Palm “bets the company” on Pre
You might have read that Palm’s stock soared over 35% this week. What’s the excitement about? It’s about the Pre smartphone, which is one of the most searched terms on Google today (according to Palm).
The Pre is nothing like Palm’s past products. The form factor is new, including a slide out qwerty keyboard and finger swipe area instead of hard buttons. Pre runs a newly developed and proprietary platform webOS, which supports third party software written in HTML, CSS and JAVA Script, commonly known programming languages. Palm believes Pre will attract substantial third party development as a result. Pre boasts true multitasking, multi-touch, autonomous GPS, WiFi, Bluetooth, 8 gigabytes of memory, a fast processor and host of other high end features.
Does this mean that after years of evolutionary device releases, deteriorating balance sheet statistics and declining market capitalization, that Palm is turning things around? Perhaps.
Palm took a “poison pill” in 2007 to reduce the likelihood the company would be acquired. The firm assumed $400 hundred million in new debt and paid out much of the company’s cash as a special dividend to shareholders. At the same time, Palm lost market share to Apple and RIM, and saw it’s sales fall nearly in half. The company began losing the most money per quarter in its history.
Can Palm refinance its loans? Can the company raise additional cash? These are important questions in context of the recent stock market crash and tightening credit environment. Clearly the Pre is tremendously important for returning Palm to profitability and ability to raise money.
We believe Palm’s new shareholder and Chairman are helping turn the company around. Elevation Partners bought 27% of Palm’s outstanding shares, and installed Jon Rubinstein as Chariman of the Board. Rubinstein is well known for leading the original Apple iPod design team, a tremendously popular device. He led design of Palm’s webOS and Pre.
We had a rare opportunity to hold and use a demonstration model of the Pre today. In our opinion it’s better than the iPhone. There are more features, a more compelling interface and we believe there will be substantial third party development.
Palms’ Pre is perhaps not as intuitive to use an iPhone, and the vast number of iPhones in circulation (around 20 million) mean developers will continue to focus heavily on that device. We would point out, however, that the iPhone taught us how quickly a great device like Pre can proliferate.
Apple has an exclusive agreement with AT&T for three more years. Sprint, which has been losing market share to AT&T and is the first carrier in the United States to offer Pre, therefore has a big incentive to push Pre in their stores and marketing.
Check out our 17 minute video recording of Palm demonstrating the product.
Filed under: Editorials, Treo and Palm news
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Palm has disappointed a LOT of GSM users by exclusively offering the Pre to Sprint. My husband and I have been Palm fanatics for over a decade - only purchasing Palm phones. We’ve Palm PDAs, and every Palm Treo phone, starting with the 300. We can’t believe the Pre isn’t offered to GSM users to alleviate the stress of switching carriers AND to prevent LOYAL Palm users from switching to Windows Mobile. Someone should really start some kind of petition or somehow strongly encourage Palm to offer the Pre to GSM users.
I would sign! I have to many friends/family on my current carrier to consider switching, and am in the market for a new smart phone. I love my 680 and the buzz on the Pre is great! So when are they going to release it to the tmobile users?
I want it for AT&T! My husband and I are Verizon customers but considering a swap to AT&T (Everyone in our family has that!) I have had three different Palm PDAs, and I didn’t want one of their phones b/c of the small screen and lack of touch screen! Grrrrr! That looks AWESOME!
Sprint is lucky to get the pre first. as far as I am concerned sprint was dying as well, this may be their chance to get them back.
For a die hard Palm fan I was dismayed to see that Palm is no longer in the PDA business (glad I sold my TX last month). However, if I hadn’t of got a smartphone I was going to get a used 755p off of eBay and just use it as a PDA because I figured my TX was superfluous.
Palm is just taking care of business in eliminating older products and concentrating on what is going to sell today and tomorrow: Windows OS for businesses, old Palm OS for cash strapped consumers who see a bargain in the Centro, and Prosumers who will buy the Pre.
Personally I don’t see Palm betting the farm here on the Pre, but millions of shareholders seem pretty excited about Palm! How many companies of late have had their stock go from $2.00 to $6.00 in less than 48 hours?
The Pre looks pretty good. But when I step back and compare it to Google’s G1. I see a few things that are lacking in the Pre. 1. No GSM, the G1 has a quad GSM radio. It can be used anywhere in the world. 2. aGPS is not real GPS . If you can’t get a cell signal it will not work. 3. The lack of a memory slot.(PLEASE SOME EXPLAIN THIS ONE TO ME??? ). With the G1 It can handle 16GB right now, more later with a hack . 4.The the lack of support for older Palm programs.
My Nokia n810 runs Garnet apps with a VM that Access has ported for it. So there is no excuse Palm. The avalibality
I would also signup! I’m very disappointed that they will not have a GSM version available.
Let’s not forget the security ramifications of data storage on the web. If you can’t baclup locally- then you have to b/u to the web. I’m sure Prosumers will not feel very securing their data on the web where hackers dwell.
I really hope the Pre goes to GSM. I have been with AT&T for over 13 years, and there is no way I would ever switch to Sprint. My husband had them and it was the worst service ever. Oh well if they don’t offer it to AT&T then I guess it will be the iPhone. My husband downgraded from the 750 to the 650 because he HATES Windows Mobile software. I could not stand it anymore listening every single day how the phone sucked! So we wait.
verizon needs to step up and ask palm for this phone I want this.
I hope that Verizon will step up and get this phone. I have been wanting to upgrade to iPhone but don’t want to go with AT&T. I am hoping that they will pick up Pre since I don’t want to switch to Blackberry.