Beleaguered Palm posts third straight loss as customers defect to Apple’s iPhone, other devices

“Palm Inc., maker of the Treo e-mail phone, posted its third straight quarterly loss as customers defected to Apple Inc.’s iPhone and new BlackBerrys made by Research In Motion Ltd.,” Ville Heiskanen reports for Bloomberg.

“The third-quarter loss was $31.5 million, or 30 cents a share, compared with a profit of $11.8 million, or 11 cents, a year earlier, Palm said today in a statement. Revenue fell 24 percent to $312.1 million in the period ended in February, missing analysts’ estimates,” Heiskanen reports.

“Palm slashed jobs and closed its retail stores last quarter to curb costs as sales declined. The company has failed to update its product designs fast enough to compete with the BlackBerry or the iPhone, introduced in June,” Heiskanen reports.

“The company plans to introduce new Treo phones this summer, Chief Executive Officer Ed Colligan said today on a conference call,” Heiskanen reports.

MacDailyNews Take: We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, Nov. 16, 2006

Heiskanen continues, “The BlackBerry dominates U.S. sales of e-mail phones, with 41 percent of the market in the fourth quarter, Reading, England- based researcher Canalys said in a report this month. Apple’s iPhone had 28 percent, and Palm had 9 percent.”

Heiskanen reports, “Palm, whose handheld computers were best-sellers in the 1990s, is falling behind, said Rob Enderle, president of the San Jose, California-based research firm Enderle Group. ‘Palm is the company that should have had the iPhone first,’ he said in an interview with Bloomberg Radio. `’They created the concept of a handheld computer that could be used for these kinds of things. They fell off their game.'”

MacDailyNews Take: First off, Rob Enderle is an idiot. Secondly, the Enderle Group is comprised of Rob and his wife Mary. Some “group.” Next, media outlets that quote Rob Enderle do themselves a disservice simply by associating with an idiot. And, finally, Apple is the company that should have and did have the iPhone first, because Apple, not Palm, created the concept of a handheld computer with the Newton MessagePad, introduced in August 1993 — two years and seven months before the first rudimentary Palm Pilot debuted.

Heiskanen continues, “To improve its designs, Palm brought in Jon Rubinstein last year as an executive chairman in charge of product development. Rubinstein, who had run Apple’s iPod business, joined the company as part of a deal with buyout firm Elevation Partners. The firm bought a 25 percent stake in Palm.”

Full article here.

[Thanks to MacDailyNews Reader “MacVicta” for the heads up.]

Rubenstein is a hardware guy. What Palm really needed, back when they still had a chance, was a software guy. Brilliant software takes a long time and it requires the right people — rare people — to create. Palm ran out of time long ago. Barring a miracle that exceeds Steve Jobs’ return to Apple, Palm is dead.

49 Comments

  1. About a month back I had the good fortune to hear Rob Enderle speak at a ‘Legends of IT’ banquet. My company had an extra ticket so IT guy invited me along. It was great. Rob was typically brilliant, insightful and entertaining.

    What a night—Rob’s eloquent dissertation covered revolutionary innovations in computing and technology which of course covered Microsoft’s marvelous contributions to mankind. No mention was made of Apple, probably because everything they’ve done is a poor copy of something Microsoft did first. Good stuff. I got him to autograph a floppy disk.

    Your potential. Our passion.™

  2. Palm is failing because Palm never understood that people who buy Treos, etc. really want something that is separate from their PC, not just a dependent CRM. Today’s Treos aren’t much different than the original Palm Pilot, excluding the phone function and color screen (and maybe Windows Mobile!).

  3. Actually, Enderly does praise Apple. A lot. It’s just that it isn’t heard through the cotton in people’s ears that they put there when he criticizes Apple.

    I have a lot of Apple products, bought a lot for my company, and have a lot of stock as well, but I know that Apple isn’t perfect, and makes mistakes. nothing wrong with saying it when it happens.

    The truth is that for the past three years or so, most of what he’s written about Apple has been positive. He’s not a Dvorak who deliberately says nasty things to get hits.

    And, yes, I’ve argued with his a number of times, but he’s always responded like a gentleman, not with the insults some others offer.

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