Inc. hit a 52-week low on a double dose of analyst downgrades early this week. Three Wall street analysts issued gloomy reports for the company sending shares down to close around $8.45 Tuesday on overall sales and market penetration concerns.

The biggest blow came from longtime BOA/Merrill Lynch analyst Vivek Arya who remarked in a note to clients that Palm's newest webOS phones have seen "sluggish" sales since debuting on Verizon.

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Of Course 'sluggish'...

ScottG @ 2/24/2010 11:14:25 AM # Q
I have the Palm Pre since the day it came out, and paid $300 for it. Since that time we only seen 1400+ Apps come out for it, and most of them are some hybrid of 1 App turned into many Apps in different languages. Still it is missing quite an array of items that many basic phones have out of the box. Video Still Missing, Photo's being able to be saved into different photo Rolls, A weak case design that causes the slider part to come loose. Battery Life has forced me into using a 3rd party 4800 Battery and extended back to deal with this too.

As an owner of the Palm Pre, and somewhat happy with it still, I look at the Apple iPhone and the vast amount of basic apps, and I wonder why its still taking so long to see 1000's of good Apps Ported over now as a year approaches for the Pre.


RE: Of Course 'sluggish'...
grahamnind @ 2/24/2010 12:20:56 PM # Q
Much as I love Palm I bought an Android device. I really wanted to like the Pre but I am not convinced that the company has a long term future. I didn't want to invest in a platform which could be dead soon.

There's the rub. Developers won't develop unless they think it has a future. Consumers are reluctant to buy if there are not many apps. It's a circular problem. I live in England and I have never even seen a Pre in the wild

RE: Of Course 'sluggish'...
Gekko @ 2/24/2010 1:09:07 PM # Q

"June 29, 2009, is the two-year anniversary of the first shipment of the iPhone. Not one of those people will still be using an iPhone a month later. Think about it -- if you bought the first iPhone, you bought it because you wanted the coolest product on the market. Your two-year contract has just expired. Look around. Tell me what they're going to buy."

RE: Of Course 'sluggish'...
e_tellurian @ 2/24/2010 4:51:32 PM # M Q
Encase the hardware in metal. Stainless steel would be nice gives a little weight.


RE: Of Course 'sluggish'...
LiveFaith @ 2/24/2010 10:27:19 PM # Q
Which is heavier, an ounce of plastic or an ounce of metal? Will get the Pre if ATT offers. Clock ticks and Treo 680 is using a walker at this point.
Pat Horne
RE: Of Course 'sluggish'...
Gekko @ 2/25/2010 4:47:55 AM # Q

Reverend - have you checked out the iPhone? since you're already voluntarily enduring the most painful part of the iPhone experience like a self masochist - ie AT&T - what's stopping you?

RE: Of Course 'sluggish'...
abosco @ 2/25/2010 5:44:34 AM # Q
If (and that's a big if) you live in an area where AT&T is reliable, the service is incredible. At home and the office, I get full reception with 3G. I was up in the mountains last weekend, and I was only on Edge. The house didn't have Wifi. Looking up anything was agony - I have no idea how I did it with the original iPhone.

I mentioned this before, but when I bought the iPhone 3G, the service was so bad after a month that I was getting ready to return it and revert to the original iPhone. I remember walking around NYC and having one bar of 3G! Pretty soon, Apple released an update and the phone stopped dropping calls. And since then, the AT&T network has become more reliable. I know everybody has suddenly sprung a rubbery one for Verizon, but not being able to talk and do something else is a big turn-off for me. Even if the next iPhone is opened up to multiple carriers, and even though my contract is up with AT&T, I will most likely sign a new one.

m105 -> NX70v -> NX80v -> iPhone -> iPhone 3G

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dropping like a rock

Gekko @ 2/24/2010 5:42:22 PM # Q

heading back to $1.54.

it couldn't have happened to a nicer private equity firm.

RE: dropping like a rock
jca666us @ 2/24/2010 8:56:17 PM # M Q
any guesses on if palm will last until 2011???
RE: dropping like a rock
LiveFaith @ 2/24/2010 10:28:18 PM # Q
I guess they will.
Pat Horne
RE: dropping like a rock
LiveFaith @ 2/24/2010 10:30:25 PM # Q
Double down. Dolla cost average. Load the wagon.

The ANALysts have spoken as their masters have told them to.
Pat Horne

RE: dropping like a rock
Gekko @ 2/25/2010 4:43:13 AM # Q

from a financial standpoint - the company died long ago - but the corpse has been kept alive by a stream of dumb money by people think they're smarter than they are. stupidity is infinite but money is finite.

i have yet to see even one Pre or Pixi in the wild.

RE: dropping like a rock
Gekko @ 2/25/2010 4:45:04 AM # Q

by people THAT think

RE: dropping like a rock
Gekko @ 2/25/2010 5:04:40 AM # Q

by the way - i WANTED to like the Pre. i WANTED Palm to succeed. i got up early and stood in line on day one of the Pre launch and bought one. but i turned bitter quickly when i realized i'd been scammed by cheap build quality and a buggy, half-baked, crippled, anemic OS.

RE: dropping like a rock
CFreymarc @ 2/25/2010 2:35:13 PM # Q
This is not surprise at all. While webOS is a good embedded OS, the deployment is not that hot. The lack luster market performance is three fold IMO.

First is they are in a "has been third wheel" position that does not attract developers well. Second is this very compromising lack of a full native code SDK. Third, is an outright discouragement of third party hardware accessories. While there are these cool "skins" for the Palm Pixi, there is no protective licensee that I know of.

Yes, they have these ARM native "nuggets" but calling these objects from a scripted app base really compromises performance. From that, leading game and enterprise app developers are not taking the platform seriously.

Also, going from an almost "connector of the year" approach, they now only have USB Device making attachment to any third party hardware almost impossible. You won't see any cool stuff on these webOS devices like you do the iPhone with it's very stable and well supported 30-pin connector.

Now we are seeing it at the bottom line. While I could be a jerk and scream "I told you so!" I will not. More I feel somber and sad seeing the train wreck that I think is about to happen. I hope someone buys the place out right but I don't have high hopes.

IMO, If I had Palm stock options, I would cash them out. I would quit if was still employed there and move on.

RE: dropping like a rock
Gekko @ 2/25/2010 3:11:17 PM # Q

it's not just the deployment that's botched. if deployment was the only problem, at least some or all of us diehards here would still be using one - but none of us are - that's telling. i don't disagree that execution has been shitty, but the bottom line is that the phones and OS is shit.

blame the carriers.

blame the marketing.

blame the developers.

blame the economy.

blame the competition.

blame the analysts.

blame the customers.

the buck stops with Ruby.

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Let's Analize the Analysis Here

LiveFaith @ 2/24/2010 10:49:18 PM # Q
Seriously, let me say that I'm don't know whether little Palm can survive long term or not. But for the sake of sanity, let's read deeper into the analyst statement. This is classic:

"... we are concerned the window of opportunity may be closing as Google's Android ecosystem gains ground
** Only a caveman would not have seen this LAST year. Does it take that long to write an opinion? **

, (Research In Motion) (RIMM 70.35, +1.93, +2.82%) revitalizes its portfolio,
** Is this a surprise to anyone who ever heard the words "push e-mail"? Did they expect the smartphone market leader to CHANGE the way it has been doing it? **

iPhone increases its presence,
** You mean keeps selling well, because it is and has always been a phenomenal device? I'm shocked. **

Microsoft reboots its efforts with Windows Phone 7,
** Well, we seen some screen shots and it looks fresh and ambitious. Were these insiders expecting M$ to put another coat of lipstick on the CE pig? (Well, don't answer that.:-/) No. Everyone knew they were doing something major.

" wrote Arya, who also slashed his price target on the stock to $10 from $20.
** Here is the rub. This guy knew basically EVERY single piece of info above LAST year. Why did he have the stock at a $20 target in the first place? How many people made decisions based on that target? What responsibility will he (his firm) take for the failure. If they take no responsibility, then how much value does his new $10 target have?

You be the judge.
Pat Horne

RE: Let's Analize the Analysis Here
abosco @ 2/25/2010 3:01:04 AM # M Q
They were drinking the "smartphone market is big enough for everyone!" kool aid. Now that sales numbers are trickling through and they can't just blame Sprint, there is nothing on the horizon that impresses investors. Thus, downgrade.

The market has hit a cyclical rough patch, and small-cap securities are getting hammered, even if they have good numbers. If there's danger of a pullback, stocks like Palm tank. All of my blue chips are down for this week, too.

RE: Let's Analize the Analysis Here
Gekko @ 2/25/2010 4:56:59 AM # Q

1. predicting specific stock prices or markets in the short term is futile.
2. i said many months ago - stop blaming sprint. now you know why.
3. the smartphone space is survival of the fittest. there's no room for low volume niche players to last very long. you need critical mass and economies of scale. it's not efficient for carriers to keep them around and sooner or later everyone needs to turn a profit - even Palm. they tried to set expectations low with "we only need a sliver of the market" - but that's BS to try to fool investors.
4. Palm is fighting the 4 biggest tech companies on earth with limited resources - Apple, Google, Microsoft, and RIM.

RE: Let's Analize the Analysis Here
abosco @ 2/25/2010 5:28:34 AM # Q
Gekko, I'll disagree, but only in certain instances. If your primary business is selling smartphones, you're going to need more than a small sliver to survive. Palm is finding that out the hard way, I agree there. But those other companies all have other, highly profitable businesses. The only one that doesn't is RIM, and whatddya know, they survive because they have the largest US marketshare. Microsoft, Google, Apple - if they remain at ~10% of US smartphones, none of them will go belly-up. Microsoft has been throwing good money after bad for YEARS. Palm can't do that.

Arguably, the iPhone is Apple's core business. They draw in more revenue and profits from the iPhone than any of their other products. Wasn't this strictly a computer company ten years ago, and a digital music company five years ago?

The sad truth is that Palm came to market a day late and a dollar short against several well-funded, highly sophisticated competitors that got there sooner. It's honestly amazing the platform has made it this far. We weren't even sure they were going to survive to release Nova, remember?

m105 -> NX70v -> NX80v -> iPhone -> iPhone 3G

RE: Let's Analize the Analysis Here
Gekko @ 2/25/2010 5:46:32 AM # Q

agreed - yes - i was talking about Palm in the context of smartphones being their primary (and only) business. obviously Microsoft and Google subsidize (lose money) on WinMob and Android using them as a strategic loss leaders. and Apple has a variety of other revenue generators. and RIM sells the server software etc. you could add Nokia to that list too.

i just sent you an email that you may find interesting and useful.

RE: Let's Analize the Analysis Here
MythicFox @ 3/4/2010 11:23:28 PM # Q
The sad truth is that Palm came to market a day late and a dollar short against several well-funded, highly sophisticated competitors that got there sooner.

What's disappointing is that Palm all but owned this market at one point. Or at least the marketplace. It's like watching the lemonade stand outside the sandwich shop take over the building.
Palm Vx > m505 > T5

RE: Let's Analize the Analysis Here
ChiA @ 3/5/2010 9:30:01 AM # Q
Arguably, the iPhone is Apple's core business. They draw in more revenue and profits from the iPhone than any of their other products. Wasn't this strictly a computer company ten years ago, and a digital music company five years ago?

I think this only underlines that with the right vision, product and strategy Palm could have turned around within three years.

A cut throat business but let's not forget:

We've learned and struggled for a few years here figuring out how to make a decent phone," he said. "PC guys are not going to just figure this out. They're not going to just walk in.

On reflection Palm probably lost critical time with WebOS whilst messing around with the Foleo.
If only they'd used Intel Atoms then it could have been salvaged into a Windows netbook to sustain the company as it worked on WebOS. Just a thought...
Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital. Aaron Levenstein

RE: Let's Analize the Analysis Here
hkklife @ 3/5/2010 10:52:05 AM # M Q
The timeframe would have been a bit off for an Atom-based Fooleo. It was supposed to launch in Aug '07. Atom-based EEEs didn't appear until late summer of '08. Now, Palm could have theoretically gone with a Dothan/Celeron-M/915 platform but they wanted to basically do the Fooleo around beefed-up PDA hardware innards. At any rate, at this point it doesn't look like Palm would have lost too terribly much had they gone with Cobalt years ago and had some kind of early lead with a ''next generation'' smartphone platform. Missing out on the critical pre-iPhone market (04-06) with nothing more than an antiquated Treo 600/650 cost Palm dearly
RE: Let's Analize the Analysis Here
abosco @ 3/5/2010 11:37:29 AM # M Q
Cobalt had its own flaws, plus PalmSource's vision was not that of a small, nimble company. It was acting like a slow Goliath. I remember Mike Mace coming here, saying OS 6 had increased the maximum internal storage space to 256 MB. I asked why they had such a limitation, even though at the time the largest Palm OS PDA's had 16 MB RAM and about 128 MB total storage space. He replied that the 256 limit could always be increased in the future.

THEN WHY LIMIT YOURSELF IN THE FIRST PLACE?!?! Less than a year after OS 6 went GM, PPC's were coming out with 256 MB RAM. If Cobalt ever got picked up, it would have already hit the technical ceiling and needed a big software revision.

There were a lot of small, stupid decisions like that which got the current Palm into the situation it's in now.

RE: Let's Analize the Analysis Here
hkklife @ 3/5/2010 1:12:07 PM # Q
True, true, true. All of those are good points. But remember, Bosco, back in the good/bad ol' days of '03-'05, when we were waiting for Cobalt with bated breath, Palm's own devices maxxed out at 64mb. To date, Palm only released 1 PDA with 128mb RAM (TX) and 1 smartphone (the rare 128mb Centro on Sprint) at that amount. Sure, Cobalt wasn't destined for a long future but at least it was SOME kind of improvement over Garnet. Remember, the T|T shipped with 16MB RAM, then not even 6 months later, Palm announces a "major" breakthrough in RAM ceiling for OS5 and the T2 and T|C came out shortly thereafter with 32mb & 64mb, respectively.

It's been part of the entire Palm corporate culture (Palm, Handspring, PalmSource etc) to be content offering "just good enough" hardware since day 1. But in the old days (up until NVFS) Palm's OS at least ran reliably and snappily on their relatively low-end hardware. Nowdays, I would question the performance characteristics of WebOS even with a gig of RAM and a 1Ghz Snapdragon CPU.
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->Verizon Moto Droid

RE: Let's ANALIZE the Analysis Here
Gekko @ 3/5/2010 2:30:30 PM # Q

the chickens have come home to roost!

when i got out of prison, who was waiting for me? Nobody!

RE: Let's Analize the Analysis Here
abosco @ 3/6/2010 9:09:29 AM # M Q
Kris that's true, but the iPhone came out in 2007 with 8 GB of storage space. They didn't realize they would hit that technical ceiling big-time in a few short years?

Palm was desperate to get some good storage space in their PDAs. Remember the LifeDrive with its internal CF card? It was a complete lack of foresight.

RE: Let's Analize the Analysis Here
Gekko @ 3/6/2010 10:32:10 AM # Q

1. i still believe that a viable working Cobalt never ever existed - other than in photoshop screenshots, scraps of pre-Alpha code, and in the minds of fanboys. it was smoke and mirrors and subterfuge courtesy of Nagel et al. Nagel was just buying time - until it ran out on him and everyone caught on.

2. Palm's attitude for years was that incremental glacial innovation was acceptable. and that the "Zen of Palm" was good enough to carry them forever. then they floundered, Hawkins came up with the kooky Fooleo idea that everyone was afraid to tell him was dumb, and then Ruby finally came in and tried to take a Yugo and transform it into a Ferrari in a matter of months with his bitchin' tool kit. at the end of the day, it's still a Yugo and he's no Steve Jobs. note that Apple hasn't missed a beat since that putz left.

RE: Let's Analize the Analysis Here
abosco @ 3/6/2010 11:14:38 AM # Q
He's a good product development engineer. His team made the iMac G4, which is still the coolest designed computer, in my opinion. He was responsible for the design of the original iPod. He did a great job.

But it's quite different from managing an entire company. But I still wouldn't blame Ruby for the company's current problems. Ed Colligan has the fresh blood of Palm still on his hands.

m105 -> NX70v -> NX80v -> iPhone -> iPhone 3G

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RE: Check out the Chinese Manufacturer News
Gekko @ 2/25/2010 5:01:23 AM # Q

nice find. i believe it because i have yet to see even one pre or pixi in the wild - and i'm out and about a lot in major metro areas. that's a big red flag for me.


Smartphone shipments from FIH and Compal Communications to be lower than expected in 2010

Commercial Times, February 25; [Thursday 25 February 2010]

Shipments of smartphones from Foxconn International Holdings (FIH) and Compal Communications in 2010 will be much lower than market expectations due to slow sales of Palm's Pre and Pixi series smartphones, the Chinese-language Commercial Times quoted Kevin Chang, an analyst at Citigroup Global Markets, as indicating.

FIH and Compal are expected to ship one million smartphones each to Palm in 2010, the paper quoted Chang as saying.

Some other market observers had earlier projected FIH's shipment of Pre and Pre Plus smartphones to Palm to reach three million units in 2010, while shipments of Pixi and Pixi Plus smartphones from Compal will be 2.5-3 million units, he noted, adding the projections had been too optimistic.

Total smartphone shipments from FIH and Compal will reach only 2.5 million and 1.5 million units, respectively, in 2010, compared to 4-5 million and 3.5-4 million units projected previously, Chang estimated.

RE: Check out the Chinese Manufacturer News
xdreduardx @ 2/25/2010 6:09:07 AM # Q
I am dropping the Palm after 11 years of being a faithful customer.

1. My contacts have lost their categories on import from Centro

2. Memo pad also does not have categories transferred (making my 1000 memos essentially useless).

3. There is not way to tell that the backup is being done properly (see the many complaints that it is not restoring correctly). And it is no longer being done locally on my PC

4. All of my previous apps are non usable. Classic emulator crashes and does not portable for many apps and COSTS money.

5. WebOS is sluggish. Centro's PalmOS has lightning fast response.

6. Universal search is not universal. I could search on a keyword on Centro and search through contacts, memos and documents.

Lessons learned for me:

1. Keep your life organized in a stable data format. Really Microsoft extensions (Word/Excel)

2. Be ready to move your data to another phone system and not lock yourself to any particular operating system and it's apps.

Thanks for nothing Palm, after the Pre - I am done with Palm.


RE: Check out the Chinese Manufacturer News
Gekko @ 2/25/2010 6:10:43 AM # Q

so what will you use? back to Centro? other?

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