Is Palm's opportunity with webOS waning?

By on Feb 23, 2010 at 11:03 AM
Opinions February 23, 2010

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Palm may be facing its most difficult challenge this year as analysts evaluate the early success of webOS and make their predictions about the future of this fledgling platform. One of the first analysts to weigh in decidedly against Palm is Bank of America/Merrill Lynch analyst Vivek Arya who downgraded Palm from buy to underperform and issued a rather stinging assessment in a recent research note:

“Palm’s superior platform features have not translated into sufficient carrier support and consumer demand, and we are concerned the window of opportunity may be closing as Google’s Android ecosystem gains ground, [Research In Motion] revitalizes its portfolio, iPhone increases its presence, and as Microsoft reboots its efforts with Windows Phone 7. With only $130 million of net cash in an opex intensive space, Palm’s options may be limited in our view.”

According to Arya, Palm is slipping in multiple areas with an ad campaign that is too expensive to sustain, a distribution channel with Verizon Wireless in which the webOS devices play second fiddle to the flagship DROID and BlackBerry smartphones, and the addition of AT&T and T-Mobile as carriers in a move that may be too little, too late. The picture he paints is rather bleak and it will be interesting to see if other analysts chime in similarly on Palm. Rather than wait for these over-paid stuffed shirts analysts to pontificate on Palm, we want to know your thoughts on Palm and what you think the remainder of 2010 may hold for the struggling company. Would new hardware get you excited?

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  • schlock

    webos is really the best os out there. however I think palm missed the boat on releasing such a small screen and cheap plastic phones as all their competition were getting set to deliver reall big screens and or really well built metal ones.
    then again intellivision was far superior to atari and that war big time

  • Brad

    At this point, I’m not sure new hardware would even help. New hardware (not the minor updates to the Pre and Pixi) would’ve had to coincide with the Verizon launch—before the Windows Phone 7 announcement. But Palm’s strategy still seems to be to just expand the Pre distribution channel and increase the marketing efforts. The promo spots on this season of “24” have given it some extra attention and cool-factor, but even with new hardware, developer support remains lackluster and I think people are over it. Unless Nokia makes a significant move, it’s a two-horse race between Windows Phone and Android for who’s going to firmly rest in the coveted 3rd spot next to iPhone and Blackberry.

  • http://polywellnuclearfusion.com William W Flint

    I just returned two (2) Palm Pre Pluses and got a Droid. Here’s why:
    1.The Palm Profile Cloud-based back-up software was an unmitigated catastrophe that did not work as advertised. When I went from the first Pre Plus to the second Pre Plus, Palm managed to lose ALL of my memos -there were hundreds- and my entire ToDo list. And Palm support could not fix it.
    2. I was missing more than half of my incoming calls because neither of the Pre Pluses would ring through – even though Verizon’s map says we are in a good coverage area (my wife’s Motorola phone works fine all the time – plus I would have 4 and 5 bars even as my Pre Pluses were NOT ringing for an incoming call – yes, the ringer was on!). And Palm support could not fix it.
    3. When the Pre Pluses DID ring, their ringer volumes and their speaker volumes were not nearly as loud as either my old Palm Treo or my wife’s Motorola. I could not hear my caller’s voices in areas with only minimal background noise (bathroom fan, air-conditioner, car, etc.)
    4. The battery charge –for both Pre Pluses- would last 6-9 hours under my normal use, compared to 24-36 hours for my old Palm Treo.
    5. The first Pre Plus had a flakey keyboard that stuttered horribly on the r’s and e’s – as in rrr and eee instead of r and e. The keyboard on the second Pre Plus was fine.
    I tried the Pre Plus because I have had MANY Palm products over the years. But I now see Palm’s abandonment of the Palm Desktop as an arrogant insult to those of us who have been loyal Palm users since the first Palm Pilots – what in the world were you thinking? I will NEVER go back to Palm!

  • David

    Hey, I was ready to snatch up a Pre as soon as it hit the streets, but they chose to sign a exclusive agreement with Sprint (very spotty national coverage). One year later, the market seems to have passed them by with better devices.

    Notice: If you’re a manufacturer, make sure you release new equipment with carriers that have good coverage.

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