Palm boss Rubinstein sends letter to employees, talks turnaround
posted February 25th 2010 10:29PM
Team,
This morning we announced preliminary results for our 2010 third quarter. Since the quarter has not yet closed, it is too soon to offer exact numbers, but we stated that we expect to report revenues for Q3 between $300 and $320 million. We also announced that we expect our revenue for this fiscal year to fall below the guidance we gave to Wall Street, which ranged from $1.6 to $1.8 billion. As we mentioned in our press release, our softer than expected performance is due to slower than expected customer adoption of our products, which in turn has prompted our U.S. carrier partners to put additional orders on hold for the time being. On a positive note, we expect to exit the quarter with over $500 million in cash on our balance sheet. We're scheduled to announce our full financial results in March.
I realize this news is difficult to swallow. We made this announcement today to prevent a surprise for Wall Street when we announce quarterly earnings in March. In the meantime, the entire executive team has been working extremely hard to improve product performance, and have implemented a number of initiatives to increase awareness and drive sales.
Dave Whalen and I just returned from a very successful meeting with Verizon Wireless, where they acknowledged that their execution of our launch was below expectations and recommitted to working with us to improve sales. To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products. Early results from the stores have already shown improvement on product knowledge and sales week over week. You may have also seen a growing number of Palm ads on billboards, bus shelters, buses, and subway stations-all getting the word out about Palm.
All of these efforts are examples of how we are working to accelerate adoption and grow distribution of webOS. In the next few weeks, your management will work with you to make sure your priorities are laser-focused, primarily on helping to increase sales, improve product quality and differentiate the Palm product experience.
Our goals are taking longer than expected to achieve, but I am still confident that our talented team has what it takes to get the job done.
We'll schedule an all-hands meeting after our earnings announcement in March, and I'll be happy to answer your questions.
Go team!!!
jon
I don't understand it. This device and WebOS is absolutely fantastic and I like it far better than anything out there today. Palm should be doing FAR better. I just don't get it. Its like some wicked spell or something. Does Palm have enough capitol to develop new hardware? Or maybe start allowing WebOS out to handset manufacturers like HTC or Samsung or Sony? There has GOT to be something Palm can do! Start being aggressive and not allowing carriers to stymie your progress. Palm and WebOS Deserve much more. P.S. Slightly more solid and better hardware would definitely help.
Palm will manage I think, especially if they really stick to their "we're the underdogs with style" thing they have going on. A pixi on att free on contract could sell like gangbusters.
Problem is ..when Sprint came out with the Palm Pre all the haters came out from verizon and Att and bashed it because they knew webos was a threat to Iphone os an others,they bashed it into the ground and now that Verizon has a very good phone in the Pre Plus,people are turned off mentally and dont know what they are missing,If Sprint had the Pre Plus rt now..it would sell.If I were Palm,I would announce that new Phone I know they are stashing,do gsm versions and work on a tablet.If that doesnt work ,license web os out to everyone.
Give it a bigger screen and make it faster and I'll buy it.
@einhanderkiller
What you really mean is give you a better phone, but 1/2 the price or a Nexus One, then you'll buy it
I don't see how they expect to make it big when they are basically only available in North America(CDMA). Rim is on just about every carrier all over the world.
I am a Sprint customer, I was ready to buy the Pre when it came out i went down to play with it. Meh, is all i had to say, and i couldn't type on the keyboard. It might be wonderful for 12 year old girls and skinny guys like Josh T, but for stubby guys like me its a joke.
My buddy ditched one for the Droid and has not looked back.
The problem is the hardware sucks.
No one wants a shitty small screen.
Big screen + Snapdragon + Droid style campaign and BAM, they'd have near iPhone-level sales.
@Johnny Rockets
Bit simplistic to think that people are buying a phone because it has a faster CPU.
You should design a phone, massive ad campaign, and overtake the iphone in a few months! YOU SHOULD DO IT, MAN!!
@Johnny Rockets
So brand recognition, powerful media purchasing abilities, a massive ecosystem of peripherals, and the world's biggest app store (complete with many, many big time developers) mean nothing?
You have to love how naive some people are around here. They think it's always about the hardware.
In his email, Rubinstein mentions Dave Whalen, his SVP of Sales. Whalen is the main person responsible for all these miserable failures. Sales failures with Sprint and now Verizon. The product is great but Palm's sales and marketing have failed so badly! Rubinstein should start fixing his internal problems first - and he should start by replacing Whalen and the marketing executives who have ruined what could have been the best comeback story in years....
"We'll schedule an all-hands meeting after our earnings announcement in March, and I'll be happy to answer your questions."
...and sell the company to Apple. :D
Really, WebOS seems to be the one that does task-switching right. The problem is, well, Palm's decision to do CDMA (even worse, exclusive to Sprint, the only carrier that was losing customers) instead of pushing UMTS models from the get go to gain worldwide market as quick as possible. Oh, and that cat-n-mouse game with Apple that was just a complete waste of their own time.
Pre's failure IMHO was due to 4 things:
1. bad hardware
2. bad battery life
3. initial lag when webOS was first launched
4. Horrible marketing by Palm, Sprint, and Verizon. None of them got it right.
Funny.
Funny how all the anti-IPhone brigade were saying the massive fall in February ordered was due to the Chinese New Year! When the really story is what we knew all along - no one is buying a Palm Pre.
People that bought the Pre are moving onto Android or the Iphone. And there's no new customers coming through the door.
John, do us an F*in favor and pull those commercials of that scary lady. While I don't find it scary, it doesn't do the product justice. Pull all the creative bs in that campaign and make is easy targeting the women demographic smarter. There are a lot of business and smart savvy women out there that want this phone. They just don't know it yet. Advertise it and they will come.
Even though the Pre and Pixi and even the Plus variations were really disappointing to me, I'm still rooting for these fuckers cause WebOS has a bright future in the right hands.. Come onnnn Palm!
Palm is way too late to the party. As others have said, Palm employees better refresh their resumes, the end is near!
@ColonelKernel Palm didn't but AT&T did. But they only said first half, and that's two months to go.
So is $500M enough to make a bunch more of these commercials?!?
http://lemenem.com/tech/wp-content/plugins/wp-o-matic/cache/244df_palm_flow_ad2.jpg
:rolleyes:
I truly believe that those AWFUL ads did more damage than good - they were introducing a brand new (revolutionary) mobile OS on brand new hardware and they launched it with commercials that barely even showed either one?!? Are you fracken kidding me? Take a page from Apple (and even Motorola's) playbook and come out with some ads that actually SHOW THE PRODUCT.
Oh yeah, and a phone that has a GOOD landscape keyboard would do wonders too.
@pachi72 Problem with that is there's Android. Why would you pay license fee when one is practically free. Another issue is that it'll be Symbian all over again, several versions out on market, all incompatible. Again we're seeing that issue in the brew for Android as well.
Palm, get your device ready for China market or at least ship to Taiwan and Hongkong with good SC&TC support. You will quickly turn it around.
Well.
GSM, Verizon and good ads will make big difference.
Maybe they should dip into that $500 million and come up with a new device. The old plan of releasing stuff overseas, then in the US a year later used to work ok for foreign companies. No more.
So don't expect to release a device in the States and then on a different carrier a year later and see big uptake. You missed your window; Android is on the rise. You put yourselves perpetually behind in the apps/developer race by partnering with Sprint a year ago. Fail.
Palm needs to find a buyer. Now.
Hey Palm do whatever people on blogs say. Just let them run your company. They Always seem to know best.
@Hbishop
They are gonna need a whole lot more than prayer they are gonna need ur money! and support through showing people what Palm's phone can do.
So many missteps:
1) No SDK for months after launch = no apps. Devs already have iPhone, BB and Android to think about.
2) Poor availability at launch. Saw many people casually walk into a Sprint store and inquire about a Pre and were turned away.
3) Low quality hardware compared to other offerings at the same price point. Pre and Droid/iPhone are night and day in terms of performance and quality.
4) Lame advertising. Just show what the phone can do, don't preach some zen BS.
5) Trying to usurp iTunes in order to sync to the Pre instead of developing or leveraging your own solution. Just looked desperate and cheap.
6) Lackluster Pre Plus launch.
Apple or Google needs to buy Palm. Then take webos and run with it. I have built apps for all three and webos stands out. Apple needs to make iphone and put webos on it and get rid of iphone os or else add the multitasking features to it along with flash silverlight. The only problem is there probably would not be any competition if this happened.
License the webOS,CHEAP, to Sony/HTC/LG/SAMSUNG !!!
You have OS that much better than Android, you have a chance,not to late yet, license to them,and release world wide esp ASIA. OMG so easy , you're f*in stupid if not realize that.
First they need to improve the build quality, make a keyboard that fat fingered people can use and up the specs for us (screen size, the guts of the Pixi) and then put out some decent ads that actually show webOS'
major strong points (multitasking) so everyone else can actually realize that it exists. It's too bad they put out relatively crap hardware and their OS is being one-upped by the competition.