The smartphone maker placed all its hopes on webOS, but no one cares about operating systems anymore, at least not directly -- we buy user interfaces and apps.
My initial analysis of Palm’s Pre handset at announcement in January of last year was that, yes, it’s cool, but (a) why announce it so far in advance of availability (almost never a good idea with technology products), and (b) there’s no clear sustainable competitive advantage.
Indeed, it seemed that Palm was committing the ultimate cardinal sin of pushing technological innovation for its own sake, without having all of the pieces in place, and riding on the coolness coattails of the iPhone. Speaking of, and to be fair, the iPhone itself has gone through three iterations so far, with another likely this year, and it too was missing the giant app library and key enterprise features at announcement. Many consequently, I think, ignored Palm’s fundamental disadvantages, not realizing that times had changed.
I write this column as a fan of Palm. I’ve owned many Palm products over the years, including a couple of Pilots and a Treo 650. I worked with Palm founder Jeff Hawkins at GRiD Systems in the early ‘80s, and I thought the initial model that he showed me at Palm’s first announcement was innovative, groundbreaking, just plain cool, and a perfect fit for the emerging market demand for an organizer that really worked. Palm also produced one of the first integrated PDA phones, and, again, there was that Treo 650, a truly great product perfect for its time.
But that was then, as they say, and this is now. I’m not a financial analyst, but I was amazed at the runup in Palm’s stock from a low of $1.42 on 9 December 2008 to a peak of $17.46 on September 30th, 2009. This made no sense. Again, where was the sustainable competitive advantage? In cost? In distribution? In apps? In what?
Alas, there really wasn’t much there. As I write this, Palm’s stock is in the middle of a precipitous dive based on dismal financial performance, mostly the result of poor sales of its new handsets. They’ve got a ton of unsold inventory that needs to be blown out. Some financial analysts are predicting that Palm will fail entirely.
That’s not going to happen. But Palm did place all of its hopes on yet another proprietary mobile operating system, webOS, and that was the company's undoing. No one cares about operating systems anymore, at least not directly -- rather, we buy user interfaces and apps.
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