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.

Everyone, it seems, is creating the next iPhone. Google’s G1 is the most recent device to throw its hat into the ring, but they’re not at all alone. Blackberry is on its way with the (initially) Verizon Wireless marketed “Storm”, also called the Thunder. Nokia will soon be launching the Nokia 5800 Tube, the first phone that implements its S60 Touch UI. And, let’s not forget the Samsung Instinct, which actually sold well, and their beautiful but not yet available in the States, Samsung Innov8. Each of these phones are being released to provide competition to the iPhone – in some ways, to be the next, but better, iPhone. I’m sick of it.

The iPhone is a great phone. I do not have one, but often wish I did. My Nokia N95 is very nice, but there’s something excellent about a touch screen. I like the idea of being able to browse the web almost as I would on my desktop or notebook. I think the UI is amazing – especially for a company taking a first shot (technically, 2nd if you include the Newton) at a mobile OS. It’s size is almost perfect and now that it has 3G, it really is a killer phone. The thing is, for what they did, they nailed it. They got it right. They left little room for error and the marketplace acknowledges that with its demand. Given that, why is everyone stuck on creating the next iPhone? Apple created the next iPhone with the 3G iPhone.

The phone manufacturers should be looking at creating some above and beyond the iPhone. RIM should be looking at creating the next Blackberry, Nokia, the next Nokia and Samsung, the next Samsung. What does that mean? These companies need to focus on their strengths. RIM should be looking to revolutionize what business users can do on their touch-screen Crackberries. People should feel almost as if they don’t even need their laptop because they can do 75% of what they need to do on the Blackberry. Nokia, on the other hand, should focus on reliability, functionality and its ability to stay slightly ahead of the curve. Nokia doesn’t create the greatest looking phones. They create the most reliable phones and, with its S60 platform, highly functional phones with lots of capabilities. Honestly, I don’t know what the hell Samsung does well, but people are beginning to like their phones judging by the reaction to the Sprint Instinct and the Innov8.

To my mind, each of these companies will only succeed if they stick to their core strengths and stop worrying about the iPhone so much. If Blackberry users wanted an iPhone, they’d buy one (and may have already), but they’d likely still keep their Blackberry. If, as an N95 owner, I wanted an iPhone, I’d go out and get one, but I trust Nokia’s reliability and like the options I have with the N95. When competing with the iPhone, other manufacturers will only be also-rans and the more time they spend competing solely against the iPhone, the more time they will spend as also-rans. It’s a sad truth. However, if they focus on their core strategies, do what they do well and bring devices to market that exceed expectations, they easily stand more than a fighting chance of giving the iPhone true competition.

I gave up my Palm device years ago. They got boring. Handspring began to slay them with the Treo, so they bought that company and saved themselves. Then, they sold their operating system so that they would no longer be able to update their dated platform. Smartly, they licensed it back — but made only minor tweaks to it. More recently, Palm has been able to hang on by the hairs of their chinny-chin-chins thanks to the success of updated Treos and the switch to the more modern (but tsill crappy) Windows Mobile platform.

Palm’s life depends on their new Linux based operating system — which no one knows by name or has ever seen. They announced the OS in April, 2007, but had been working on it for a few years prior. Since the announcement, the mobile landscape has changed dramatically (e.g. Apple’s iPhone, HTC on the Windows side and Google Android phones now appearing) and one can’t help but think that the oft-delayed OS may never see the light of day.

Call me an idiot, but if I were Palm, I’d ix-nay (I’m fluent in pig latin) all the secrecy around the new OS and would begin trying to get people excited about the platform. Start leaking something and create some buzz. Unless phones based on the new platform can be controlled telepathically, chances are we’ve seen it all before. If I were them, I’d start a PR assault that made it seem like my life depended on the success of it. In Palm’s case, it probably does.