AT&T and Verizon help beleaguered Palm make its last stand

“AT&T Inc. and Verizon Wireless could be giving Palm Inc. its last shot at redemption,” Roger Cheng reports for Dow Jones Newswires.

MacDailyNews Take: Beleaguered Palm gets more last shots than a Soviet Olympic basketball team.

Cheng continues, “The nation’s two largest wireless carriers will sell Palm’s products, giving the struggling handset maker some hope in making a dent in the brutally competitive smart phone market. Palm on Thursday confirmed that Verizon Wireless would start selling its phones Jan. 25. AT&T, meanwhile, said Wednesday that it would carry two Palm devices in the coming months.”

“‘Now it’s time to put up or shut up for the company,’ said Roger Entner, an analyst at research firm Nielsen Co.,” Cheng reports.

Palm’s challenges are formidable… Palm’s flagship Pre smart phone won’t enjoy the marquee status it had at Sprint,” Cheng reports. “Demand for the device, meanwhile, appears to be cooling. In the last reported quarter, Palm shipped 783,000 phones to retailers. But consumers only snapped up 573,000 devices.”

MacDailyNews Take: “Snapped up” conjures up images of frenzied buying. We would have used “blew their cash and two years on” instead.

Cheng reports, “Sprint continues to position the device prominently, but it has declined to disclose how well Palm’s Pre or Pixi have sold… While Palm has been able to release two devices, the Pre and Pixi, it lacks the resources to keep churning out new products. As a result, it gets lost in the wave of hype for each new phone [unveiled by competitors].”

“Palm still makes an attractive acquisition target for a handset maker shopping around for a slick mobile operating system, analysts say, but there is little likelihood of a deal in the near term, until there is clarity on which operating systems gain traction,” Cheng reports.

MacDailyNews Take: It’s probably too late for a buyer now, but Ballmer’s still running Microsoft, so Palm has at least a shred of buyout hope remaining. Also, if they keep burning through cash at this rate, any lunatic will be able to buy them soon.

Full article here.

MacDailyNews Take: Good things don’t happen to those making their last stand. Hence the use of “last.” We’d tell you to ask Custer, but it didn’t work out for him, either (or two of his brothers, his nephew, and his brother-in-law).

14 Comments

  1. “Now it’s time to put up or shut up for the company..”
    I think that quote may aptly apply to a few zillion news/blog sites prematurely crowning it the ‘iPhone killer’ tag last year.

    I think the same idiots just crowned Andy Rubin in the same mold as Steve Jobs, if not the same league even
    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/06/AR2010010600686.html

    The idiotic rationale, Andy Rubin is just as much a perfectionist. Dude, anybody can be a hard ass for perfection, but to deliver something non-derivative and usher in culture/paradigm shifting unique products decade after decade, that might require a bit more than being a hard ass, some might opine.
    Wake me when he has one original idea worth a look that didn’t just more than borrows a page from his competition.

  2. MDN’s”take” clearly demonstrates the editor’s complete lack of business acumen.

    Palm isn’t the play, the WebOS is, and Palm owns it. Palm also owns the management team and technical staff that produced it. These are all intangibles that DO NOT appear on a Company’s balance sheet. The only thing Palm is lacking, to be a strong competitor, is cash.

    Any firm in search of a mobile strategy6 is a potential buyer of Palm Palm’s management, technical team and WebOS are worth a multiple of what Palm is currently trading for, to any firm that lacks one or more of these things.

    Among those are: MSFT, MOT, Samsung, Sony, HTC, NOK and RIMM.

    OSs that will ultimately end up being fragmented (Android and WinMobile) will not survive the new paradigm. Apple has clearly shown that a fully integrated approach is better than an OS licensed approach. There are only two modern mobile OSs today that are not currently subject to fragmentation. One is OSX (iPhone) and WebOS (Pre).

    NOK and RIMM are both fully integrated models but with an ancient and creaky mobile OS. Of the remainder MSFT is struggling to remain relevant, but if they acquire Palm they will kill any chance of success for the OS when they assert their license model with it.

    Because they haven’t shown any interest in a fully integrated model, the remainder of potential suitors desperately need Palm’s management, which understands it.

  3. Gregg Thurman:

    Obviously (to most of us, at least) MDN understands that anyone who buys Palm Inc. gets their webOS, however superfluous it may be to the market at large.

    Some days around here I’m quite tired.

  4. @Gregg Thurman
    Incredible observation there, which has so far eluded the rest of the mobile manufacturing industries pining for a modern OS to compete with iPhone. I’m so glad now that you have exposed them to their blind spot, we should all now expect a mad dash to scoop up Palm, the bridge without a groom at the altar almost from the day of Elevation involvement, for a pinch of the development cost.

    I guess, MDN editor now should only wait with a baited breath as threads of discussions will ensue where we shall all mock their complete lack of business acumen.

  5. I’m a believer in “never say never”. Even though I love my iPhone, Palm does have some value to some.

    I remember in the mid 1990’s a company by the name of Apple was on a very close last stand. You can’t always predict the predictable. Ask Steve Jobs.

  6. Palm (and the rest of the mobile phone manufacturers) have the problem of large numbers of semi-functional half-baked products. Most people don’t care and can’t tell the difference between them. They only know the products suck.

    Apple has one mobile phone product. Everybody knows what it is and wants that functionality. Some people can’t afford it, some are stuck with the wrong carrier, some refuse to commit to a pricey, unneeded data plan. But everybody knows what an iPhone is. The myriad of like-an-iPhones is proof of their desirability. Who wants a Palm Whatever?

  7. “MacDailyNews Take: Beleaguered Palm gets more last shots than a Soviet Olympic basketball team.”

    Stupid comparison, MDN, sorry. The game then was re-played only because rules were initially broken when Yankees scored.

    And, there was no controversy in terms Soviets of winning by rules. There was controversy because Yankees too much wanted to bend the rules so the match would be all of sudden their won — when their winning scores were received when the match already ended.

    Nothing to do with Palm’s situation and last chances they get.

  8. ” some refuse to commit to a pricey, unneeded data plan”

    Pricey? The average complainer about ATT’s (or any one else’s) data plans spends more on latte, or cigarettes, each month.

    Unneeded? That must be why the average iPhone user is online 10X more than the average user of other handsets.

    That would also explain 3 Billion downloads from the App Store, nearly half of which are used to access the ‘net in a specialized search.

    The only complainers about the plan are the ones that have never had data on their handsets.

    Sheesh

  9. @Gregg Thurman –

    You are correct in your observation that the OS (and the team) is the value core of Palm, Inc. It’s also true that the value of those assets have been tested in the marketplace for the last (nearly) year, and that they have produced less than stellar results.

    Although lack of money is certainly the main problem right for Palm Inc.’s viability, it isn’t the reason the OS has failed. Palm spent the necessary funds to get the OS into market in sufficient quantity, with a formidable retailer, using a formidable national marketing campaign. It had every chance of doing well.

    And while it didn’t fail, it didn’t succeed as a breakout product either. Not for Palm, nor for Sprint. That seriously hurts the value of those core assets, and would make a potential suitor like the ones you mentioned (Nokia, RIMM, et al) think twice about replacing their own home-baked OS that produces run-of-the-mill results for somebody else’s OS that has (so far) produced no better.

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