The downslide of Palm is a long-running tale, and the latest development is another round of rumors that the company is up for sale. Nokia has been mentioned as a possible buyer, even though such a deal wouldn't make a lot of sense, with Motorola and a private-equity buyout also mentioned. A story from BreakingViews in the WSJ laments the fall of Palm, saying it happened because the company "failed to build competitive barriers around its devices, so consumers weren't locked into its products." In short, it says the ability for Palm users to easily export their contact data from the devices made it too easy for them to switch to devices made by its rivals. Palm's made plenty of missteps along the way, but this really isn't one of them. Companies that can't compete any other way rely on barriers like this to force customers to stay. The article cites the example of the iPod, but badly misses on the lock-in part, not citing the role music bought from iTunes plays, but rather the bizarre idea that if users got a different brand of music player, they'd have to re-rip all their CDs. It falls further off the track when it cites the Motorola RAZR, saying it offered "insufficiently sticky features" to keep users from switching away. The RAZR didn't sell on features, it sold on design, and playing to fashion means playing to a clearly fickle market. In any case, it also ignores the realities of the handset market, where many users switch devices on a fairly regular basis. Locking in your customers isn't the way to keep them. Perhaps instead, companies should spend their energies on creating the best and most innovative products they can, making customers want to use their products, rather than simply feeling forced to.
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