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Palm is Back
By Avi Greengart, Current Analysis Research Director, Mobile Devices
Jan 12, 2009
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Issue
Palm is one of the pioneers in mobile devices, first by nearly inventing the PDA category with the PalmPilot, and later introducing one of the industry’s first successful smartphones, the Treo 600. However, thanks to several disastrous decisions (including splitting the company’s software and hardware divisions, only to buy back rights to the OS years later) and OS development efforts that went nowhere (more than once), Palm entered 2009 in terrible shape. Palm OS 5 is ancient and can’t handle the multitasking or graphic needs of modern smartphone users. RIM’s BlackBerry line offers a better mobile email experience, while Apple’s iPhone beats Palm for mobile entertainment. The introduction of the smaller Palm Centro helped the company broaden its user base to consumers at the expense of margins, but Centro sales have slowed as competitors have lowered prices on their entry level smartphones. Palm also has a line of Windows Mobile Treos that was introduced two years ago at CES; these are not well differentiated from the competition. To add insult to injury, Palm wasted development resources on an ill-fated smartphone companion product, which was killed before it reached the market.
With sales slowing and losses mounting, Palm has bet the company on a new OS, which it can tightly tie to hardware in the hopes of providing a differentiated user experience. To complement this Apple-like approach, Palm hired several ex-Apple product managers and maintained extreme secrecy prior to a CES 2009 launch of both the OS – called webOS - and the first device to be based on it – the pre. Just ahead of the launch, I was given an hour with Palm’s product managers and a pre-release version of the pre. This report contains my first impressions from that session and Palm’s press conference.
Current Perspective
With WebOS and the pre, Palm is back. It may not be back for long if Palm makes even the slightest misstep (see Challenges below), but Apple had set a fairly high bar which Palm needed to clear to be a contender, and Palm has done about as good a job as it possibly could have. The pre combines solid hardware with superb software and the hopes of a new development platform. The pre will be available in H1 2009, hopefully by early May, as waiting longer would risk getting overshadowed by the third-generation iPhone, which is expected in June.
Sprint will have at least a 90 day exclusive on the pre, though if history is any guide, it will take longer for other carriers to get the pre certified on their networks, extending the exclusivity period somewhat. No pricing was announced, and Ed Colligan was quoted in an interview saying that the pre could be more expensive than the iPhone 3G ($199 with contract) because he believes it is a superior product. Palm may not be pricing the pre at a discount for its customers, but Sprint certainly will – if the pre is to be successful it cannot cost the consumer more than $199. Sprint has already shown it understands market pricing dynamics with the Samsung Instinct, which was priced to sell at $129 (and has now dropped to $99) despite Sprint ads indicating that the “Instinct defeats the iPhone.”
Software
Palm’s brand is synonymous with managing personal digital information, and the pre manages to differentiate itself by taking the PDA to the next level. Consumers today live both on their PCs and inside various Web sites. Google’s Android is tightly tied to Google’s suite of online applications, while Windows Mobile and the iPhone are mostly PC-centric. The pre is agnostic, aggregating multiple types of information (email, contacts, calendar, IM) from multiple sources (Gmail, Facebook, Microsoft Exchange, etc.) across multiple contexts. For example, conversations can be switched between SMS and IM in mid-stream. People appear in the contacts list just once, but the pre pulls down email addresses and photos from all the different social networks where that information resides and stores it in the contact record on the phone. It isn’t perfect, for example, the pre doesn’t pull in Facebook wall updates, Tweets or automatically update contacts with that person’s latest blog posting. Still, the pre takes Palm’s heritage in mobile PIM and extends it far beyond anything else on the market. It is also worth noting that the pre will launch with Exchange ActiveSync support, something Android still lacks.
Apple has clearly set the bar for touchscreen user interfaces, and while Palm doesn’t need to build an iPhone-killer (there is enough room in the market for more than just Apple) Palm does need to be competitive with Apple or it has no chance of standing out in a crowded market. Most of the touchscreen competition right now is a mess: RIM and Nokia simply added touch navigation to their existing operating systems, while HTC and Samsung have tried to paper over Windows Mobile’s deficiencies. Only the iPhone and Android have been designed from the ground up for finger navigation, and Android feels unfinished. The pre’s user interface is every bit as cinematic and refined as the iPhone, utilizing many of the same multi-touch gestures (pinch and zoom) and adding others where appropriate (swiping in various places can be used to navigate back, open the menu tray, or dismiss applications). Like on the iPhone, the screen “recoils” at the end of lists to give users a visual cue that the end has been reached. However, where the iPhone is designed for simplicity – everything goes through the Home button and only one application is open at any time – the pre is designed for productivity. Multiple applications can be opened like a deck of cards on the pre. The applications remain live in this view, so a user can switch among them (unlike Sony Ericsson’s panels, which are static and too small to be useful in this manner anyway). Typing without an application open begins a search process that starts local (first with applications, then contacts) and becomes a web search if nothing is found. The pre also supports cut and paste (still missing on the iPhone).
Palm has implemented an application notification area on the bottom of the screen (Android’s roll-down window shade is similar), and any application can use this to alert users to new messages. Notifications can include programming code and multimedia – for example, Palm has utilized it for background music control with album art. Critically, notifications are not modal like on Windows Mobile (where any message interrupts the application running in the foreground), so pre users can finish whatever they’re doing and deal with the notification when they are ready.
A webkit-based browser, MP3 player with rich animations and Amazon’s MP3 store highlight the applications on the pre. Palm will also be supporting several Sprint applications including Telenav (i.e., point to point directions), MobiTV, Sprint Music, Sprint’s NASCAR application and, before the 2009-10 season, NFL Mobile.
I have used many products this far ahead of their initial launch, and the pre appeared farther along at this stage than most (including the iPhone I tested at that device’s launch. For a trip back in time, see Apple iPhone – First Impressions, January 11, 2007). I did not encounter any bugs or half-finished applications in the limited time I had with the device, though there were slight delays in navigating and launching applications that Palm expects to improve in production units. The interface does have a learning curve; there are no onscreen cues guiding users through the gestures. Palm should post UI walkthroughs on YouTube, include an on-device tutorial, and should put gesture diagrams on the sticker that protects the pre’s screen during shipping.
Software Platform
To provide the kind of integration that allows for a differentiated user experience, Palm built its own mobile OS, webOS. The kernel is mobile Linux, but that will not be exposed to developers. Instead, the SDK will be based on Web standards with API hooks for things like the accelerometer and gestures. Palm claims that webOS is incredibly easy to program, which is a claim that every platform vendor makes (with the possible exception of Symbian, which just claims to have the largest installed base, not the most elegant programming environment). By going with Web coding standards, Palm has opened up the pre to a large group of potential programmers, but not its own development community: webOS is not backwards compatible with Palm OS 5 Garnet, so unless someone writes an emulator, the tens of thousands of Palm apps will need to be rewritten from scratch to work on the pre. webOS is also highly abstracted, so things like 3D games won’t be possible (at least not initially).
Palm is planning an app store, though no details were provided. At least initially, the app store is likely to be empty – Palm is holding just a limited beta for the SDK; the public version will be launched around the time the pre reaches the market.
Hardware
The rise of the mobile phone can be divided into three stages, each building on the last: services (consumers weren’t sure that they needed a phone, so making voice services simple and affordable drove sales), hardware (consumers knew that they would use their phones all the time, and were willing to pay a premium for svelte fashion), and software (our current era, when consumers are seeking to do more than just talk and text). While Palm raises the bar in some aspects of its software, it still needs to be packaged in a device consumers are willing to buy. Palm acquits itself rather well here, with a form factor combining both a three inch capacitive touchscreen, and a sliding physical QWERTY keyboard. Every surface of the pre is curved, and when the screen is raised, it is angled towards the user, creating a banana-like shape. Like Motorola’s Z10, this feels terrific in the hand and places the earpiece and speaker closer to the ear and mouth. (Sony Ericsson’s XPERIA X1 is considered an “arc slider,” but that is horizontally oriented and the angle is too shallow to be meaningful.)
The screen is responsive and has 320x480 resolution (the same resolution as Apple’s iPhone in a slightly smaller screen size), 3G (EV-DO at launch, though HSDPA versions will be available as well), WiFi, GPS and Bluetooth 2.0 with A2DP (stereo support, unlike the iPhone), a 3.5mm headphone jack (unlike the HTC G1 and many of Samsung’s smartphones), a 3 MP camera with LED flash, 8 GB of internal storage and a removable battery (again, unlike Apple). Oddly, there is no microSD card slot, and the storage may quickly feel claustrophobic for anyone loading a lot of music or video. Any QWERTY keyboard is better than not having one, and the keyboard on the pre is bigger and more spacious than the one on the Centro and has better travel than the keys on Sony Ericsson’s XPERIA X1. However, there is still not enough travel on the keys and not enough doming; the keyboard on RIM’s Curve is much, much better. The pre’s hardware appeared to be nearly production ready – I made a phone call deep inside the Venetian that was loud and clear on both ends.
At the launch event Palm also showed off an inductive power charging puck that charges the pre without wires. This extremely cool accessory won’t be included in the box, and may well be obscenely expensive, but I suspect that it will be a huge hit regardless.
Challenges
The main problems with the pre are simple:
• The pre will launch as just a single phone at a single carrier, and that carrier is the weakest of the national operators. Sprint clearly needs a product like this, but will it promote it as heavily as it did the Instinct, especially as Android phones may be hitting Sprint’s shelves in the same timeframe?
• Consumers are consolidating around the winners in a tough economy. They are willing to invest in a smartphone, but it’s an investment, so it needs to pay off in the long term, and consumers may be wary of buying into a platform and accessories ecosystem that is not already established.
• Consumers may need additional reassurance to buy into a new platform, but they’re not getting it from the press. The blogging elite were all extremely enthusiastic after the pre launch (I sat next to the engadget folks and Robert Scoble), but the mainstream press hasn’t given Palm nearly the buzz that the iPhone received. For example, the Wall St. Journal buried it on the middle of page four of the Marketplace section.
• At launch the pre will have very few applications, and thanks to Apple’s App Store and heavy advertising, consumers now consider applications a key part of the smartphone value proposition. Existing Palm applications will not run on the pre, so long time PalmOS devotees will not be able to migrate their favorites easily.
• Similarly, webOS is yet another platform developers are being asked to support. App store details were not provided at the launch, and the webOS SDK (which Palm has delightfully named “mojo”) won’t be available until launch, and the type of applications that Apple is advertising most heavily – 3D games – will not be possible with the initial version of webOS.
• Finally, an HSDPA version of the pre is being developed, but the Sprint version is CDMA-only, which means that it will not roam in Europe or Japan. This is not important for most consumers, but it is something that many of the pre’s competitors offer.
Recommended Vendor Actions
• Palm needs to ship the pre by early May at the latest, and it has to be bug-free. Palm cannot afford the battery life or reception problems that Apple had with the iPhone 3G or the general bugginess of RIM’s BlackBerry Storm – both of those companies have broadly profitable businesses and could simply ride out the growing pains until software fixes were ready (or will be, in the case of the Storm).
• Palm needs to get the pre to the other three national carriers in time for the holiday sales season (there should be ample time for Sprint to benefit from its exclusive until then).
• Palm needs to rebuild its developer community rapidly, and seed it with contests and co-development funds if necessary. Part of that effort is getting the SDK out of beta and into production as quickly as possible, and the other part is releasing details on an Apple-like App Store, giving ISVs a clear distribution channel and simplified royalty terms.
• Apple’s secret weapon is iTunes, which serves as both a synchronization engine and a digital content store. Nokia has PC Suite and is feverishly working to build out its own version of Internet services with ovi. Palm needs some sort of PC synchronization software – not everyone has an Exchange server. In terms of services, Palm seems content to let others to the heavy lifting, but it should try to develop partnerships for multimedia content. Amazon’s MP3 store is a start, but a Netflix client would be a truly differentiated offering.
• The pre’s 8 GB of storage is not enough for power users. Palm should add a microSD card slot, along with pre variants with 16 GB and 32 GB of embedded storage.
• Aggregating data from social networks into contacts is not the same thing as aggregating the social networks themselves. Palm needs to push friend updates onto the pre, not just contact data.
Recommended User Actions
• Information-centric users looking for a new device should probably wait for the pre. There is nothing else on the market that manages as many sources of personal and corporate information in an integrated fashion.
• Entertainment-centric users and simplicity seekers should buy the iPhone 3G. Apple still makes the device with the easiest user interface, the simplest way of obtaining music and podcasts, and the only way of renting movies on a phone. Apple’s App Store is also growing rapidly and includes a large number of games and silly applets.
• Email-centric users and those with corporate security needs are still best served by RIM’s BlackBerry line. Every BlackBerry has a little light that indicates when new mail has arrived, which is opened automatically when the phone is pulled out of its holster. BlackBerries connected to a BES can be managed by policy and include security strong enough for most government agencies.
• Google-centric users can get a G1, which includes the best integration of Google’s email, calendars and search. However, they should probably wait until better hardware than the G1 is available. At that time, they should reconsider whether the Google support on non-Android phones is good enough.
• Those looking for the richest app selection should hold off and see how the platforms shape up in the near term. Palm OS 5, Symbian and Microsoft have the largest libraries today, but Apple’s App Store is growing the fastest, Android and Palm’s webOS are attractive, and RIM is beginning to invest in promoting application development as well.
Current Analysis provides comprehensive coverage of the U.S. wireless market through a combination of qualitative analysis and quantitative wireless price and feature tracking of the voice and data services, as well as the handsets available by the major U.S. carriers. This information is melded together in a web-based portal to provide rapid access to all relevant information. In the highly competitive U.S. wireless market, where strategies need to evolve on a weekly – if not daily – basis to maintain a competitive edge, Current Analysis is the only comprehensive provider of pricing and analysis. |
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