Palm's Third Act

2009 marks another year when Macworld and CES are scheduled for the same week. It’ll be a great week for product announcements, but it’ll also be a week of information overload. RSS feeds will overflow with gadget coverage. For those of us covering technology, it presents some logistical challenges, too. Which conference to attend? I’ll be at Macworld again this year, but with Steve Jobs passing on the keynote slot, it’s tempting to head to Las Vegas for CES during the second half of the week. Why? Big news is expected from Palm on January 8th.

The last major announcement from Palm was the Foleo in May 2007, a device that was cancelled only a few months later. While the device itself was a failure, the concept was not. Netbooks are quickly becoming a sizeable market with universal appeal. Palm’s experience with the Foleo has left much of the tech press skeptical of Palm’s coming announcement. Personally, I think this is going to be one of Palm’s most important announcements in its history, following its two prior acts – the rise of the Palm PDA in the mid to late 1990s and the company’s transition to smartphones after the acquisition of Handspring in 2003. A hit will resurrect the company. A flop will likely lead to its demise.

This is an interesting time for Palm. On December 22, the company announced that it had secured $100 million in an equity investment from Elevation Partners, just four days after a disappointing Q2 FY09 earnings announcement with a substantial net loss for the quater. Palm’s CEO Ed Colligan called this an “undeniably difficult period.” Indeed. With so much of the smartphone narrative and consumer excitement focused on iPhone, BlackBerry, and Android, Palm has largely been left out.

The far more intriguing Colligan quote from the Q2 FY09 earnings release concerns Palm’s upcoming announcement – “We are on track to deliver a breakthrough new platform and products that will bring a truly differentiated smartphone experience to our customers and reestablish Palm as a leading innovator in the mobile industry.”

Breakthough new platform…
Truly differentiated smartphone experience…
Reastablish Palm as a leading innovator in the mobile industry…

Sure, press releases are full of language like that, but if you’re Palm, you can’t make these statements with the smartphone market conditions the way they are and expect to be taken seriously ever again unless there is some shred of truth in these words.

I think Palm has a chance. Not a very good chance, but a chance here and I think it’s unfair to be dismissive until we know exactly what Palm has to show us. For Palm to change the smartphone market dynamics at such a critical time, the company needs a hit on January 8th. Anything less than that will turn its third act into its final act.

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  • Don Park

    I believed in palm in their hay-day, I even wrote software for the devices. Now, PalmOS is like archeology for OS designers. Palm has been trying to pull off a linux-based OS for a number of years with no success. Now with Android out, there is no chance for Palm to take market share with their own platform. The only move that makes sense to me is for Palm to continue to make great handheld devices (the Palm V is still a sexy full-screen touch device) that run Android. That is what I hope they will announce at CES.

  • http://debunkr.blogspot.com Debunkr

    “Sure, press releases are full of language like that, but if you’re Palm, you can’t make these statements with the smartphone market conditions the way they are and expect to be taken seriously ever again unless there is some shred of truth in these words.”

    You haven’t worked with some of the Silicon Valley marketing types that I have. They know they can prey on people’s desire to believe while serving up the same old hash in different ways. Most marketers I’ve seen at work will actually take worse technology and label it with these types of claims.

  • Luis Alejandro Masanti

    Maybe, and only maybe, if Palm announces something like twice as better than the iPhone, to cost half the iPhone, to begin selling the day after the announcement… somebody will pay attention.

    Any other situation will be a clear lost.

    Of course, they are going to announce that soon –6 to 9 months– they will deliver a grandiose product that they are going to define in the next weeks…
    …and they will cancel/delay it in a lesser time!

  • http://basiscraft.com Thomas Lord

    A quick look at news headlines suggests that Palm is indeed going to unveil a linux-based platform with support for legacy palm apps but also offering new support for third-party open-source apps. They started saying they would do so in early 2007. Repeated it later. And in December of this year confirmed to the press that working units were already in the hands of some third-party app developers.

    That would, indeed, make possible support for Android even while subsuming Android into a more general, more open platform. Android is quite recent to the scene and obviously did not figure into Palm’s strategic plans when they started and yet the nature of Android technology is such that it is conceivable they’ve got some “integrated Android” ready to demo in January.

    In any event, we’re likely looking a kind of pastiche platform that attempts to combine the best of several worlds with good support for legacy Palm apps. The usual way of architectural habit in Silicon Valley would be toss in some “unifying framework” – a cross-bar switch for applications in various styles (palm, android, linux-native) to arrange resource sharing, a unified “device-top” interface (akin to a desktop manager) etc.

    The press will be encouraged to focus on “the user experience”, on “user choice” (of upstream app providers), on “open source pixie dust”, and on the protection and extension of the palm legacy.

    Many palm customers directly or indirectly serve vertical-stack niches. E.g., an entire fleet of couriers or inventory managers or that sort of thing are already equipped with PalmOS devices running bespoke software for particular firms. Palm needs to satisfy that market with a plausible promise of extending the life of and enhancing the value of those investments to survive and then ideally they need to find new markets like that and a bigger slice of the general consumer market to grow. The existing base comes first, though: people will react to the January announcement either by doubling down on their investments or by fleeing for the hills to other platforms.

    Coming into the emerging device-platform market with a kind of “mutt” against other player’s pure breads is a strength.

    Coming into the emerginge device-platform market with a “rube goldberg” pastiche platform – if I’m write that that’s their deal here – is a weakness.

    At some point, various markets are going to once again remember why we used to care so much about “bloat”, especially in the awkward teen-age years of the PC industry. The last time bloat became a concern on the desktop/workstation, Moore’s law swept aside those concerns temporarily. This time is different: devices don’t work that way and, increasingly, neither does personal computing. The emphasis is on greater robustness and lower power consumption, both of which strongly disfavor the precarious “a little of everything” bloat-stacks we currently favor.

    Meanwhile, in a field of bloatware, who knows: Palm has as good a shot as anyone. And the firm is “hungry” enough (in contrast with MSFT, Apple, and Google) that carriers might just show them some interesting favor….

    Anyway, it’s dog and pony time.

    -t

  • Don Park

    I want to add that I expect Palm to _not_ announce a move to Android.

    Thomas L. – thanks for bringing up a huge point I ignored – compatibility with existing apps. Could Palm announce a new device that runs android and does not run palm apps without being eaten alive? probably not. That would be harder than Steve Jobs announcing the move from Motorola to Intel CPUs.

    What if Palm were to move to Android, and write a PalmOS emulator as an Android application? The emulator is well understood and ported to many different platforms. That would be the most feasible way to run both Android and Palm apps. If a PalmOS emulator is made available, it could run on any android phone – that would make any other handset a palmos device and make Palm yet another android handset competitor. Both are probably undesirable outcomes for Palm.

    Palm will likely announce at least a new handheld device. A netbook form factor would be a bit more interesting but no way is a 9-10″ netbook going to run PalmOS. If Palm announces a new OS, then things get interesting. Palm has already ‘announced’ a linux-based version of PalmOS so they would have to show that they are close to release – a developer SDK with emulator.

    A new device/LinPalmOs combo seems like the move they will make but I don’t think the handset world can stomach another platform. Microsoft has proved that backwards compatibility is king. Vista probably runs Win 3.11 apps. Palm needs to find a way to live with the Android/PalmOsEmulator approach.

  • http://www.kyakare.com Mumbai

    Does Palm even exist? I was a user of the Palm Handspring, but then with the mobile boom, I completely lost them. I dont even know what they do!

  • http://www.branedy.net/ Branedy

    Mumbai, Not even a fair, let alone a funny statement.

    Palm still has a handle on the mobile world. Size does matter, and size of application binaries does too. Proper, practical screen utilization and user interaction tailored to mobile resources. My T/X still has features that iPhone/iPods lack. Created literally generations ago in internet time, it’s still useful.

    If anything, Palm has made many mistakes, one of the most enigmatic is that a product, like the Palm V still has users, and admirers and has lasted longer than is classically produced in our disposable society, I still have mine.

  • HereAndNow

    Even if Palm does deliver a cool linux-based OS, it is probably too little, too late. Application developers are not likely to have the time/resources to support yet another platform.

    For the US, the key platforms to support are shaping up to be the iPhone, Android and Blackberry. Add Symbian, for the global market.

    Palm should seriously consider Android because:
    1. it is open source, so they can tailor it the way they want for the desired Palm “experience”.
    2. it already has an active community of application developers.
    3. they can focus their resources on building cool devices (revenue), instead of supporting their own custom OS (little/no revenue).

  • Grzegorz Daniluk

    In my opinion only 3 serious mobile platforms will survive. By serious I man a platform with applications market behind it.

    I can bet on iPhone as the first one. The second one will be probably Windows Mobile.

    The pattern is that a mobile platform should have older cousin – desktop platform. So the third one will be probably a Linux related platform. Maybe Android.

    And we still have Symbian with Nokia. Which according to my theory should die.

    Palm OS? What is it?

  • http://www.twitter.com/lisaLJL LisaLJL

    My Palm IIIe still works fine. Love the stylus and “Graffiti” – bought it and still use it for that reason.

    I’m tactile. I enjoy the sensation of using written hand-motion [as opposed to keyboard-entry] to enter a “todo-list item”, be it on a piece of paper or an intelligent touch-screen. I find that I use my left and right hands almost equally to pick up my Palm, tap to the list I want, and create a “written” item or note.

    The HotSync cradle plugs into an old Dell Latitude laptop running WindowsNT4. Every once in a while I backup the archive files to diskette, just for kicks [3.5" diskettes - remember those?]

    The rational side of my brain is telling me that one of these days either the laptop or the PDA will cease to function – so I’d better upgrade soon. The other rational side of my brain is saying “why upgrade just for the sake of upgrading”.

    I guess I’ll wait, like everyone else, until 2009-JAN-08 and see if I want to buy what they are selling.

  • http://www.richardsona.com Adam Richardson

    I used to be a Palm user after several years of using Psion products, so I have an affection for the company. I agree they are at a make or break point.

    The Foleo could have been a precursor of a Netbook…except it was basically a large screen and a keyboard that relied almost entirely on a Treo for the heavy lifting. It could not be used as a stand-alone device. At that point the value proposition became silly, as now you were asking people to carry around a Treo, a Foleo, and a laptop. It was just redundant. Palm did the right thing to kill it before it reached market, they should never have let Hawkins get as far with it as he did, it was an idea 5 years too late.

    I’m of the same opinion as HereAndNow, I don’t think there is room in the market for another platform. We have 2 or 3 contesting for attention going forward, iPhone, Android and Windows Mobile. If we look across at other categories where network effects are strong, you don’t see more than 2 or 3 platforms being able to survive. Neither customers nor developers want to invest in a broader array than that in the long run, at least for widespread use (niche situations may be different).

    If you care to read more I’ve written more about it at http://richardsona.com/main/2008/12/30/smartphone-platforms-maxd-out.html

  • http://basiscraft.com Thomas Lord

    Hmm…well, how’d I do with my predictions?

    Linux-based: check (that was easy – it was open source info).

    Legacy PalmOS support: negative – sorta. Interestingly cited by early reactions as a low-point in the introduction. The catch is that the current receiver of PalmOS already has a linux-based emulator for PalmOS for mobile devices. That implies (and some reports say Palm hinted) that that emulator or something similar will be available for the new platform.

    Open Source Pixie Dust: Not on display. None of the Palm’s press materials seem to even mention Linux. This is a tactical error, I think, but perhaps it reflects a deeper hardware error (e.g., no “safe” way to host a user-provided linux app because it would come to close to the phone network).

    -t