Palm: this is your survival guide

Oh Palm. Just a little over a year ago your future seemed so bright, so renewed. You walked away from CES 2009 reborn, held aloft by a completely innovative new mobile operating system, a striking piece of hardware, and a feeling amongst the press and investors that you were back in the game and playing to win. Now, less than a year and a half later, you've nearly returned to the dark and desperate place you'd found yourself in at the end of 2008; a rapidly declining mindshare, the bottom falling out of your stock, and bad dips in phone sales. All of it is leaving you backed into a corner where the common perception now is that you've got to sell to survive at all. So what went wrong? How did such a promising launch lead to such a disappointing reality? And how can you wrestle your way back from the brink yet again? Is that even an option?

In 2007 the editors of Engadget penned an impassioned open letter to the company, pleading for many of the changes we eventually saw at Palm. This isn't a follow-up, but it's very much in the spirit. We're going to take a look at the missteps that put the company in its current spot, and talk about what we think can pull it back out. Palm, it's time for a little tough love... again.

The mistake: Launching the Pre and webOS at CES 2009, but not delivering a product until just days before the assumed announcement of a new iPhone.

Palm, you had more heat than a company could reasonably expect after your announcement of the Pre and webOS at CES 2009. Certainly amongst journalists, the feeling was one of utter elation at the products you'd just announced; an innovative, slickly designed OS and phone which looked to be solid competition even to the likes of the iPhone. Post-CES, the buzz surrounding the eventual release of the Pre was high, even though you'd partnered with Sprint (more on that in a moment). Yet when push came to shove, you let the excitement drag on for far too long, and what started as a high pitch siren started to wind down to sub bass drone. It didn't help that once your launch date was finally announced (nearly six months after CES), it came just days before Apple was set to announce a new handset. In the end, you still had some heat, but the cooling off period had already begun.

The fix: You can't rewrite history, but take this as a lesson -- no one wants to eat melted ice cream, especially when they know they're about to get a brand new banana split in a few minutes.

The mistake: Partnering exclusively with Sprint on the Pre launch.

Sure, you didn't have a great bargaining position before the Pre was shown off, but choosing to enter into an exclusive agreement with the third-place, ailing carrier with no clear picture of when you'd move to other partners was about the worst thing you could have done. We're not saying Sprint is necessarily a bad carrier -- in fact, when testing the Pre for our review, we thought the combo was excellent. Still, pairing one down-on-its-luck company with another doesn't often make for fireworks. You should have begged, borrowed, and stole to launch this thing on Verizon or AT&T. At the end of the day, it comes down to audience. In some ways, it might have been better to launch with T-Mobile, which would have allowed you to at least quickly ramp up your GSM sales overseas. As it stands now, you've only got a scant amount of partners in Europe (ignoring a potentially huge market), and you've been slow to bring on new carriers (hello, SFR).

The fix: Again, this one is a done deal, but spreading the love to every carrier you can get your hands on should be (and clearly is) a primary goal right now. The more eyes on these devices, the better chance you have of staying in the game.

The mistake: No SDK -- and more importantly no PDK -- out of the gate.

You really needed to win developers over to your platform quickly, but it was difficult to do that when you launched the SDK with only a limited pool of partners, then expanded that slightly as the months wore on. Additionally, you should have given devs access to the Pre's full capabilities with something like your PDK right out of the gate. While you were espousing the joys of web standards (a great idea without question, but not enough to make your phone feel competitive), users were getting stripped experiences and sluggish interactions with software on your devices. It's good for some things, but not for everything -- this is evidenced by some of the embarrassingly bad attempts at gaming we saw before the PDK was available.

The fix: You've done it -- you've got the PDK into wide release, and you've got devs showing off what these phones are capable of. Based on what we've heard from developers, webOS is actually the easiest and most pleasant mobile OS to develop for -- and you need to start evangelizing that message! The other thing you have to do is make these devices attractive to devs and users because of potential you show through apps, which brings us to...

The mistake: Awful marketing at launch. Sustained awful marketing.

Palm, have you ever watched one of your ads? They are unspeakably bad. In particular, your launch spots featuring what seemed like an extra from the The Cell (and hell, directed by Tarsem, who made 'The Cell') not only failed to show what your beautiful and sophisticated phones were capable of, but alienated viewers almost universally. The fact that these ads weren't pulled off the air immediately was troubling, but more disturbing was the fact that they seemed to confirm that you didn't understand how to market your product, or what your demographic was. Adding insult to injury, you mostly allowed Sprint to steer the ship with showing off your product, which was fine, but it wasn't like the Pre was being perfectly framed by their ads either.

We expected round two would be much better, considering the variety of very vocal objections to your first set, and especially considering that you had a new, wealthier partner: Verizon. Somehow, these ads turned out worse than the first round, not only once again failing to show off your phones (now with other amazing capabilities like 3D gaming), but genderizing the Pre and Pixi in offensive, pointless, and downright stupid spots that insulted those you hoped to be selling to, and simply turned off everyone else. In fact, throughout your career in selling these phones, the only ad which effectively did anything to show how powerful webOS was was the underused Pixi ad we covered in November.

The fix: This is so simple it's stupid. Show your phone doing what it does best -- show it running 3D games, Facebook, and Twitter apps. Show how it notifies users without pop-ups, show how you can switch between all those apps quickly, show how fast web browsing is and how nice pages look (and show pinch-to-zoom!). Show your App Catalog and all the software that's available, show off how your gestures work, show off how easy it is to search for things... but most importantly, don't be afraid to compare it to the competition. You're beating Android's pants off with your game offerings -- and hey, guess what most people are buying in Apple's App Store? You're the only other phonemaker playing in their space, and you've done nothing to sell it. Your newest ad is a step in the right direction, but only about a quarter step. You're still making things gender specific, and you're still not really showing how the phone works. If you do anything with whatever money you have left, you should pour it into an advertising onslaught that simply doesn't pull punches. You have a good product, it's just that no one knows about it or thinks it's for them.

And we can't stress this bit enough: stop acting like your phone is just for girls. Seriously, it's like you've taken Roger McNamee's stupid comments from the All Things D conference about the Pre having a mirror on the back and used that as the basis for your marketing campaign. We're not sure what bunk piece of demographic research you're utilizing to make these decisions, but we're pretty sure reality doesn't bear that research out. You're simply making a huge mistake by trying to "sell" these phones to women -- again, you insult your target demo, and you turn off other potential buyers big time.

The mistake: The iTunes sideshow.

We may never fully understand this one. It seemed like a cool idea at the time, to be sure, but you'd think someone at Palm would have known better than to get into such a silly battle with Apple when your position wasn't so hot. For some reason, you guys thought it was important to offer native iTunes syncing -- important enough to invest time, energy, and resources into -- but we couldn't say why at the end of the day. We're not going to spend much time on this one, because we've already let you know what we think the reasonable, rational thing to do would be... but it bares repeating.

The fix: Another no-brainer. You should have partnered with DoubleTwist out of the gate, or just written your own desktop app that would allow syncing for your devices. Honestly, people don't care that much as long as you give them a sensible, simple way to get music and media onto the phone. You never had to waste a single second on this -- in fact, you could have come out looking like heroes by teaming up with another open source, underground champion like DVD Jon. Instead, you had a protracted battle with Apple which you essentially lost, and now you're telling users not to upgrade their copies of iTunes. Frankly, it looks silly.

The mistake: The Pixi.

We get what you were thinking here: give consumers an updated version of the Centro (your last successful device), a cheap, entry level smartphone to get them into your ecosystem. You figured people at shops would say, "Hey, instead of buying this $99 featurephone, I can get this totally grown up smartphone!" And that is a good strategy... for a world where there's no $99 iPhone or Droid Eris. Unfortunately, we don't live in that world (or, we live in that world, but it's two years later). Your Centro strategy doesn't work anymore, because now the most exciting and feature-packed smartphone (in the eyes of many consumers) can be had for the same price. What's worse, you designed the Pixi (admittedly a nice handset) with slower, less capable hardware than the Pre, meaning that even if you like the form factor, you're still cheated out of the best software (at least for now, Palm says that will change soon) -- and it means you have to devote more resources to OS development because you've got parallel paths. Not a great situation for a company that's already hamstrung by a small staff.

The fix: Kill the Pixi. Seriously -- kill it, or give it the same specs as the Pre. You're going to alienate some users, but it's worth it in the long run, because whatever resources you're pumping into this device are ultimately going to be wasted. There's no way you can sustain this kind of fragmentation at your size (even Google can't do that... and they're Google), and once your next gen device rolls around (if it ever does), something tells us the gap between products will grow even wider.

The mistake: Hardware issues which plagued the Pre, with no outward acknowledgment or rush to correct.

Let's just be honest, guys -- you've had some manufacturing and design issues with the Pre. We've seen countless reports, read too many blog posts to recall, and heard all sorts of horror stories about broken sliders, power buttons that stop functioning, the "Oreo cookie" effect, and more. Hell, even our first review unit broke!

Let me switch to first person here and tell you a story. When the Pre came out, I emphatically recommended the phone to a good friend of mine who was a Sprint subscriber -- I sold it to him so well I should have gotten a commission. I was truly excited about webOS and all its possibilities (I still am to a large extent). My friend went ahead and bought the phone, only to be wracked with build quality and battery life issues. He regularly complained that his slider mechanism had begun to slip, his power button required a "special" hard push to function, his MicroUSB door snapped off (big surprise)... and that was to say nothing of his battery life problems. In addition, the software issues which started around the first or second update (the sluggish behavior and random "too many cards" messages) drove him to not just be unhappy with the phone -- but to really hate it. By allowing these hardware and software issues to go unchecked or unacknowledged, Palm isn't just creating issues for its customers... it's making enemies.

The fix: Make better hardware, and own up to issues as soon as you see them. Maybe this is easier said than done, but if you want to continue to be transparent and available to your customers, then you have to be able to speak up when something goes wrong. Of course, instead of just issuing an "improved" version of the Pre when it came time to release on Verizon you could have just...

The mistake: The Pre is looking pretty dated. You need new hardware.

Look, we get it. We know your party line: the Pre has been out for less than a year. Ah, but remember, you showed us the Pre back in January of 2009 -- which means it's been in front of us for nearly a year and a half. In that time we've seen a new iPhone, the Droid, the Nexus One (and Desire), the HD2 and TG01, Sony Ericsson's X10, and plenty more. Now, sure, you share similar screen and CPU specs with the iPhone 3GS, but you've still got worse build quality and a smaller display -- and people notice. The trend of WVGA displays and faster, more efficient CPUs (hello, Snapdragon) is clear, and you can't afford to sit on the sidelines with a device which is over a year old by many people's standards. We know that you still have a few partnerships to sort out, but if you keep bringing these same devices to more carriers (or don't give us an indication that something new is on the horizon), you're practically hammering nails in your own coffin. You need to innovate on every side now.

The fix: Release a piece of hardware that bests what is currently out there, and put it in an extremely hot looking package... that's also built like a tank. We think you've done a beautiful job on industrial design, now take what you've been working with, apply it to something with the build quality of the Droid, maybe toss in a landscape keyboard, high res camera, and a nice, large screen -- we promise people will take notice. Oh, and don't release it on Sprint... even if it's got WiMAX. And for heaven's sake: advertise the hell out of it. For everyone.

Now we'll be the first to admit -- we have no idea if what we think actually makes any sense for Palm. We're not marketing experts or a design committee -- we're just a group of gadget enthusiasts that want to see companies making smart, innovative products succeed. Palm, you've done some amazing work in the past year or so, and we really do applaud the effort and artistry you've brought to the smartphone world, but you're not taking this thing into the endzone... you're not even half way there. You've got to compete harder, and you've got to start to focusing on what works and start killing what doesn't. You've got a lot of the latter and not enough of the former -- and it's time to flip that equation.

On a personal note, Palm, if you're looking for a Robin to Jon's Batman: you know how to get a hold of me.

[datamvno Posted Mar 23rd 2010 5:17PM]

The mistakes are in the past. Going forward, Palm needs a strategy it can implement quickly that won't require lots of time or capital (i.e., no bottom-up hardware redesigns, however sorely needed). In little time & with little capital, Palm could change its revenue stream by:

1. Making "voice" an app. Forget adding more traditional carrier agreements. Leverage WebOS's superior multi-tasking: make voice an app. Let users run a VoIP client in the background. Do whatever it takes to get Google to write a native Google Voice client, ideally one which integrates w/ the dialer; beg Skype to create an app like it just released for Android/Blackberry. With voice at layer 7, where it belongs, Palm can loose itself of traditional carrier agreements and...

2. Become a global data MVNO. Sell data-only plans directly to consumers, ala iPad. As the data provider for your handset, your advertising dollars benefit not only your handset sales, but also your monthly data plan revenue. Don't bother re-selling voice like traditional MVNOs; Pre/Pixi owners can use Google Voice or Skype or yet-to-be-developed alternatives. Negotiate an agreement w/ AT&T or T-Mobile and sign partners in the major international markets. Be the low-cost provider on international data roaming (being data-only, you won't be cross-subsidizing extravagant international voice and sms connection fees).

3. Focus on global connectivity. Focus on your 3G hardware; don't spend another cent on your CDMA hardware. With a 3G Pre/Pixi, a cheap global data subscription, and voice as an app, Pre/Pixi owners could send/receive calls using one number from anywhere in the world with a UMTS signal.

4. Create an enterprise-class email client. The freedom of international travel will appeal to business travelers, but they'll never adopt WebOS until it provides an enterprise-class email client. It's the second-most important software project behind a workable VoIP app.

With no hardware upgrades, manageable software upgrades, and very little capital to get the domestic & international data MVNO agreements in place, Palm would have a source of monthly revenue on which to survive & would have changed the relationship between handset manufacturers and carriers in a way that Apple and Google have not.

[hischampion Posted Mar 24th 2010 12:50PM]

All the things said in this article were true, as long as you remember the details. It's necessary for Palm to not repeat those mistakes. They are responsible for the Pre not being more profitable than every Android device. Mostly the marketing just shut Palm out of people's minds. After that the poor response to issues and time between launch and announcement are the next most significant issues for Palm's new devices. Please don't let this happen again.

[alainiala Posted Mar 24th 2010 10:33PM]

It truly pains me that WebOS is struggling so mightily, as the last 9 months have been a true joy for me. I can honestly say it's the best smartphone I've ever owned... I personally think what really hurt the Pre was its early problems with the hardware and battery life. The sliding mechanism was terrible in the first few months of the Pre's life, and battery life was pathetic until roughly 1.3.5. I think a lot of people who gave the Pre a shot in those early days were turned off by these issues.

I think its almost a foregone conclusion that Palm is destined to be bought out. It would be a shame, but if it meant the continuation of WebOS, it may not be such a bad thing. I have 2 thoughts on who should be buying out Palm... The more obvious choice is RIM. Blackberry OS is truly getting long in the tooth and would seriously benefit from a innovative new OS. Merging BES connectivity with WebOS and a legit Webkit browser would instantly put RIM back in the race in terms of smartphone innovation.

My 2nd thought is less obvious, but go with me here... CLIE. Come on, Sony! Sony's Android efforts have been pretty lackluster (Xperia, I'm looking at you). We know that Sony's industrial design is infinitely better than their software development, so a beefed up Pre with Sony's manufacturing prowess would be fantastic. We also know that MS is tying Xbox Live into its Windows Phone 7 Series, so it would behoove Sony to do something similar with their mobile devices. We know WebOS is a viable platform for gaming since the release of the PDK, and all their iPhone game ports have thus far proven this.

Playstation Network integration on WebOS would get them up to parity with MS and Xbox Live. Sony would have their own mobile OS to call their own and develop around, and WebOS can live on. Trophies vs Achievements... Maybe even base a future PSP around some stripped down version of WebOS (social network integration, webkit browser, youtube, etc...).

I know its pie-in-the-sky stuff, but heck... better than letting WebOS die an untimely death.

[derekdevine Posted Mar 30th 2010 10:10PM]

Another mistake: Palm announced the dated Palm Pre Plus coming to AT&T with no official street date, while Apple, in a few months, is going to announce a new iPhone, that'll be far beyond the Pre and iPhone 3GS.

Palm makes horrible illogical decisions and I don't understand why. I was looking forward to a Palm device on AT&T, but not a year old phone. The "Plus" or not, the phone is old.

[DennisOS2 Posted Apr 9th 2010 7:58PM]

I'm biased. I started with Palms in 2000 and continue to this day (Pre Plus). That said, I've had other devices (PDAs since the HP LX90/100/200). WebOS is certainly not perfect, but could be the basis of a tremendous PDA/smartphone franchise.

Although most of the Engadget article is spot-on, they admit at the end, some of their solutions/suggestions may be naive or misguided. Ya think???

The marketing/market research was abysmal. However, the Palm OS/HW is wonderful. The iPhone is looking more dated than the Pre, yet Engadget says Palm needs new HW. Huh?? This is where the tech-heads at Engadget have to remove their heads from you-know-where. Stick to elements that will create market share ...... not more unnecessary HW development that is a drain on resources.

Palm does need to partner with some one or license WebOS to gain share that way. The time to go it alone may be past. But suggestions regarding what they need to do needs to be based in reality.

[xsacha Posted May 7th 2010 2:31AM]

This is a spot on article. You guys were spot on in 2007 too. Palm need some sort of advisor.

[Nod Flenders Posted May 8th 2010 3:31PM]

WooHoo last!