In May of last year (Will the Pre be Palm’s Tonic?) I was doubtful as to whether Palm was going to do well enough with the Pre to win over current smartphone users. It looks as if I may have hit the mark with this prognostication with one exception; at that point none of us knew that Android would come on so strong.
In December of last year (Palm Rubbing Their Palms in Their Eyes) I wrote that Palm had not done well enough with its initial push to capture enough of the market to gather the momentum it would need. While Palm did end up pushing about 900,000 units to the channel the sell-through was a rather dismal 650,000 units or so.
Palm is trying hard to be a phone company but it just has not done what is needed to get to that point, and time is running out quickly. In some measure it seems Palm has been ignoring the marketplace; people have been saying they need to release new, compelling hardware. While its current phones are fine they are snubbing the trend of slate devices. Not everyone is going to want a hardware keyboard with a relatively small screen.
Palm’s real problem is that it may not have the resources left to launch new phones or to rewrite its OS for a larger screen. The company has been trying to stretch the Pre and Pixi as far as possible but if people aren’t taking to those its time to move on.
Yes, Palm still has money but also has a horrible burn rate. In many ways the company is back to where it has been in the past and may need to split off the OS team as a standalone company and license out the OS. WebOS is really a very nice OS and I’d hate to see it go, but Palm is far too bloated a company given it’s current levels of income.
So, lets start the pool: Who is going to buy Palm…or maybe just the IP.