Palm Responds to the iPhone

Several people noted a NYT piece about Palm's response to the iPhone. Essentially, their response appears to be to hire a former Apple engineer and a couple other folks -- while also pursuing plans to perhaps sell the company. Nothing like a dual approach to the problem.

Comments

Re:allinone

[bostonkarl]

All in ones exist today. Palm has seen it come and done nothing.

Apple is attempting to make a sexy all in one taht doesn't rely on windoze mobile and market the hell out of it. Palm has done nothing.

Re:allinone

[thammoud]

Someone needs to come up with a serious contender to iTunes. Until that happens, no one will touch Apple in the new 'convergence' world.

Re:allinone

[Anonymous Coward]

Then why aren't people buying my all-in-one microwave/refrigerator/toilet?

Re:allinone

[CastrTroy]

I've been searching for a digital music service, and while i'm only going for ones that offer MP3s, so my choices are limited, I've found that a lot of music services are really bad. They don't have the level of quality that iTunes has, in terms of things actually working the way they are supposed to. They make it a real hassle to just buy/download your music. iTunes makes things really easy. I've ended up going with eMusic, and I find their service very good, but iTunes just seems a little more seamless.

Destiny

[26199]

Somehow I get the impression that the iPhone's future... destiny, if you will... is already determined, and anything Apple's competitors might do at this point is more or less irrelevant. Nothing is going to steal the iPhone's thunder if it turns out there actually is a market for it. And if there isn't... it'll sink without a trace, as will any rivals.

As cool as I think the iPhone is, I'm currently leaning toward the second option. Too expensive, too little demand.

Re:Destiny

[Apple Acolyte]

I don't disagree with much of your post, but when you say you're not interested in the iPhone because it's too costly and has too little demand, I have to ask what you're basing that opinion on. I'm betting demand will healthy - the iPhone will be a major status symbol. And as far as price, people often point out how expensive the iPod was when it debuted. Most claimed it would fail due to price, but few if any are saying that about the iPhone. I bet within a couple of years you'll be counted among iPhone owners.

Re:Destiny

[kisielk]

Hari Seldon, is that you?

Re:Destiny

[Jeff DeMaagd]

A lot of phones had a very pricey debut, the first RAZR was about the same price, now they can be had for $30 with service sign-up. I don't expect that the iPhone will drop that much, but I sure hope it drops to half its current price pretty quickly. I'm tempted to look at the Moto Q to pass the time until the price gets to something that's realistic.

Re:Destiny

[tlhIngan]

You forgot to mention that it's only really in North America does the concept of heavily subsidized "free" phones really exist. Go to Asia and Europe (which have way more phones in all shapes and sizes) and you'll find plenty of high end phones people actually buy. Dropping $1k on a phone isn't too unusual. There are ton of Asia and Europe exclusive phones (if you want Windows Mobile, it's a case of "what features do you want, and what manufacturer?" - more so than just the meagre selection here of Motorola, HPaq, Audiovox and clones). Of course, most are tri or quadband GSM, so you can import them into North America and use them. But of course, you'll be dropping easily $400+.

The quest for "free" and "cheap" phones in North America has meant that high-end phones really don't appear very often.

Apple actually has guts to introduce the iPhone into the US first, where paying more than $100 for a phone is rare. Of course, doing so in Europe, means they'll have to compete against the other half-million phones occupying the same price point.

Re:Destiny

[gig]

> As cool as I think the iPhone is, I'm currently leaning toward the second option. Too expensive, too little demand.

You are out of your mind. Everybody already wants one. The demand is already there. Not from just the geek crowd, either.

People asked for this device. Millions of iPod users have already asked Apple for "an iPod phone" because they like their iPod better than their phone.

When comparing the price to other phones, notice that the iPhone also does not have a hardware subsidy. Instead, the service is going to be discounted. In other words, instead of getting a few hundred dollars off the phone, you will get a few hundred dollars off your service contract. So you have to compare the $499/$599 price to the unlocked price of other smart phones. There are many that are more expensive than iPhone right now, including two WinCE models that are over $700 and do not offer Web browsing or an iPod built in. Also iPhone will save the user money because its Wi-Fi will enable free access to the Web whereas other phones are always on the cell network only.

The iPhone replaces a PC in many ways that other phones don't because there is a real Web browser in there, there is real audio/video playback in there, there is real email, a real OS. Many people are going to look at it as $500 off a notebook computer.

why competition is good

[UnknowingFool]

Whether you like or dislike Apple or their products, Apple is a catalyst for change. Personally I applaud Apple's entry as it may encourage all phone makers to reevaluate their UI. The UI on my phone sucks but they all equally suck.

Re:allinone

[tomstdenis]

The problem with all in ones is they implement each feature shoddly or make ridiculous compromises.

Camera? Sure 0.3MP. Memory? Sure 1MB. etc...

Sure some phones now come with mini-sd slots and what not. But still, if I want a camera my 5MP Canon will do much better. If I want an MP3 player my iPod will do much better. If I want a processor in a box, my laptop will do much better. There is a difference between "doing a lot of things" and "doing a lot of things well."

Combine that with lack of choice [in most markets] and people are easy prey for the doo-dahs and whatnots.

For me, when I bought a phone I looked at some key factors.

1. quadband so I can use it anywhere
2. relatively small
3. decent standby life

Anything else is frivolous and hardly gets used.

Unless you see phones with a 4MP camera, 128MB of ram, 500 MHz ARM, etc... it's hard to say they're really "replacing" anything.

Tom

Agreed

[dreamchaser]

Not only is it too expensive and not all *that* much better than some other smartphones out there, but the decision to lock in to one mobile provider is probably the one thing that will doom it to failure. Looks like a great toy, but far too expensive but as for me personally there is no way I'd switch to Cingular. Bad, bad experiences with them in the past. I doubt many people will rush to change providers just for a high priced toy. There will be a limited market within Cingular's existing customer base, and some Apple fans who will switch just because it's from Apple, and that is it.

Re:Agreed

[juniorbird]

Palm's ability to offer the Treo on multiple carriers is certainly a big advantage, but there is precedent for offering a high-end converged device on just one carrier -- T-Mobile's Sidekick. How did that do? Let's see, it became an iconic product that every famous person had to have. Last year, T-Mobile moved about a million of those. Apple apparently thinks it'll sell 5 million iPhones. Is that possible? That basically depends on a few questions:

• Will, as you ask, people switch to Cingular? Well, with number portability one issue goes away. Another potential issue is that Sprint is a much bigger business carrier than is Cingular -- some business users will only have Sprint phones as an option. But we do see that most carriers have about 2% churn annually, and Cingular did gain 2.4mm new subscribers in just 4Q '06, so there's precedent for an inflow of customers
• Is the price too high? I think it seems high, but the bigger iPods sell reasonably well too, and they're pretty pricey. There are also a lot of smartphones in the $399-$699 range without rebate, and most of these started out with pretty small rebates and long contracts. The iPhone is selling through the same, proven channel with the same, proven incentives.
• Is the iPhone a toy? This is related to the question "will not being available on Sprint and Verizon doom the product with businesspeople?" All of the things the iPhone does are things that people pay RIM and Palm big money to do right now. If the iPhone can do them better -- and assuming they need to be done better -- then it's not a toy, it's a productivity tool, and how many executives are going to accept their IT guy's objection that "we don't have an account with Cingular"? Oh, and because it looks sexy, the iPhone is also a toy, and can compete in the toy market with the Sidekick. How big is that market? 1.1 million units last year. The Blackberry Pearl sold a bunch of units at the end of the year too -- maybe 500,000? That's a good sized market, and a very fashion-conscious one, that should be very receptive to the iPhone.
• Is the iPhone really just "about as good as" other smartphones? That's the big question. Apple's history in designing similar devices suggests that the iPhone should be substantially better, but, if it's not, then it's true that success outside a small niche is going to be impossible. Apple's banking a lot on its ability to design a better interface, we'll have to see how the iPhone holds up over time.
• 
  
  
  Add it all up, and I think you get about 3mm shipments in the iPhone's first year on the market -- a lot less than 5, but a start.

no subject

[UnixSphere]

It'll only be destiny if they make it right, nobody but business clients are going to pay 500 dollars for a phone, UNLESS it has mp3 capabilities and big storage like the ipod does, but it's gonna be hard to cram a phone and decent sized hard drive into a small unit, and make all of this a quality product(apple has been falling behind on quality on the ipods). On top of that, only Cingular carries it? They're going up a hill, but I'm not going to damn them before the product even comes out. We will see.

Ex-Apple?

[dr.badass]

Palm seems to be very proud of the fact that they hired an ex-Apple engineer, which seems rather silly considering that Apple has thousands of them. It gets better when you consider that ex-Apple in this case means that he last worked for the company about ten years ago. No story here, unless the subtext is that Palm OS is going to start looking like System 7

Re:allinone

[Paulrothrock]

All in ones are not the future. All in ones are good for a few things. Playing music, showing photos, making phone calls. Would you want to do photo editing or management on an iPhone? Would you want to do video editing or web browsing or email only on an iPhone? Of course not. You want a nice big screen and a real keyboard and mouse to do those things.

What Apple gets, and what I think is the future, is making all of these things work together. The iPhone syncs to your desktop at home. The Apple TV gets its content from your desktop at home. It's not about replacing your computer, it's about extending it.

Re:allinone

[denis-The-menace]

I'd be happy with phone that just has a decent 2MP camera with image stabiliser, an MP3 player with buttons outside the phone and most importantly a USB connection to load/unload pictures and music. As simple as it seems, you can find this yet.
Portable combo gadgets like this will not replace dedicated devices for another 10-15 years. The reason: too much greed in the business. When IP phones start to give Cell phones companies a run for their money, you start seeing decent All-in-one phones.

Heck, All-in-one Printers are just now starting to be on-par with their dedicated brethren.

Re:Good riddance to palm

[ryanov]

If I'm not mistaken, the 700w supports a mini-SD wifi card.

Re:allinone

[tomstdenis]

Good points. Should point out that many phones TODAY are capable of sharing files via bluetooth/usb. It's mostly the telco's that lock the phones down so you have to use airtime to transmit files (or worse, only buy content from their services).

So you'd need to see BOTH the telco's and hardware designers lose their greed.

Tom

Re:allinone

[Erwos]

What Microsoft gets, and what I think is the future, is making all of these things work together. Windows Mobile syncs to your desktop at home. The Xbox 360 gets its content from your desktop at home. It's not about replacing your computer, it's about extending it.

Apple's very late to the game. Their implementation may be better, but they're stealing the paradigms, not innovating them.

One Hand Clapping

[Doc Ruby]

Palm is dead. Over 2 years ago Palm sold its OS to the Japanese "Access" corp that makes so many Japanese phones and their most popular web browser. So Access could finish their long heralded "Cobalt" OS, and switch to a new OS which was Linux, under Cobalt (retained as just GUI and compatibility layer). They were supposed to release Linux (+ Cobalt GUI) phones last Fall, before anyone had heard about the (real) iPhone.

But they didn't. Just as Palm let the Blackberry come from behind and eat the market Palm created, Access has let PalmOS keep it from even reaching the market before Apple is eating it, without even a released product.

It's all too bad. The PalmOS approach, focused simplicity on tasks, designed as a tough peripheral, with the most natural interface, writing on the screen, was the right paradigm. Handled properly, it should have forced all computing, whether workstation, mobile, phone or mediaplayer, to "just work", adopting many of its friendliest innovations. Now that job, as usual, is up to Apple.

How wise is industry wisdom?

[hey!]

From TFA:

The company's own Palm OS software is widely seen within the industry as aging and in need of a fundamental revision.

I went into a big box computer store recently, to buy a cable for a PDA I'm developing for. I was shocked; a few months earlier thre had been about twenty feet of counter space devoted to PDAs. Now there was zero -- just two shelves under the counter, maybe two feet wide, half for Palm, half for HP iPaqs. In its place was now twice the retailspace, devoted to iPod accessories.

While the industry had been busy competing to offer "updated" PDAs, Apple has kicked the entire lot into retail obscurity. They can't even, as entire industry, hold their own against fashion cases for the iPod Nano. Apple is a company that has carved out a niche by not only ignoring, but flagrantly defying industry "wisdom", which comes from a group of people far too focused on what each other is doing.

The problem, I think, is this: when the innovations are pursued on the basis of their low marginal costs, they tend to end up having marginal value too. Palm hit the innovation ball out of the park with their first generation PDAs. They scored a series of base hits with their upgrades through the Tungsten series. Palm has the customers and retail channel (for now); the sentiments quoted above say that they should use them to innovate within the bounds of the PDA or smart phone paradigm. But we have reached the point where the value of the next "PDA innovation" is not enough to get you on base -- not in a game where a base hit consists of a $200 retail purchase by a consumer.

The true destiny of the PDA is not to accrete laptop like capabilities. It is to become a cheap commodity. The world needs a Palm m505 for $19.99; not a Life Drive (just discontinued last month) for $399. That is the true meaning of convergence: PDAs have become marginal appendages to phones; their job is to sell phones.

The idea that PalmOS should become more like PocketPC and accrete new features only makes the situation worse. As the sales of PDAs plummet, both Palm and PocketPC will suffer, but PocketPC is destined to drop even faster.

The problem for a company like Palm is not that money cannot be made with a product whose fundametal retail value is destined to plummet. The problem is that money cannot be made with a conventional tech company culture, which is biased towards on stuffing as much features and functionality into a product as will fit. The best thing would be for Apple to buy a nearly moribund Palm for a song.

Re:How wise is industry wisdom?

[hey!]

Oh believe me, I do understand the engineering aspect -- both hardware, software, and communications. I've been involved in mobile product development for over ten years now, so I understand the business end of things.

Most normal, non early-adopter people don't see converged devices as platforms. The pragmatic adopters see them as phones with better address and to do lists. They see them as one less device to carry. Apple has realized this, which is why their phone is not a PDA in the sense that we have used the term. This is what makes the notion that Palm's problem is that they haven't added enough new features to their platform ridiculous. The PDA features are becomeing less and less important.

This is speaking as somebody whose tried many permutations of phone/pda/smartphone. I've tried smart phones that were simply PDAs with phone capabilities built in. They were fine PDAs, but no person in his right mind would buy one. They weren't the right shape or size to be a decent phone. You need to compromise between being a PDA and a phone, and any time you combine a phone with something else, the phone functions have to be the driving concern.

Speaking as a person who has used many different PDAs and converged devices over the years, the best compromise device I ever used was the Treo 600/650 series. But I found that I never used anything but basic PIM functions on the Treos. There were two reasons for that: first I just didn't find it as convenient as on a straight PDA. But most importantly, I stopped doing things like reading eBooks on the device so that I would not waste precious battery. They offered me a smart phone at work, and I said not to bother. Anytime a phone gets combind with something else, phone wins. It was more important to get a tri-mode phone, for maximal coverage.

So, as an early adopter of converged devices, after using several I decided to go for a plain old phone when the time rolled around. There wasn't any point. I now carry an old PDA I fished out of our junk draw at work, which I used for eBooks and a number of useful utility programs. But I don't keep addresses or to dos on it. Those go on my phone.

No, I don't think that phone is a killer app for PDAs. A PDA is a platform on which you can install and run applications. The most important applications are the built in PIM functions. Those, it turns out, are better on a phone.

Re:How wise is industry wisdom?

[0xdeadbeef]

No wonder you keep insisting on using a marketer's definition for the market segmentation. That "ZOMG the PDA is dying" shtick got old three years ago. The PDA went to Finland, got an operation, and is now the "smartphone". We call it that out of politeness. It's still the same device.

I've developed for practically every major PDA / smartphone that's come out in the last five years. I personally use a Nokia 6600 for no other reason than it's small, slurps my address book from Outlook, and with Opera I can surf the web during the commercials before a movie.

You are forgetting about email. The enterprise lubs them some email. That more than anything drives smartphone sales.

And you're complaining about the shortcomings of individual devices. Do you think Apple isn't addressing battery life? It's a music player!

Convergence isn't happening because people are demanding it. Like you said, most people don't even know what these devices can do (yet). Convergence is happening because the components are getting so good and so cheap the manufactures can only distinguish themselves by how much they cram into their devices. The one good Apple will do for this industry is by refocusing us on the quality of features, not just the quantity.

Re:allinone

[Jonny_eh]

Why can't you just plug your monitor and keyboard into your all-in-one?

Think outside the box! The zeitgeist is shifting to a new paradigm!

Re:allinone

[Paulrothrock]

Apple's very late to the game. Their implementation may be better, but they're stealing the paradigms, not innovating them.

I don't dispute that. However, I'm not sure how well implementations are going to work when you've got, say, a Wii hooked to your TV, a Palm Treo as your phone, and a Windows box as your desktop. We need standardization to make sure that the information is able to be seamlessly integrated, and no company seems to want to open up.

Re:allinone

[644bd346996]

All in ones exist today. Palm has seen it come and done nothing.

Apple is attempting to make a sexy all in one taht doesn't rely on windoze mobile and market the hell out of it. Palm has done nothing. Palm saw it coming, and they created the Treo. Then they sat around rotting, selling off their software business, and experimenting with Windows Mobile. Palm really has been doomed since they screwed up the 68k-ARM transition. (And the other issues of the time, like Xerox)

Palm needs advertising

[James McP]

Palm really kills me. The 650, 680, and 700 are really top end devices that are the equal or better of pretty much any phone on the market. They may not be the thinnest or have the best cameras, but the PalmOS versions have higher res screens with vibrant colors, decent native and 3rd party apps, and useful interfaces.

But you'd never know it if you don't already know what a treo is. I've go a 650 from sprint, my boss has as blackjack. Other than fit in a smaller pocket, the blackjack doesn't do anything the treo can't despite the nearly 2-year difference in release dates. And I'll trade the pocket aspect for the runtime as my Treo can go 2-3 days between charges despite frequent web access and heavy usage unlike the Blackjack's ~1 day heavy usage.

Have you ever seen a treo commercial? I haven't but I'll see fifty bajillion "Helo Moto/Razr/Red" commercials this week. C'mon, run something on CNN during the financial hour, for cris'sakes.

People crank about the lack of updates to the PalmOS. When was the last time you actually updated your Symbian phone? Heck, what percentage of users know what os their phone uses? PalmOS is not the easiest to code for? Fine. How does it compare to symbian? Or the motorola in-house OS? Oh wait, there's not many apps for Symbian because of network carriers locking phones and motorola will tell you to sod off if you don't want to jump through their hoops. Obviously it isn't impossible to code for given the sheer number of programs out there and the big draw items are as pretty as anything on Windows Mobile. (Documents to Go, for instance, is both pretty and a solid mobile Office app)

Re:iPhone as a phone

[Anonymous Coward]

Steve Ballmer had it exactly right: Apple's share of the phone market is currently zero and will remain that way for at least another three months.

Steve Ballmer is full of shit as usual. Qwest has been hounding me on a weekly basis to renew my contract with them, but I've got news for them: they're wasting their stamps. I'm not signing a contract with any carrier until I see the iPhone and have a chance to try it. I need a new phone, and unless the iPhone sucks, it will be my next one.

That means that Apple/Cingular have stolen market share from Qwest without shipping a single phone.

Re:allinone

[ThatsNotFunny]

does it warm my buns and keep my can cold?

Re:allinone

[nuzak]

> The Newton syncs to your desktop at home. The Pippin can play content from your Mac at home.

The "Most Inappropriate Use of the Present Tense" award goes to ...

Re:allinone

[kad77]

That is an "interesting" comment these days? WTF?

Re:mugging for a cellphone

[Tony Hoyle]

how many people get mugged for a cellphone?

Thousands (possibly tens of thousands), every year. The market for 'second hand' phones is huge.