A Prescription for Palm to Avert Certain Death

You had a Palm Pilot, didn’t you? I did. In fact, I had a few and I loved them. My thin, sleek (for 1999) Palm Vx was my favorite. The thing looked good, helped me keep track of where I needed to be and when and was plenty reliable. I even had an OmniSky modem for it with which I could pretend to surf the web in 160×160 pixel black and white. Ah, those were the days.

Palm OS, back then, was a pretty decent operating system. In fact, up until Palm sold it, Palm OS was a pretty strong operating system. It was the lynchpin, to my mind, of Palm’s empire. Yes, it needed updating to be a competitive phone OS, but still it was familiar to millions of users and had lots of promise. Unfortunately for Palm, waited too long to update it, needed money and, mistakenly believing Palm hardware held the keys to their fortune, sold their prized possession to another company.

Why am I telling this story? Because it killed Palm. Selling the OS killed Palm. Yes, they’re still walking around talking about going it alone after HTC, today, opted not to buy them. Yes, they have a critically ballyhooed operating system, WebOS, which is loved by many consumers. It doesn’t matter, though. They’re on life support. It’s undeniable. So, what to do… To my mind, there’s only one thing left . It’s all or nothing time.

Palm CEO Jon Rubinstein needs to go out and pick up a copy of W. Chan Kim’s and Renée Mauborgne’s Blue Ocean Strategy and then go for broke. They need an idea on which they can bet every dime and either they win big or lose it all. At this point, they’re headed for losing it all so, in actuality, risk is low.

I’ve read Blue Ocean Strategy (at least I think I have – I remember talk of Yellow Tail wine but I may have been drinking Yellow Tail wine so who knows *kidding*) so I’m going to out on a limb and offer my own thoughts – advocating an idea whose time has come.

Palm FTW means:

• Foregoing exclusive carrier partnerships – Partnering with retailers like Walmart, Target and maybe even your local supermarket in an effort to become ubiquitous.
• Ceding margins – By my estimation most smartphones have greater than 100% margins based on retail price vs estimated manufacturing costs. Palm may want the profit provided by margins but they need the cash flow generated by revenue. In English, this means affordable unsubsidized prices.
• Source apps that matter – The iPhone not withstanding, most people don’t need tons of apps on their phones – which is among the reasons the iPhone doesn’t have pole position in sales. What people do want is a phone that does what others are able to do. So, find out what the most used apps and features are on other platforms and integrate those into Web OS. Don’t wait for developers to come to you. Go to them and have things built.
• Change audience – All of the above means Palm ends up going for a different audience. For one thing, they’re likely to be less wealthy. To me, that’s a good thing. That means Palm is better positioned to sell their devices to more people both here in the US and abroad – leading, potentially, to even more revenue.

There are few guarantees in life but for Palm, what they’re doing now is surely guaranteed to fail and lead to a slow, painful demise. It’s time for a change and I think the crazy ideas I offered above just may be what the doctor ordered.