May 22nd, 2008

If you’ve read anything about Palm in the last year, chances are it’s been bad. For example, in September of 2007 they canceled the Palm Foleo, a device they previously and proudly trumpeted as the revolutionary future of mobile computing. Then they delayed the launch of their “new” OS from 2008 to 2009, laid off some employees and now, a Voyager, iPhone and BlackBerry Bold later, investment firms have downgraded their stock to a sell.

The reason for the downgrade? The future of Palm’s competitive market is too fierce and Palm is too slow. The fact that their new Linux based OS won’t launch until the first half of 2009, at the earliest, has some industry insiders suggesting Palm needs to adopt Android or face becoming an endangered species among a growing list of mobile super powers.

But Palm isn’t admitting a loss to Darwin’s Theory just yet: they have just launched their Virtual Developer Lab that will make developing applications for the Palm platform much easier. As Jessica Dolcourt from CNET explains:

It’s one thing to bang out a quick third-party program for a single phone model, and quite another to develop a mobile application that works as predicted on a battalion of cell phone models, each with their own set of finely cultured specs.

The purpose of the Virtual Developer Platform is to allow application developers to virtually test their wares on any of Palm’s 13 handsets, from anywhere in the world, at the cost of $100/month plus $13-$16 per hour. Or, if you’re a developer, you could spend your time more efficiently building an application for the iPhone or Android and having instant exposure to a MUCH, MUCH larger audience. Thanks anyways.

Noting the increasing number of Palm customers flocking to alternatives such as the iPhone and Blackberry Bold, we’re guessing this is too little too late, Palm. With the 3G iPhone and BlackBerry Bold looming in the summer months, Android coming by year’s end and an inevitable slew of handsets in time for the holidays, you can forget that slap: it appears that Palm will soon be pummeled by an Open fist.

Have their executives miscalculated? Have strategic decisions been made in error? Is the corporate structure too limiting and inflexible for rapid progress and change? Whatever the reason, the folks at Palm need to either drop some game changing news or be prepared to go the way of the dinosaurs.

Their upcoming Palm Treo 850 looks promising – it could fit right in there with the big boys – but if it has the ball and chain software to accompany it, who will buy it when there are much better alternatives?

If the executives over at Palm are smart, they’ll swallow their pride and view Android as an opportunity to claw their way right back into the market. Nobody says they have to completely drop their future OS… but offering their consumers an immediate solution while they develop their own could prevent a massive amount of customers from hitting the exit.

Like Palm, BlackBerry is known for producing high quality handsets that rely on spacious keyboards for active mobile users. That hasn’t prevented them from the developing the upcoming all-touch-screen BlackBerry Thunder, a device that deviates from their traditional handsets to capture a different segment of customers. Sure, hardcore BlackBerry enthusiasts may be turned off by the release, but they’ll simply buy the BlackBerry Bold which sports a full keyboard. And, they’ll capture many new customers, and retain existing customers, who might have otherwise preferred the iPhone.

So is adopting Android admitting defeat? Not at all… it’s staying alive with 2 out in the 9th by taking one for the team and leaning into an inside fastball. If any Palm executives are reading, do yourself a favor and put Android on a couple of your handsets. It will, in the least, buy you some time to pursue your own OS before your last couple hundred fans on earth stop caring.

And who knows… perhaps Palm will have so much success with the Android platform that they decide to shift their business model a bit, finding renewed innovation and success in a different form. It wouldn’t be the first time… stranger things have happened. Remember the good old days when AOL sent out bulk CD-ROMs promising free internet service for the first month and $19.99 thereafter?

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