The Pre, Palm's savior or just another smartphone?
Palm has been busy and the Pre is coming. A lot of people are quite excited about this phone and again are saying 'iphone killer'. I lost a lot of my excitement for Palm from their continued push to Window Mobile and away from palmOS, however this phone is back to a Palm OS and this could be a change in the right direction.
I have outlined the challenges that this phone is going to face, and then listed secret weapons that could really change the game :
1. Timing: This phone really needed to be out for the iPhone 3G launch, that timing would have been impeccable. Apple currently is on top of their game and not showing signs of weakness, is this really the right time for a weakened Palm to make their big move? Exactly like the xBox 360 proved, time to market may be the largest factor for modern electronics, if the PS3 was around during the launch of the 360 we would be in the midst of a much different console ecosystem, this ecosystem might not even include the 360 if timing was changed.
Timing also becomes a double whammy when we look at how long this stuff takes to catch on. The iPhone and App store just didn't happen overnight. The iPhone had the luxury of being a true game changer, while everyone else was playing catch-up Apple was building the phenomena that we have today. Palm delivering on all that is promised is going to be quite a challenge, daunting in fact.
2. Momentum, 13 million iPhones and growing: Even Apple haters have to admit that the iPhone is here and not going anywhere soon The app store is quite a large beast to take on and has momentum within the developer community. It would be hard to find a entertainment or game company that isn't thinking about or currently in development of a product for this platform. While this momentum continues to build, Palm is going to have to put a lot of effort in to generate momentum for a entire new platform and a entire new development community and tools.
3. iTunes: iTunes clocked 5 billion song downloads over 7 months ago (June 2008), that is 5 billion songs that people are not going to want to convert over to the next thing. Are people going to get excited about having some mechanism to convert their precious music libraries for a new phone? Amazon is arguable gaining momentum however iTunes is currently king, and quite a few people use and like iTunes.
4. Hype and wait: Apple's release of the iPhone was very crafty, the phone was available and ready for purchase as it was announced. The iPhone was a got to have it now item and people got to have it, and boy did they get it. The Pre currently is a hype and wait marketing model, Palm is not holding much back, their are hundreds of reviews and sites and the phone is not even available yet. This takes a bit away from spontaneous purchases and makes people stop, think and analyze. Some of these people might just not make that purchase when they have time to over think it, some of them might not want to wait and just get a iPhone.
2. The present state of the union: It fascinates me that Palm is pushing a luxury based high-end smart phone in to a depressed market place. People are hunkering down across the board and probably a bit less excited about dropping a chunk of money on the latest new smartphone. Even worse, possible current iPhone users that might have converted during better times, might now reconsider converting and just keep their present iPhone. It might not be the best time to bet-the-farm with a gigantic product launch?
2. Me-Too Factor: The iPhone clones have helped to prove that 'me-too phones' don't always do as well as expected. Some would argue that a lot of the functionality and features of the Pre are a bit more than 'inspired-by' the iPhone and more along the lines of reverse-engineered from the iPhone. This form of flattery might turn off some buyers, it might not?
3. The right customers: A large portion of Apple customers are from a subset of people that any company would love to have as theirs. They represent people that often have disposable income and extreme loyalty. Plenty of these customers have already made the choice and are with AT&T, iPhone in tow.
Exceptions aside, every person that I know with a iPhone is the type of customers that I would want. They are generally not cheap and spend accordingly.
Sure, it is a big world and there are plenty of these premium customers left, but a large chunk of these people are spoken for.
4. The wrong customers: On the flip side, the average Sprint customer might be a bit on the frugal side. Arguably Sprint is considered the budget minded cellular provider. Their call plans are hands-down the cheapest and the customer service ratings reflect that. Are Sprint customers going to be the best early adopters and rushing out to buy a premium smartphone?
5. The fashion statement: The Pre is just not stacked up to become a fashion statement. The design is solid but it fails to excite or make a identity statement. The iPhone was able to really change the game in this department and continues to be considered a personal statement as much as a smartphone. I just don't see the current Pre producing this level of sex appeal.
6. $300 for copy and paste: We all know the media-hyped short-comings of the iPhone, competitive predecessors have addressed them with mixed results. Are people going to run out and get a new smartphone so they can have a removable battery, video recording and copy and paste?
6. Google couldn't do it: The google phone had arguably more hype then even the Pre is currently commanding and failed to deliver to that hype. If a monster like google couldn't dethrone, can we expect a cash-strapped Palm to perform any better?
7. The iTouch Factor: A dirty little secret might be the number of iTouch units that are out there. I know quite a few people that have forgone the AT&T switch and have gotten a iTouch instead. They use their iTouch units quite extensively in wifi zones and their phones as just phones. These people are adverse to the cellular contracts and have found wifi nirvana with the iTouch.
7. Palm's desperation: Recent press might lead one to believe that Palm is a bit desperate and this is a critical product launch for the future of the company. This might be caution the marketplace and make them wonder if Palm has the horsepower to push this all the way through. Does Palm have the cash to go big enough on this one?
8. litigation: The Apple patents are not going away, and Apple has stated that they will defend their intellectual property fiercely. I think the pre is going to be a major target for this litigation. Could this delay the launch, could this cost Palm a large chunk of money to defend? These factors could damage this product launch.
9. The Missing Sync: The weak link for recent PalmOS phones has been the syncing software, in fact a large portion of Palm TREO users have relied on third party tools like 'The Missing Sync' to have a more complete sync solution. The Palm desktop software has fallen short for some, will they get the sync software right this time? Will they execute a Cloud computing system like Apple's mobileMe?
Factors that could change the game for the Palm Pre:
1. Asia: The Pre could catch on in Asian countries and really gain momentum there, Apple has struggled in these markets.
2. Microsoft Money: Microsoft could be doing some amazing secret integration with the new Palm OS, or could write a blank check to help. Exclusive Windows 7 integration, maybe?
3. Bad publicity from litigation: If Apple does sue the pants off of Palm, this could generate some bad press and martyrize this product. The Pre could become the underdog product that is 'sticking it to the man.'
4. Netflix: Some secret Netflix deal, free movie rentals on the Pre for Netflix members?
5. Free Tethering: Sprint kicks in free tethering for laptops for Pre phones with unlimited data plans. AT&T is currently charging iPhone customers for this service.
6. The pirate phone: Palm and Sprint are not heavily vested in the entertainment industry, does pirating really affect them? Could the Pre be the best phone to bit-torrent, play and share copyrighted material? That would be a plus for much more people then we would like to admit.
7. It runs windows: Steve Jobs made a phone with one button, maybe Palm could make a phone that runs Windows applications. Imagine a phone that runs the same applications that your laptop does, it could happen.
8. $99 or even better , free: If Sprint and Palm somehow are able to sell this phone for $99 or even less that would be momental for increased success.
9. 3 year contract, or no contract: If $99 or less is just not possible with a two year contract, how about a 3 year contract? How about no contract?
10. 'One more thing': Are we going to see something that we cannot even imagine, some feature that is a game-changer? Does Palm have something up their sleeve?