Four Ways to Save the Palm Brand

Smartphone Maker Created a Market, Then Lost It. A Fan Explains How to Win It Back

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Mrinal Desai
Mrinal Desai
Aug. 29, 1999. I had just "gotten off the boat" at the San Francisco Airport to study business in the land of opportunities and choices. My first adventure to the grocery store highlighted it all. I wanted "plain" milk and had the choice of low-fat, non-fat, whole, half and half, 1% or 2% milk.

Paradoxically, at that time there was only one obvious trailblazer for handhelds -- the Palm Pilot. It let users manage calendar and contacts with a touch screen. It enabled gestures on the screen to write and recognize text! In fact, its native "apps" were laid out on the screen very much like today's smartphones. As a poor immigrant student, I thought it was the coolest gadget. To my utter delight, some friends from graduate school pitched in to buy me a Palm Pilot for my birthday -- Dec. 25, 1999 -- three months and 26 days after my arrival to the U.S.

One million Pilot organizers were sold in its first 18 months of release, which gave it a faster adoption curve than the Macintosh, IBM PC and even the microwave oven during that time. By early 2000, an estimated 6 million Palm units were sold with a market share of 68%. I had every Palm handheld that came out -- from the Palm III to Palm Vc and to the Treo 400 phone. I even paid an exorbitant $450 for the Treo 450 upon its release in fall 2004. It didn't stop there. I found myself at Sprint selling Palm phones to small businesses before I eventually went to work at a then-fledgling company called LinkedIn in December 2004.

Palm Pre
Palm Pre
Between then and now, I also owned a BlackBerry. It never succeeded in eliciting an emotion from me as a consumer. Today I "wear" an iPhone and evangelize it to everyone. I'm comfortable parting with everything I own except the iPhone.

We all remember the fanfare of the Pre launch. Walt Mossberg of The Wall Street Journal said that "it's fully in the iPhone's class"; Steven Levy of Wired wrote, "It's a huge win"; Joshua Topolsky of Engadget marveled, "Yes, this is epic stuff!" Fast-forward today and you'll find analysts targeting Palm's stock price at $0.

In my opinion, all is not lost. With $500 million in the bank (which gives it about 12 months) here are four things Palm can do to turn itself around in the market it created.

Share revenue with developers
I was at the All Things Digital Conference in June last year when Jon Rubenstein and Roger McNamee demonstrated the Pre a week before its launch. On stage they said there would be a dozen apps at launch. My heart sank. As a consumer and marketer, a dozen for me just paled in comparison to iPhone's then 50,000. Android had almost 5,000 and even RIM and Nokia had a little over a thousand.

Developers make platforms successful -- Palm knows that from its very own history. Microsoft, Facebook and now Twitter exemplify that. Heck, even CTIA, known to be focused on carriers, is committing to developers.

Historically, Palm didn't have a revenue share with the app developers -- go back to your roots. Remove the 30% commission and blaze a trail. Change the rules. Apple has sold over 250 million iPods through those almost-no-margin 99-cent songs. Not surprisingly, app sales are expected to grow beyond those of CDs by 2012.

You may want to believe it is about the carrier's voice network but it's not. CNET said AT&T takes the phone out of the iPhone but it continues to show rapid growth (and contributes to that of AT&T's).

Get help from carriers
Droid managed to sell more than 1 million units in 74 days (yes, that definitely beats the Palm Pilot) thanks to a significant boost from Verizon's $100 million marketing push. As a marketer, I want to see Palm persuading Verizon to do more even if they are distracted with Android. Palm is finally coming to AT&T in the coming months, and that's a great. If AT&T can fight against Google Voice, compete against the Nexus One and still sell an Android, they can push millions of Palm phones. Not a Pre, not a Pixi, not an OS -- a Palm. As a startup person, I've always been selling for survival -–and Palm should too. I'd encourage Palm to start thinking like a startup.

Partner with Amazon
The Kindle is under onslaught from the iPad and every other e-reader out there. The Palm WebOS could be the core of all its mobile devices (yes, I believe there is going to be more than one in the future) from Amazon. The Kindle has a software development kit too -- do we need yet another one for developers? Can there be a tight integration for Amazon Web Services and app developers? Absolutely.

Amazon can/should become a publisher of some "amazing apps." They acquired Snaptell, an iPhone app. Its own app along with the Kindle app has been very successful. EBay's iPhone app was expected to register $400 million in purchases last year. Furthermore, a recent Forrester study suggests that $917 billion of retail sales were influenced by the web. Amazon wants to be there. It's a significant distribution channel with its Amazon Wireless store. With the need to own more stacks of the customer experience as an end-to-end solution, Amazon would be the perfect suitor for Palm if needed.

Revive the brand
Steve Jobs said "palm of your hands" twice within one minute in the first 15 minutes of the iPad announcement. Revive the Palm brand. Revive the Palm Pilot. Bring the Palm III and V back, and tie it all together to a Palm today that multitasks. Even the upcoming Windows Phone Series 7 does not have multitasking, but Palm does!

Tell consumers the Palm can multitask. Show consumers the Palm can multitask. Create a commercial with a laptop that does not multitask and ask consumers if they would "buy" that?

Developers like multitasking because it increases engagement, which means more potential advertising dollars -- sell them that.

ABOUT THE AUTHOR
Mrinal Desai is an adviser at CrossLoop, a company he co-founded and which is funded by El Dorado Ventures and Venrock. Prior to that, he was the first business development manager at LinkedIn. He has been recommended by Ad Age as one of "25 Media People to Follow on Twitter" and you can follow him here: twitter.com/mrinaldesai.
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