Trevor posted some interesting thoughts on Palm’s future survival chances yesterday and I felt they deserved a place on the front page. I’m not completely convinced of all the arguments, but do share some concerns regarding where Palm is heading…
For someone who hated math at school, as an adult I find myself relentlessly fascinated by simple arithmetic and statistics. So, when I heard that there were supposedly 700,000 downloads from the Web OS app store during the Pre’s first ten days on the market, I put my investor’s hat on and started working up a thesis.
And if you read between the lines, this isn’t good news for Palm or the Pre.
There were 18 apps at launch, and this number has subsequently risen to 30 – most or all of them free, so far as I can tell. Now, I’m willing to bet that many of those Pre early adopters have been downloading most of those apps just for the heck of it and because that’s all they have to chose from.
Let’s say, conservatively, that each user has downloaded 7 apps. That adds up to 100,000 Pre’s sold. But, if the average number of downloads is much higher than that, those numbers start looking really anaemic. At a dozen downloads each, it would mean only 58,000 Pre’s were sold in the first 10 days or so. With Palm still haemorrhaging cash, I’m not sure that is enough to save the company.
Palm desperately needs to create some real public awareness of this device, not just buzz on the blogosphere. Unfortunately, Sprint’s advertising for the Pre has been lamentable, and Palm’s, while slicker than anything the company has previously done, is more warm and fuzzy than convincing.
(Aside: concepts like multi-tasking, Synergy are tough to explain to the general consumer, and that’s where all the growth is coming from.)
Changewave’s latest survey of smartphone buying intentions shows the mountain Palm has to climb, with only 8% of smartphone buyers saying they are considering the Pre (and that was during the week when Pre-hype was at its height and the first real reviews were being published). In the same survey, the iPhone commanded 44% and the Blackberry 23%.
So long as it sticks with Sprint, Palm is dead. On Verizon, it stands a chance. Unfortunately, Palm doesn’t seem to have the manufacturing capacity to produce more than a trickle of phones, and it’s going to need more than a trickle to get any kind of market traction. Some kind of international rollout is also urgently needed.
Then there are problems with the device and OS itself which have been highlighted over and over again in user reviews.
- battery life
- sluggish performance
- build quality issues
- keyboard that is too small for comfortable use
- price
- no SDK yet
- no developer momentum
- Even the Pre’s headline-grabbing multitasking, Synergy and notifications system have come in for some flak.
The Pre is in danger of falling through the cracks between the iPhone on the one hand, and the BlackBerry on the other. In other words, it comes up short as a general consumer device and lacks the corporate nous of a BlackBerry. It’s in a kind of no-man’s land at the moment. Alarm bells started ringing for me when Palm’s chief investor McNamee was vague about who the device was aimed at in an interview (with CNBC, I think); he dithered, hummed and hawed, then blurted out “Err… women.”
It’s possible that Palm will get bought out by someone like Dell, someone with deeper pockets who can give WebOS the push it needs and who’s looking to jump start a move into smartphones.
More likely though is that Palm just has to grit its teeth for a long hard slog back to profitability.
Future: unclear and uncertain.
- battery life
Battery life is main bad due to OS bugs causing battery drain. Update 1.03 has increased battery life for many users and future updates are expected to make battery life better. Plus there are extended batteries you can buy if you need better.
- sluggish performance
Again, OS updates will optimize and speed this up, though overall I’ve seen the OS quite speedy.
- build quality issues
An issue all revolutionary devices have for companies, especially given Palm is using new manufacturers
- keyboard that is too small for comfortable use
It’ve heard contrary. Most people who have had more than a day with the device grow used to the small size and like it because its so small and helps keep the device small and pocketable.
- price
The price is quite competitive at $199 after rebate. Plus Sprint saves money compared to AT&T
- no SDK yet
Not yet, though there are hundreds, soon-to-be thousands of developers in the Early Access Program and the full SDK will be public later this summer
- no developer momentum
None that you have been able to go public. The Early Access Program does have an NDA you know. The App Catalog is still beta and it appears on launch sponsors have their apps added in the App Catalog.
- Even the Pre’s headline-grabbing multitasking, Synergy and notifications system have come in for some flak.
It’s 1.0 release. Advanced options and details will almost certainly come with future updates. Though in my opinion, multitasking and notifications are fine; only Synergy needs fine-tuning
All the nice long views on it are very nice, but I think it’s much simpler – stock.
Didn’t they all sold out in the US? So if they could only manage a production run of 100,000 units, I’m not going to hold my breath on one arriving in the UK.
If they were here today, I’d go and buy one. Why? because apps or no apps, I want to at least try one. So Palm gets my money either way.
But I still have no idea of a launch date in Europe? Do they even have a GSM model in production yet?
And, once again, if O2 have the UK rights, I just don’t see people buying it over the iphone. Business people will go buy a BB storm…?
These kinds of considerations and arguments come up every time a radically new device hits the market. JayCanuck is right – there’s ample time to address and correct early problems, none of which seem like deal-breakers to me. I don’t doubt that Palm’s got options to ramp up production. How much more would people be crying out about Palm’s demise if there were huge stocks sitting around right now? It’s really a Catch-22, publicity-wise.
Honestly, if it weren’t for Sprint and the current app catalog, the Pre might have been a STRONG contender for me. I’m not saying that Apple’s App Store hasn’t changed the game, but don’t forget that the iPhone was app-free for a YEAR, and BlackBerry’s app catalog struggled for ages and still doesn’t really compare to iPhone’s.
The proletarian masses aren’t really tied to their apps. They hit it and quit it: http://news.cnet.com/most-iphone-applications-gathering-dust/. The kind of sales volume that establishes survival is based on the quality of the product that leaves the factory, NOT the third-party stuff. The Pre is still an attractive offering the moment it is unpacked.
I’m a long-time smartphone user who had ingrained habits to match and needs that couldn’t be put off any longer – not a common customer. So, I went with the 3GS in the end. But if the rumors about the Eos on AT&T are true, BlackBerry may be departing my household and my wife will keep our Palm legacy alive. I don’t think I’d have it any other way!
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