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Is Palm's opportunity with webOS waning?

February 23rd, 2010 at 11:03 AM

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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