Time For Palm To Drop WebOS And Embrace Android

from the the-time-has-come dept

It appears that Wall Street is giving up on Palm after sales of the Pre have been massively disappointing, and Sprint (their only US partner) appears to be focusing more and more on HTC Android-powered phones these days. At the same time, developers are recognizing that if they're creating mobile apps, they need to decide which platforms to work on, and the markets for the iPhone and Android smartphones look a lot more exciting.

This is, in large part, due to poor planning on the part of Palm and Sprint. First, Palm was way too slow in really opening up its developer program. By the time it finally got around to it, more and more Android phones were hitting the market, with much more of a marketing push. Developers, given the choice, will go for the platform that actually has users. That's why I still say it was a huge mistake for Palm and Sprint not to have figured out a way to give away the Palm Pre for free. The thing that Pre needed more than anything else was market share. With market share it could attract developers and a loyal following. Without that, Palm is dead and everyone knows it. Having failed at that, and now thrown away its head start over the rush of Android-powered devices hitting the market, Palm is quickly looking like an afterthought, just months after the Pre was released.

I actually stopped by a Sprint store earlier this week, because I was interested in seeing its recent Android-powered phones in person. I played around with them, and then picked up the Palm Pre as well -- and I have to admit that the hardware on the Pre is really nice. It's just a much nicer overall package than the HTC Hero (an Android-powered phone) -- more compact, had a more solid feel, and the slide out keyboard is actually quite nice (if a bit small). But, after seeing all the developer support moving towards Android, I have no interest in betting on a dying OS. And that's when I wondered why Palm didn't just release an Android-powered Pre as well. I recognize that it's got a lot invested in webOS, but it's a sunk cost and a losing strategy.

A few years back, after years supporting its own Palm operating system, the company started offering Treo's that supported Windows Mobile. It's time to do that again, but for Android, letting the company actually make use of a much larger, committed developer community, rather than trying to keep the whole thing in-house.

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Palm Finally Realizes It Needs To Help, Not Hinder Developers

from the back-to-its-roots dept

We've been getting on Palm lately for the widespread mistakes the company made in building out a strong developer community. Despite having had strong developer communities in the past, with the Pre, it seemed like Palm decided to simply copy everything (even all the bad things!) that Apple did with the iPhone app store. It was a terrible case of iPhone cargo cultism, that seemed to assume that if they just copied the iPhone's every move with developers, things would be just like the iPhone. Now that that's backfired, it looks like the company has come to its senses. It's brought in some Mozilla developers and opened things up wide. It's done away with the fee for developers. It's openly allowing people to offer their apps directly to Palm users without having to go through an insane and arbitrary approval process. And, the new folks promise this is just the beginning of a much more open offering. It's about time. This is the sort of thing that Palm should have done before it launched.

In the meantime... there are still other problems showing up, including odd complaints about hidden limits on how many apps you can get through the Pre app store, without any clear response from Palm. So, for every step forward...?

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See, The Palm Pre Can Be Offered For Free

from the was-it-such-a-ridiculous-suggestion? dept

A little over a month ago, I suggested that Sprint and Palm were making a big mistake in not offering the Palm Pre for free (more specifically, saying that Sprint should subsidize the full price). I don't think I can recall a post where more people told me I was so totally wrong. People insisted it was the dumbest idea ever, and that it would harm the brand value of the Pre, while costing Sprint way too much money. Yet, I still stand by that claim. Sprint doesn't make money selling the phone, it makes it by getting people to sign up for at least two years of Palm Pre service -- which is on the higher end of the service scale. The Pre is not as good as the iPhone, and did very little to really stand out from the competition. So the way to get around that is to offer the device for free.

At least some people seem to agree.

The device is now being offered in the UK... exactly as I suggested: free with a two year contract. At the same time, through some tricky step following, you can actually get the device for free in the US as well. I don't see how that takes away from the prestige of the device at all. If anything, it's only going to help make it easier for some people to at least try it out as a phone.

Of course, my other big complaint with the Palm Pre -- its weak developer support still stands. Famed developer Jamie Zawinski just wrote about his absolutely ridiculous experience trying to get two simple apps available on Palm Pre phones. It's taken months, and they're still not available, even though he wants to make them available for free. Instead, as with the iPhone, the "approval" process of getting apps into the app store are positively ridiculous. I had been seriously considering getting a Palm Pre (in fact, a few months ago, I was positive I was going to get one), but without real developer support, it's just not worth it. I'll wait until a decent Android phone is available instead.

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Why Apple Should Let Other Devices Connect To iTunes

from the stop-complaining dept

We've mentioned in the past how silly it is that Apple blocks the Palm Pre and other devices from accessing iTunes. Plenty of people responded, pointing out that Apple really makes its money on the hardware, and thus it makes no sense to allow other hardware products to connect to iTunes. While I agree that Apple makes its money off the hardware, I still disagree that Apple should block others out. In doing so, it makes me and many others less likely to purchase an Apple product, because I don't want to get trapped into Apple hardware. I'd much rather a more open solution.

Over at Slate, Farhad Manjoo has written up a wonderful explanation of why Apple should not just allow the Palm Pre and others to connect to iTunes, but it should encourage it. The whole thing is worth reading, but here's a snippet:

I hope the company continues to search for ways to sync with iTunes, because the fight--silly as it seems--is important, and Palm is clearly in the right. Apple may have the USB-IF on its side, and it may also be protected by copyright law. But by blocking non-Apple devices from its music app, Apple is violating a more fundamental principle of computing--that unalike devices should be able to connect to one another freely. The principle underlies everything we take for granted in tech today: It's why the Internet, your home network, and the PC function at all. And it's why Palm should keep storming the iTunes fortress.

I am not claiming that Palm has the legal right to hack into Apple's software, nor am I calling on any authorities to compel Apple to let Palm in; if the cat-and-mouse game turns into a courtroom brawl, it's very likely that Apple would win the fight. Instead, I'm calling on Apple to stand down. Even better: It should create a legal pathway for Palm and every other company to sync with iTunes. Why? The most obvious reason is that it's good for iTunes users. Nobody other than Apple benefits from locked-down software. Apple frequently extols the wonders of digital music--the convenience, the flexibility, the environmental friendliness. But how flexible can it be if you're allowed to sync your tunes only with devices made by a single company?

What's more, the iTunes block is hypocritical. Like every other tech company, Apple has benefited enormously from the spirit of interconnectedness that pervades the tech industry. The iPod would have fizzled if Microsoft had blocked it from hooking up to Windows PCs. Or look at the iPhone--Apple is proud that it can sync with Outlook, Microsoft Exchange, Gmail, Yahoo, and just about everything else. Indeed, you could argue that Apple, once left for dead on the periphery of the tech industry, managed to come back only because it skillfully marketed Macs as the most promiscuous computers you could buy.

Indeed. While it's unlikely that Apple will actually do this, it would be a smart move. No one's buying Apple hardware because it syncs with iTunes. They're buying it for many other reasons, and Apple can continue to compete on those. Blocking the Pre and other devices from accessing iTunes is petty and unnecessary.

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Sprint Offers Palm Pre For $100 For A Month, Maybe Two... Then, Oops, Not At All

from the great-moments-in-marketing dept

I recently explained why I thought Sprint made a rather large strategic marketing error in pricing the Palm Pre at the equivalent price of an iPhone: $199 (after annoying mail-in rebate that turns many buyers off). In fact, I argued why it would make a lot more sense to further subsidize the phone all the way to free, and make up the money on the backend with more subscriptions. Given how heavily invested Sprint was in the Pre, and how pathetic the sales have been to date, it really makes very little sense to keep the price so high. So, at the very least, I thought it was a good first step this morning when it was "announced" that Sprint was offering the Pre at $99. Of course, there were some silly things about this promotion as well. First, it only applied to new customers, transferring numbers over from other carriers. What better way to mock your loyal customers than to offer others a better deal? Second, they didn't just discount the phone, but gave you a "credit" that was split over the first three bills (better than a mail-in rebate, but still annoying). However, what was even stranger was that Sprint didn't even seem to understand the promotion itself. John Paczkowski noted that in some places on Sprint's website it said the promotion ran until October 10th. In others it said October 31st.

Apparently, the confusion at Sprint headquarters went well beyond that, because as the company attempted to sort out the confusion, it announced that it was doing away with the special promotion entirely. And yet, even after announcing it, the offer page remained on Sprint's site. It's not at all clear what happened here, other than Sprint seems somewhat clueless in how to do basic promotions, pricing and marketing. Obviously, the company intended to offer the phone for $99 -- it's on the company's own site. And yet, now it's suddenly claiming that it was a mistake? I can already see the business school case study on how not to launch an innovative smart phone.

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Why Sprint Should Be Giving Away The Palm Pre For Free

from the just-get-that-sucker-out-there dept

There was plenty of hype around the launch of the Palm Pre, which by all accounts is a pretty damn good phone (I've played around with it, and like it). However, Palm and Sprint made two huge mistakes in marketing it. First, they didn't have a really well-developed developer community building apps for it, so the app store is pretty weak. Apple did this with the iPhone when it launched (and we dinged them at the time as well), but Apple got away with it for two reasons: Apple is leading the field in such smartphones, and it's Apple, who seems able to bring developers to the table with cultish enthusiasm and loyalty.

Palm doesn't quite have that.

If the problem was that the SDK wasn't ready, Sprint and Palm should have waited. Launching before the phone was really ready was a mistake, and the company may be paying for it with rather weak sales after an initial burst. However, one analyst has a suggestion that I think makes a lot of sense, saying that Sprint should drop the price of the Palm Pre to $0.99. Basically, let Sprint subsidize more of the phone -- which it would easily make back in service fees (since the phone requires a two year contract with its most expensive data plan). Pricing the phone at $199 makes it a direct comparison to the iPhone, and that's the last thing that Palm or Sprint should want. But dropping the price to $1 (or, hell, give the damn phone away for free with a two year plan), would get it a lot of attention, and give people a real reason to switch away from other carriers or other phones, and give the Pre a shot. Trying to compete with the iPhone by just saying "but we're better" doesn't work. Rather than spending tons of money on creepy TV commercials that make no sense, why not use that ad budget to subsidize the phone in a way that really builds up a lot of attention and serious buyers? If Sprint did that, I'd go sign up for a Palm Pre that very day.

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Apple Does As Many Expected: Kills Palm Pre iTunes Syncing

from the iPetty dept

The pettiness of Apple continues... Last month, Apple warned potential buyers of the Palm Pre that it might break that phone's ability to sync with iTunes. It didn't take long for Apple to follow through. In an upgrade to iTunes, which Apple claims was for "bug fix" but also to handle "verification" issues, it has blocked the Palm Pre from accessing iTunes. This is pure petty behavior on the part of Apple. When the original statement was made, some assumed that Apple was really just saying that it couldn't be responsible if an update broke the syncing, not that it would purposely break that ability. But Apple's comments suggest they cut off the Pre on purpose, noting that it wanted to stop devices that "falsely pretend" to be iPods or iPhones.

The Palm Pre is a nice phone according to many people, but it's not making any serious dent in iPhone sales. Blocking it out of iTunes is just silly. I don't have a Palm Pre or an iPhone... but I do use iTunes. But now that I know Apple is breaking software and removing features, I guess it's time to look elsewhere. How's Songbird these days? Other suggestions?

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Apple Warns Palm Pre Users: We're Going To Break Your iTunes Syncing

from the shot-across-the-bow dept

I have to admit that I've never really understood Apple's ongoing efforts to block any sort of compatibility with both iPod devices and iTunes. You may recall a few years back the big fight between Apple and RealNetworks when Real tried to let its software connect to iPods, which Apple treated as a gross injustice. Now Palm is doing the opposite, by letting the Pre connect and sync with iTunes software by making the device pretend it's an iPod when connected to a computer. Apple, however, has responded with a neat little message that never actually mentions Palm, even if it's entirely transparent who it's about, warning people that Apple can easily break syncing when it updates its software. Of course, Apple did it in a way that it can claim wasn't meant nefariously at all. All the company really meant was to make people understand that it has no control over how the Pre syncs with iTunes, and it's possible that an update could break that syncing. Sure. Right. Except most people assume this means Apple intends to break it.

But I don't understand why. For people who bought the Palm Pre, that's only going to piss them off and drive them to use other software, taking them away from Apple's products. Why does that help Apple? Having Palm Pre syncing with iTunes increases the value of iTunes. What's wrong with that, other than being the latest example of Apple's dislike of anyone doing anything not invented in Cupertino?

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If Everyone Likes The Palm Pre, Why So Much Hedging?

from the I'm-Totally-Sure...Well,-Maybe dept

The Palm Pre launches at Sprint this Saturday, and you've probably been seeing an increasing amount of buzz on the subject [that is a Google search link, and today will show buzz, but if you're reading this later, will be meaningless]. I wrote about the Pre on Techdirt after being very impressed with the phone at CES and MWC Barcelona. I wrote, "I'm not sure when the bandwagon is going to hit the trail for this device, but I'm saddling up right now." And in the intervening months, I've noted that more and more reviewers were, like me, heaping praise on the device. But there was something else: many reviewers couched the endorsement of the Pre with caveats. At the end of every glowing article was a conclusion that seemed out of sync with the review. Here were mine, "I can't predict whether the developer community will rally around the Pre, or whether Sprint and Palm will be successful in selling big volumes, but I want to call this one early: the Pre is a great smartphone." Walt Mossberg at the WSJ wraps up his glowing review with, "All in all, I believe the Pre is a smart, sophisticated product that will have particular appeal for those who want a physical keyboard. It is thoughtfully designed, works well and could give the iPhone and BlackBerry strong competition -- but only if it fixes its app store and can attract third-party developers."

The caveats were reasonable. Developers have limited resources, and collective uncertainty in Palm and Sprint performance has us hedging our bets. Sure, we could assert that the device is great, but we could not be sure if the ecosystem would grow around it. But I think I'm in a better position to do that now. When 98 out of every 100 reviews say the device is great, isn't that one hell of a consensus? I haven't seen that kind of agreement in this industry since AFTER the launch of the iPhone. That's exactly the kind of community consensus that seeds an ecosystem. I officially retract my hedge. What content developer wouldn't be at least attracted to a device that gains such consistently high grades? Is it just hype? No. A landslide of positive reviews from people who actually tested isn't hype - it's straight As. That's good news for Palm, good news for consumers in that we get another competitive device to run alongside the iPhone, but only marginally good news for Sprint. Verizon took the wind out of Sprint's sales [sic] by announcing they, too would carry the Pre by year end, and AT&T is rumored to want a GSM version.

Derek Kerton is an expert at the Insight Community. To get insight and analysis from Derek Kerton and other experts on challenges your company faces, click here.

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Dear Palm: The Last Thing You Want To Do Right Now Is Screw Over App Developers

from the bad,-bad-idea dept

The Palm Pre comes out in a few weeks, and many are hoping that this is finally the smartphone out there that can capably compare to the iPhone. Of course, one key to that is having a devoted developer community that makes the device more valuable. Palm is betting the business on the Pre, and some of the early reports I'd heard from developers about its WebOS platform were that it was a great development environment. Since I think it's good for the overall market to have strong competitors, I was hopeful that maybe the Pre would live up to the hype (to be honest, I'm thinking about getting one myself). However, slimcat, points us to the story of overly legalistic Palm overreacting to a minor issue and canceling a chance to work with the folks who were setting up PreDevCamp. Now, Palm had no obligation to work with the folks setting it up, but it would be a good way to support the developer community. So why did they bail out? Apparently because one of the folks behind PreDevCamp mentioned on Twitter that he was meeting with Palm, but that he couldn't say anything since the meeting was under NDA.

Now, if you've been around larger companies for any length of time, you can see why this happened. It's pretty standard that a meeting under NDA means that even the fact that the meeting exists is covered by the non-disclosure agreement. So... I can understand (at first glance) how Palm reacted. But, Palm really should have taken a step back and looked at the larger picture. Having the guy reveal the meeting was hardly a big issue. The bigger issue is helping developers feel as comfortable as possible developing for the Pre and making the device as valuable as possible. Freaking out over a harmless "leak" about the meeting is missing the big picture in a way that only hurts Palm. Update: Looks like things are getting worked out with Palm apologizing for overreacting and a nice airing of differences that seems to have worked well for both sides.

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Pre-Brief Of The Upcoming CTIA Conference

from the Too-Soon-For-A-De-Brief dept

With the US mobile phone industry's leading conference kicking off in Las Vegas, I thought it might be fun to write a small "pre-brief" of the trends to expect from the show. This CTIA Show comes close on the heels of the huge, Europe-based Mobile World Congress, and I would have dropped a blog post from there...if my Netbook hadn't been stolen! Here's what to expect from the CTIA show:

App Stores: What was innovative about Apple's App Store? It is a single point of sales, it's trusted, compatible, it offers tested apps, and it gives a large (70%) revenue share to the application developer. Nothing new there, but damn, what a success. Once again, Apple succeeded by (not doing anything revolutionary, but) using a simple recipe that makes sense and motivates all stakeholders. Sadly, a similar 'imode' app store has been done by DoCoMo in Japan since 2000, but North American carrier imitations usually neglect being remotely 'open' and don't offer a large revenue share to developers. Turns out, this is fairly important if you want to stimulate a large, diverse offering of useful, high-quality applications. Anyway, all those companies that didn't copy imode are now copying Apple, so expect to see more news around Microsoft's store, RIM Blackberry's store, the Android store, and more. The trend is good, since it will get more money in developers' hands, and should help some phone owners find applications that make their devices more valuable.

Mobile Broadband/Embedded Broadband: There will be lots of talk and probably a bunch of announcements about mobile broadband access at the show. I am referring specifically to the use of cellular broadband modems in devices that are not phones, such as Netbooks, Laptops, cameras, readers, media players, etc. I am moderating a panel on this subject at the CTIA show, and I'm thrilled to be doing it, because it is such a major trend. The two driving forces to this trend are the 3G networks that are already in place, and carrier willingness to sell new kinds of service plans. Carriers have been somewhat stuck in a rut of thinking of mobile access as "one phone, one contract, $60/mo." But recently, their thinking has been changing, and the notion of wholesale businesses of selling connections to devices like Amazon's Kindle is gaining steam. Expect to see more news of daily connection plans for laptops (like Wi-Fi Hotspots), and wireless data bundled in the price of other consumer electronics. 

Femtocells: A femtocell is a small box that looks like a Wi-Fi router, and similarly plugs in at your home or small office. But instead or routing laptops to the Internet, a femtocell routes telephone calls from your mobile phone to your carrier. Put one of these in a home or office with poor cell reception, and instantly get four bars. That's good for you and the carrier, who gets to keep you as a customer. But what also benefits the carrier is that your phone's traffic is now carried over your broadband connection, saving their towers from having to allocate capacity to you. Sprint has it, T-Mobile uses a special variant, Verizon has recently launched it, and AT&T is piloting these devices. I expect femtocells to successfully creep into the marketplace, and we'll hear a fair bit about femtocells at the show, but also other new ways of delivering cellular service like Distributed Antenna Systems, Repeaters, and such.

Backhaul: Wireless data use is taking off. Driven by flat rates, popular and easy to use phones like iPhone, and supplemented by growing use of cellular modems to laptops and Netbooks, people are finally exchanging significant amounts of data traffic from cell towers. But these towers were initially put in place for highly compressed, narrowband voice traffic. As such, each tower was often connected by a meager T1 line. The connection that the towers have to the core network is called "backhaul," and yesterday's backhaul is woefully inadequate for tomorrow's data traffic loads. The short-term solution was to just add more T1s...but the costs of this rapidly become prohibitive. So the long-term solutions that will be discussed at length in Las Vegas are point-to-point microwave wireless relays, metro Ethernet, and fiber optic connections.

The Palm Pre: I'm not sure when the bandwagon is going to hit the trail for this device, but I'm saddling up right now. I've been negative on Palm for a while, but I saw the Pre at CES in January and was pleasantly surprised, but unfortunately didn't allocate much time to Palm. Subsequently, I spent some time with the Pre at MWC in February, and was very impressed. Of all the phones I have seen since the iPhone came out, this is the first one that I think may be better -- and I am very fond of the iPhone. I use a very powerful HTC Windows phone, and when I see the Pre in action, I find myself repeatedly saying "I wish my phone could do that." 'Synergy,' the Pre's ability to pull together your contacts, emails, calendars into one consolidated view, is a favorite element. But what really struck me was the User Interface, which is very visual, very touch, and very intuitive. I felt the same way I felt when I first saw the iPhone in action. The Pre is not an evolution of previous Palms. It is a new starting point, and like the iPhone, it seems devoid of classic silo thinking and lousy UI baggage. I can't predict whether the developer community will rally around the Pre, or whether Sprint and Palm will be successful in selling big volumes, but I want to call this one early: the Pre is a great smartphone.

More iPhone "killers": We've seen handset vendors offer so-called iPhone Killers at every turn since June 2007. I have found almost every such claim to be unfounded over the past 2 years. I have written that a touch screen and square icons do not an iPhone Killer make. But quarter-by-quarter, the competitors' claims get more and more credible. While HTC, Nokia, RIM, Samsung, and LG make incremental progress to matching the iconic device, I think Palm has the real bomb to drop, if they manage to get the Pre to market on time.

Android: The past year was almost devoid of Android handset announcements. Barcelona was strangely silent on that front. In fact, we haven't heard much about new Android handhelds since the T-Mo G1 was announced early in 2008! But there's enough rumors floating around to suspect a batch of Android announcements this week. Let's wait and see. 

Google Voice: Google recently announced their Google Voice service, and it has created quite a stir in the industry. The fixed carriers have long felt threatened by Google, although the search giant had yet to fire a shot across the mobile carriers' bow. So long as it stayed in search, email, web VoIP, advertising, and location services, Google was only a thorn in the cellcos' side. But with the addition of Google Voice (GV), Google is now going straight at the heart of the carrier's core service. GV is essentially a disintermediation play, where users will use just one phone number, provided by Google, and can intelligently route and manage their phone calls to desk, cellphone, voicemail, email, etc., by using a web dashboard interface. By using a Google phone number, users needn't even tell anyone their cellular or landline numbers -- the carriers become pipes for the Google Voice customer. Expect to see and hear some responses, which have already started from other newcomers like Skype, or classic solution vendors like AlcaLu.

Meet Huawei: If you are not familiar with this company yet, better learn how to pronounce the name. Huawei is the leading example of the next generation of telecom infrastructure providers out of China. They have been selling competitive equipment for years, but carriers in Western countries have been reluctant to adopt their products based on a perceived quality gap with leading vendors like Ericsson, Nortel, Motorola, and Alcatel-Lucent. But the winds are shifting. Tougher economic times, paired with some successful Huawei reference cases in Leap Wireless, Cox cable, and Canadian telcos, prove that Huawei can compete on quality and price. Huawei is growing its presence in the US, recently opening offices here in Silicon Valley. Could a major US carrier deal be in the making?

Derek Kerton is an expert at the Insight Community. To get insight and analysis from Derek Kerton and other experts on challenges your company faces, click here.

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Analyst Says What We Already Knew: Apple's Multi-Touch Patent Fight Won't Help Its Business

from the in-case-you-didn't-get-it-yet dept

After Palm showed off its new Pre smartphone, including the device's multitouch interface, at the Consumer Electronics Show last month, Apple made some threatening noises about how it would go after anybody who "ripped off" its intellectual property. As always, we didn't see how this would benefit anybody in the marketplace, since competition pays benefits to consumers, and drives participants, even Apple, to continually innovate and improve their products. Now, a wireless industry analyst has called Apple's threats into question. He makes the point that a long, drawn out IP fight won't help Apple's business in the long run: "Building on the company's legacy as one of the greatest innovators in the technology industry may be a smarter business model than taking on the rest of the industry in a battle that may be impossible to win."

His reasoning is twofold: first and most obviously, Apple stands to gain more by competing in the market than competing in the courts. Second, he says that if Apple went ahead with patent suits, it may not be able to win them. He says that it appears that much of Apple's multitouch IP portfolio is based on work from a couple of its employees -- who also were granted a number of multitouch patents while they were employed by the University of Delaware. The University holds those patents, while the analyst also found a lot of potential prior art he says could threaten the Apple patents' validity if they're reviewed. So if Apple realizes the patents may not stand up to a review, it could explain the bluster; but once it's clear the threats are empty, they hold no value. The question now seems to be how long Apple will try to play out the show, and how many resources it will throw at it that would be better spent on developing its products.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Apple Threatening Patent Lawsuits Over New Palm Pre

from the ugh dept

You may recall back when Apple first announced the iPhone, Steve Jobs proudly talked up how the company had over 200 patents on the various technologies in the phone. We wondered whether the company really needed those patents. After all, most of the "new" technologies in the iPhone weren't really new at all. The compelling part of the iPhone was that it was put together in a nice (relatively inexpensive) package, and designed so well that people wanted it. The massive success of the iPhone since then has highlighted that fact. It had nothing to do with patents, and everything to do with designing a phone that many people wanted. And, of course, the patents did absolutely nothing to stop patent infringement lawsuits from being filed against the company. However, Apple had resisted using those particular patents against anyone else... but that may be changing.

On the latest earnings call, when asked about the new Palm Pre phone, which is getting fantastic reviews for actually doing a bunch of things better than the iPhone, Apple's Tim Cook made it clear that the company was examining patent lawsuits against Palm:

We like competition--as long as our competitors don't rip off our IP. And we're going to go after anyone who does. I'm not talking about any particular company, but we are ready to suit up and go against anyone. We will not stand for having our IP ripped off, and we will use every weapon at our disposal....

In other words, Apple doesn't really like competition -- at least not competition that improves upon an idea before Apple is able to do so. Once again, we're seeing the problem of patents and left wondering where the benefits are. Having a strong competitor to the iPhone in the market will drive everyone to more rapidly innovate and improve on the offering -- and that's only going to be good for everyone. More innovation will drive more revenue while making happier customers. Using patent lawsuits to take a strong competitor out of the market (or distract them with court time and costs) is about tearing down innovation, rather than encouraging it.

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Palm Centro Hits Market Sweet Spot; Making Smartphones Affordable

from the not-dead-yet dept

We've been down on Palm Inc. for some time now, as well as its tired OS. Just see any of the recent stories we've written here on the subject. Palm, its handheld computers and its OS were once the darlings of the IT world, and universally loved by almost all users. Palm devices performed a few tasks very well in an era where that was cutting edge. Unfortunately, as times moved forward, Palm's OS did not, and today it performs too few tasks, and performs them not that well. But despite our normal criticisms, this post is about how great the release of the Palm Centro in Europe and on AT&T is for the market. Given the still-tired OS don't expect cutting edge data applications: the main winning feature of this device is the $100 price tag. That's important because not every smartphone wannabe-user is ready to deal out the $400 for the entry-level iPhone, and the Centro addresses the millions of potential smartphone buyers that fall below Microsoft's, RIM's, Nokia N and E series' and Apple's price points. Some of these consumers still want a keyboard, a PIM, e-mail service, a browser, and such, but with a lower budget. Centro will offer that, and will be joined by other future cheap smartphones with Symbian, Android, and other Linux derivatives. By the end of 2008, anyone who wants a smartphone will be able to have one (whether or not it's from Palm), and that's a big deal.

An interesting upshot of all this is that, as smartphones start becoming highly affordable, and anyone interested in owning one will do so, that group will also represent just about anybody interested in the mobile Internet and data services. If all these subscribers have devices that enable sideloading and direct installation of third party apps, the "walled garden" strategy will be increasingly futile. Carriers can still have the "carrier deck", and many customers will use it for convenience, but it will have to compete with off-deck solutions. It's about time.

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Palm Realizes It's Not Apple; Closes Retail Shops

from the so-much-for-that-plan dept

Over the last decade, plenty of technology hardware companies thought it would make sense to open their own retail shops. Sony, Gateway, Palm and Apple all went down that path. Of that list, only Apple has been able to turn those retail stores into something valuable. Gateway was the first, but its retail effort failed miserably. Sony's retail effort was always based more on the idea that the stores are not there to sell products, but just to display them. Sony has always admitted that the stores were more about brand and product awareness than sales -- but that's partly because it doesn't want to piss off its channel, so it prices everything quite high in its own stores. Apple doesn't have that problem, as it has total control over its distribution channel and retail pricing. Of course, the difference here is that Apple's stores and products are designed so people actually want them.

And then there's Palm. Palm used to always be compared to Apple, back in the day. But, that was back in the day when Apple was a struggling computer company. Since Steve Jobs reinvented Apple as being cool again, those comparisons sort of disappeared. Its own retail strategy was clearly an attempt to copy Apple, but without the cool products (or the cool store design) it never did anything useful for the company. About the only surprise coming out of Palm's decision to shut down its retail stores is that it took this long to decide to pull the plug.

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NTP's Latest Patent Shakedown Must Wait For USPTO; Why Wasn't RIM Given The Same Consideration?

from the innovation-at-work dept

Even if you just have a passing interest in the topic of patents, you've probably heard of the RIM-NTP case. That's where NTP, a company that ended up with some excessively broad and obvious patents after the inventor was unable to build a product anyone actually wanted to buy, sued RIM, the makers of the wildly successful Blackberry device, claiming patent infringement. The attention the case got caused the US Patent Office to look closely at the patents, and very publicly state that it was rejecting NTP's patents, as they never should have been issued in the first place. However, rather than waiting for the official patent review process to work itself out, the judge in the case pressured the two sides to settle, forcing RIM to cough up $612.5 million for no good reason. It never made sense that the judge refused to wait for the Patent Office to finish its review -- especially since the office had been so public in questioning the validity of the patents.

NTP took its winnings and immediately started looking for others to sue while the patents were still valid. It started with Palm, makers of the Treo. However, in that case, the judge realized what was going on and put the case on hold until the USPTO could make a final decision on the validity of the patents. Not willing to standstill, NTP sued all the national US mobile operators (Sprint, Verizon Wireless, AT&T and T-Mobile) for selling devices like the Blackberry and the Treo. Once again, though, it looks as though a judge realizes that it's ridiculous for such a case to go forward when the USPTO has expressed so much skepticism towards the patents. Against Monopoly lets us know that the judge for the Sprint, Verizon and AT&T case has also put the case on hold until the USPTO is done. What no one wants to explain, however, is why RIM wasn't afforded the same opportunity?

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NTP's Back, And It's Brought More Lawsuits

from the oh-you-again? dept

Everybody's favorite patent troll, NTP, is back. It, of course, was the company that managed to wring $612.5 million out of RIM, maker of the BlackBerry, for patent infringement -- despite the patents in question being on their way to being rejected by the USPTO after a bunch of prior art came to light. NTP has now sued AT&T, Verizon and Sprint, as well as T-Mobile, for infringing on the same patents. RIM's settlement with NTP was widely believed to protect its carrier customers from infringement suits, but it's likely such protection extended only to their use of RIM products, not other mobile email systems. It's not too surprising that NTP sued, since it's a patent troll and that's what they do, though it's slightly curious since the suits were filed in the same Virginia court, with the same judge, as its previous cases. This includes its earlier suit against Palm, which the judge put on hold until after the validity of NTP's patents is finally assessed. It's likely the same thing will happen here, but NTP probably doesn't care too much -- it's just looking for more leverage to wring undeserved settlements and licensing deals out of anybody it can.

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Palm Figures Out A Way To Spare The Foleo From A Poor Launch Reception -- Kill It Off Beforehand

from the how-to-avoid-failure dept

Palm tried its best to whip up a ton of hype around the Foleo, the "smartphone companion" it announced at the end of May. Unfortunately for the company, the reaction was overwhelmingly negative. The device itself seemed fairly pointless, and its main function seemed to be to highlight the poor user experience of the aging Palm OS platform on its Treo smartphones. Well, Palm's gone and saved itself from having to deal with the terrible reaction the Foleo was pretty certain to get when it hit the market -- by canceling the device completely (via Engadget). The blog post from Palm's CEO says the decision was made so that the company would only have one internal software platform, in addition to Windows Mobile, and that it plans a "Foleo II" when that internal platform is ready (if ever, since the platform in question's been talked about since 2004 or so). Killing the device is a pretty extreme course of action, particularly if the Foleo was, as the Palm announcement claims, "nearly at the point for shipping." If that were true, the company had almost certainly begun manufacturing them already, but given Palm's track record for moving very slowly on the product front, it seems more likely that the Foleo was fatally flawed. There were rumors several days ago that the Foleo had been delayed because of software bugs, including a pretty significant one that kept the device from syncing with Treo smartphones -- giving further credence to the theory that this decision was taken because the device was screwy and destined for failure, rather than as a matter of platform strategy. If that is indeed the case, it merely raises further questions about Palm and its viability.

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Taiwanese Contract Manufacturers Set Sights On Brand-Name Prize

from the store-brand-soda dept

Despite manufacturing plenty of the most recognizable electronics products in the world, and making plenty of money, the names of most Taiwanese contract manufacturers aren't familiar to consumers. For instance, Hon Hai Precision Industry generated revenues of more than $26 billion last year by making products for Apple, Dell, HP and other companies. But the Taiwanese firms are increasingly trying to leverage their experience and expertise by establishing their own consumer brands and using them to boost their product margins. Contract manufacturing is a low-margin, volume based business: for instance, one analyst says contract manufacturers of laptops have 3-5% margins; compare that to the 40% or more Apple enjoys on iPods. But growing the brands can be a tricky proposition, and not just because the companies are looking to enter new and unfamiliar consumer markets. The problem is that these companies are looking to become competitors to their biggest customers: for instance High Tech Computer, which makes mobile phones for a variety of companies, is building up its HTC consumer brand, and competing with clients like HP and Palm in the process. Some are trying to get around this by splitting off their consumer operations from their contract-manufacturing businesses, such as Acer did successfully several years ago. Still, that's not the only obstacle. Getting the consumer marketing right remains a big issue -- particularly when the new consumer brands are competing against companies for which marketing, not manufacturing, is a specialty.

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