Category: Industry

Mobile Computing Industry

Palm: Pacific Crest Downgrades; Merrill Cuts Target To $5; Needham Fears “Oblivion”

Palm: Pacific Crest Downgrades; Merrill Cuts Target To $5; Needham Fears “Oblivion” – Tech Trader Daily – Barrons.com

Palm unveiled the webOS and Pre on Jan. 8th, and the stock skyrocketed from $3.30/share the day before to $7.14/share on Jan. 15th.

January 2009 predictions for Palm by Morgan Keegan:

About Palm at Sprint: Storm/iPhone-type Success At Sprint For the Palm Pre Would Lead to About 630k-1mm/quarter

Our 450k/quarter Estimate For Pre Look Wholly Realistic Based On Success Of Other “Hero” Campaigns

Your correspondent, January 2009:

Now that the land grab is over, expect Bono to get his payoff as Palm gets acquired by a hardware vendor desperate for relevance. As Motorola is on its knees, my bet would be on Samsung, though a bidding war with Sony Ericsson would not be a surprise.

Now I’m not so sure. Faucette of Pacific Crest today:

While we believe that Palm could ultimately be a very attractive acquisition target, we are concerned that if the company is not prudent in maintaining balance-sheet resources, any potential acquirer may be content to just wait until things become even more desperate.


Mobile Platforms: First Market Where Google Beat an Incumbent

No, that incumbent is not Apple.

Google has taken on Microsoft with free good-enough web services for a few years. Gmail for business against Exchange, Chrome against Internet Explorer, and soon Chrome OS against Windows. But it’s Android vs. Windows Mobile which is shaping up to be the first success story for Google.

Windows Mobile has to deal with Android as a classic low-end disruptor. Both are competing for OEM deals and it’s plain to see how Android is a better opportunity:

  • lower cost means lower BOM, and higher margins
  • easier differentiation through customization of the UI. WP7 went so far as to eliminate this option
  • open source beats closed for devices any day
  • a fragmented ecosystem beats a dysfunctional one

WP7 appears to be something so different than what WinMo was that it may indicate Microsoft abandoning the licensing market to Google.


Windows Phone Classic Phones not upgradeable to Windows Phone 7 Series

“Because we have very specific requirements for Windows Phone 7 Series the current phones we have right now will not be upgradable,”

Microsoft cuts off Win Phone 7 upgrades for all WM6 devices | ElectronistaInvites ‹ Asymco — WordPress

Now why would anyone buy a WinMo 6.x (aka Windows Phone Classic) phone today? Is this is a classic example of the Osbourne effect?

Maybe there is more to this story. Buried in the WP7 launch was news that Classic would carry on and a new “starter” edition would also be made available. Said Starter edition would be sold only in emerging countries and target 2G and 2.5G networks.

Furthermore, Ballmer made it clear in a Q&A that they would “continue to invest” in “Classic” WinMo/Windows Phone.

So Microsoft is not quite foolish enough to ignore the consequences of an orphaned platform. The impact of the dual platforms on the ecosystem is another story.


Rubinstein on why Pre is not Selling

Dave Whalen and I just returned from a very successful meeting with Verizon Wireless, where they acknowledged that their execution of our launch was below expectations and recommitted to working with us to improve sales. To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products. Early results from the stores have already shown improvement on product knowledge and sales week over week. You may have also seen a growing number of Palm ads on billboards, bus shelters, buses, and subway stations-all getting the word out about Palm.

How hard can it be to explain multitasking?

link: WSJ Posts Palm CEO’s Letter to Employees


Skype and Adobe Jump off WinMo Ship

Weak spin from both on reasons to leap off a sinking ship.


Skype has just discontinued Windows Mobile version of Skype client:

We’ve chosen to withdraw Skype Lite and Skype for Windows Mobile because we want to offer our new customers an improved mobile experience – much like the version that has proved so popular on the iPhone, and which is now available on Symbian phones.

Meanwhile, Adobe was promising to bring Flash 10.1 to Windows Mobile but now Adobe is leaving Windows Mobile 6.x:

As for WinMo, we have made the tough decision to defer support for that platform until WinMo7. This is due to the fact that WinMo6.5 does not support some of the critical APIs that we need.


Palm's Forecast

full-year revenue would be “well below” its previous target of $1.6 billion to $1.8 billion. Wall Street was expecting $1.6 billion

If we assume $1 billion/yr. revenues, that works out to about 3 million smartphones a year out of a market that Gartner just forecast to be 215 million this year. That gives Palm just 1.4% share of smartphones.

The WebOS is a fine piece of code, but one has to understand that success in this business is not just doing something right. You have to do everything right:

  • Nokia has great distribution and logistics, not so good software or platform story
  • Palm has great software, not so good distribution or platform
  • RIM has great distribution and service, not so great software
  • Android has good software but not great integration of solution
  • Apple’s software and platform are great, but distribution is still weak
  • Microsoft has nothing good at all

The question of acquisition invariably comes up. The obvious answer would be to pair Palm with somebody who needs what they have and who has what they don’t. Unfortunately no perfect fit arises.

UPDATE 3-Palm cuts revenue view on weak phone sales | Reuters


But… it has multitasking!

Palm warns of 30% miss on estimates.

Feb. 25 (Bloomberg) — Palm Inc. said it expects that adjusted revenue for the third quarter of fiscal year 2010 will be in the range of $300 million to $320 million. The average estimate of analyts surveyed by Bloomberg was for adjusted third-quarter revenue of $409.3 million. The company said revenue for the quarter and full year are being affected by “slower than expected consumer adoption of the company’s products.”

link: Palm Sees Third-Quarter Adjusted Revenue $300 Mln to $320 Mln – Bloomberg.com


App Stores Grow Dramatically, Ovi Climbs to Third Place

The last four months have seen tremendous app growth. Apple grew by 59k apps while Android added nearly 10k and Nokia added 5.5k apps to Ovi.

As a percent, Palm grew the fastest with 1,352%, followed by Ovi with 827%. The slowest growing was actually Blackberry App World with a mere 56% growth.

More curious is the popularity of certain categories. Games and Books are dominant in the App Store, while Personalization and Music account for more than half of Ovi (ringtones and wallpapers?)

Finally, in terms of catalog ranking overall, Ovi climbed the league table to third spot behind Apple and Android and overtaking Blackberry App World. Palm overtook Windows Mobile Marketplace which is now dead last with 693 apps.

link: Distimo Mobile World Congress 2010 Presentation – Mobile Application Stores State of Play


HP continues to say that it is serious about smartphones

The consequences of licensing a mobile OS:

Sales of H.P.’s hand-held products, including its iPaq smartphone, dropped to $25 million in the quarter, down from $57 million in the same period last year. Apple, by contrast, had sales of $5.6 billion for iPhones and related products during its most recent quarter.

To put it in more perspective, $25 million at an ASP of $350 a phone means HP sold about 70k phones last quarter, or what Apple sold every 17 hours.

link: Hewlett-Packard, a Technology Powerhouse, Stumbles in Smartphones – NYTimes.com


From Apple Computer Inc to Apple (Mobile) Inc

Tim Cook confirmed at a Goldman Sachs press conference yesterday that Apple is calling themselves a “mobile device company” officially. The “traditional model” of having companies sell different things — hardware, software, peripherals — just doesn’t work on today’s world, according to Cook. So Apple is no longer a computer company, or an OS maker, or a media giant. Its main focus is mobile devices.

link: Tim Cook: Yes, we’re a “mobile device company”