Preview of Palm's Pre: Being Good Is Not Always Good Enough

Palm’s (PALM) last chance for survival is going on sale Saturday. Operator Sprint (S) has almost as much at stake. It claims an exclusive on the Palm Pre through the end of the year, despite Verizon’s (VZ) hope to offer it real soon now.

A number of sites (ZDNet, PC World, Barron’s) are summarizing the Pre reviews, which range between glowing and fawning. Take for example this AP review:

Move over, iPhone. You've had two years on top of the smart phone world. Now there's a touch-screen phone with better software: the Palm Pre.

In a remarkable achievement, Palm Inc., a company that was something of a has-been, has come up with a phone operating system that is more powerful, elegant and user-friendly. …

So webOS makes the iPhone look clunky, which is stunning in itself. It also thoroughly shows up Microsoft Corp.'s (MSFT) Windows Mobile. That operating system has had multitasking for years, but few users have appreciated that. Rather, Windows Mobile has been blamed for making phones clumsy and slow. Now, webOS comes along and does multitasking right.

I am more that a little skeptical. Reporters like the underdog, both for personal biases and also because it makes for a more interesting “horse race.” So just because they say the Pre is better doesn’t mean that it is. (In fact, the only claim is that the software is better, not that the hardware is better.)

However, suppose the Pre is better: so what? We figured out decades ago that the aphorism “build a better mousetrap and the world will beat a path to your door” is an engineer’s self-delusion.

The reality is that better is not the only reason people buy phones. There’s also carrier switching costs, status, price, form factor/convenience, and now the availability of third-party complements.

Palm is trying to leverage its hacked iTunes download capabilities
to equalize one difference — the iTunes store. (Apparently Apple (AAPL) is trying to break that effort via the iTunes 8.2 update).

Even with iTunes songs, Palm still needs an app store. Or rather, even with an app store, it needs applications — which means it needs to seed developers with tools. And then developers need to be convinced they should develop (unless they decide there’s an inherent advantage in coming early to a tiny but hopefully growing market).

So the odds are long. The Treo, once dominant in the US, has been a stagnant niche product over the past 3-4 years.

The most optimistic thought would be that no one thought Apple could enter the market late and challenge Nokia (NOK) and Research in Motion (RIMM). Clearly Apple succeeded and continues to have momentum. It’s possible that Palm could succeed too, but my hunch is that Apple, RIM and Palm are splitting the same market — which means that Palm will be competing against two very entrenched competitors.

Sprint is the low cost provider among the US Big Four operators. Perhaps Sprint and Palm can bring smartphone and 3G services to the masses. One can only hope.

Comments

[Aryamehr:]

If you are skeptical I suggest you use the phone before you make any disparaging remarks. This phone will impress anyone who can put their partiality aside, it is just the best! Until you can find me a human without flaws I suggest you come down to earth and accept near perfection, because this phone is as close to near perfection as possible, considering the current technologies available. What impressed me the most is its ability to simultaneously have 7 of my applications open and running at the same time, unlike the iPhone. Yes it is energy consuming, however Palm gave us the option to change the battery if need be, unlike the iPhone. It has a decent qwerty keyboard, unlike the iPhone. It has a superior UI than that of the iPhone and its Speed, when matched against the iPhone, is beyond ones expectations. I don't know if credit should be given to Sprint or the Pre, nevertheless, it downloads data much faster than the iPhone. Anyone hoping for Palm's demise must be out of his mind. Palm has truly made me a believer. My congratulations goes to all those that made this phone possible.

Jun 04 11:52 AM

[preexcited:]

No doubt Palm is competing against 2 entrenched competitors. But little tiny Palm even with a small bit of the smart phone share will be a success! Nothing wrong with that. Plus the reviews on the operating system are very very promising; it's clear there will be more products developed around the Web OS. GO Palm! Nice to see innovation, risk taking, and competition. Why not try out the phone, you're going to find out why the buzz is getting louder...

Jun 04 12:12 PM

[Hayweed:]

I doubt that Palm will get many iPhone people to switch to the Pre as you would lose all your apps. I think that where Pre may do damage is to Rimm which makes the Storm look even worse.

The swap out battery issue is such a joke. On the iPhone you buy a battery extender $50 which is quite small that you plug into the bottom of the phone which charges the phone while you use it. Just plug it in when you need it. Best part, no need to shut the phone down to replace a battery which is what you have to do with the Palm or a blackberry. So what is better, If we are all watching a movie on a phone, with iPhone just plug in the battery extender which charges your phone while the movie continues. On Rimm and Palm, shut off the movie, cut off the phone, remove the dead battery and install the fresh battery and wait 2-3 minutes for the phone to restart and then reopen the movie, find where you were in the movie and hit play. That is ridiculous

Jun 04 12:48 PM

[CGP:]

JW, you frame your argument in such a narrow space (it would have helped if you had hands-on experience). Your bottom line seems to be they shoot to #1 or die, instant gratification only?; isn't there room for this story to play out over a couple of years?

My key takeaways so far are:
1) Pre's competitive and not a disaster
2) WebOS - there's a pathway for future success beyond Pre
3) It's named in the same space as AAPL & RIMM (we're talking about getting 1% share of 269 million units sold worldwide, without having to take share from AAPL or RIMM; ok maybe Nokia)

Jun 04 01:05 PM

[Stop Paying...:]

Tech journalists are in a fawning heat, trying to out-fawn each other about this piece of crap.

They are even too damn stupid to wait to compare this joke to the iPhone that will be announced next week. These jackals are required to write in a way that gets read or lose their clickwhore job.

Jun 04 02:09 PM

[User 19004:]

How was it that you were able to use this phone? I assume you must have in order to give it such perfect reviews.


On Jun 04 11:52 AM Aryamehr wrote:

> If you are skeptical I suggest you use the phone before you make
> any disparaging remarks. This phone will impress anyone who can
> put their partiality aside, it is just the best! Until you can find
> me a human without flaws I suggest you come down to earth and accept
> near perfection, because this phone is as close to near perfection
> as possible, considering the current technologies available. What
> impressed me the most is its ability to simultaneously have 7 of
> my applications open and running at the same time, unlike the iPhone.
> Yes it is energy consuming, however Palm gave us the option to change
> the battery if need be, unlike the iPhone. It has a decent qwerty
> keyboard, unlike the iPhone. It has a superior UI than that of the
> iPhone and its Speed, when matched against the iPhone, is beyond
> ones expectations. I don't know if credit should be given to Sprint
> or the Pre, nevertheless, it downloads data much faster than the
> iPhone. Anyone hoping for Palm's demise must be out of his mind.
> Palm has truly made me a believer. My congratulations goes to all
> those that made this phone possible.

Jun 04 03:50 PM

[Geddy:]

He works for Sprextel...


On Jun 04 03:50 PM User 19004 wrote:

> How was it that you were able to use this phone? I assume you must
> have in order to give it such perfect reviews.

Jun 04 06:19 PM

[Hayweed:]

Anyone see the demo on the Thestreeet.com today on the Pre. The guy went to cut on Pandora and it took so long he said you can change to the web to read a page while you wait for the program to load in order to be more productive. LOL

On another demo on another site a guy using the Pre was showing synergy and accidentally dialed a person's number and it took him almost 15 seconds to cancel the call and get back to where he used to be which is pretty laughable as well.

Jun 05 12:05 AM

[mollytjm:]

actually, you can get battery extenders for $10 on the web and they take about a second to plug in. it's nice that there's competition because that should make for better innovation... but the top dog on innovation is Apple and the main reason is that they innovate so quickly. no one else can innovate that fast. So no matter what the Pre is actually like to use, there will be no reason for iPhone users to switch carriers to use it when they know perfectly well that, if they wait a nanosecond, Apple will have something better.
Rim might not do as well unless it learns how to innovate more quickly.
As to having other applications open..i think Apple will do that when they can figure out how to do it in a speedy way. Apple product users are use to fast responses within the Apple OS. People who are use to dealing with slower, glitchy pcs might find a slow system tolerable...Mac users won't.

Jun 05 08:38 AM

[Tom B:]

The lack of a SDK or real (non-webOS) apps for the Pre pretty much dooms it.

Jun 05 08:58 AM

[SA Editor M...:]

To make sense of some of the comments: The headline Seeking Alpha had originally put on this post was "Preview of Palm's Pre: More than a Little Skeptical." It did not correctly reflect the author's intent and has been changed, with our apologies to Joel West.

Jun 05 09:47 AM

[brewer:]

I think the only people that will buy the Pre are either stuck on Sprint or are rabid Apple haters. Some of the PC fanboys are so jealous of Apple and all their success. Some others might buy it because of the fixed, limited, but 'touchable' little slide-out keyboard.

Apple got it ALL right before anyone else did. That includes the GUI, the iPod, the iTunes store, and the App Store, and no amount of raving about Xerox Parc (who would be a footnote in history had Apple not essentially discovered them) or earlier, hideous 'MP3 players' lessens in any what what Apple has brought to the computing landscape.

Obviously this is only my opinion. The Pre could be a huge success, it's possible. But I think, in this case, the deck is stacked in Apple's favor. Apple WORKS HARD to get all this stuff right. Sure, it might make you all aflutter to think, 'Gee, I have seven programs running at once, count 'em, SEVEN!' but the truth is it's much more important to be able to move about quickly and easily. iPhone/iPod touch are SNAPPY devices. No waiting and waiting for things to load/cancel/etc... and the average, normal person isn't going to get all geeked out about multitasking. When you can switch in and out of programs smoothy, who needs it? It's not like a desktop where you could be doing some task like rendering a video, etc... and need multitasking to do something else. Besides, the iPhone does multitask, they just don't open that up to any program that wants it, it's reserved for the primary functions of the phone such as playing MP3s and taking calls.

If Apple can get their notification system working well (it could remain a difficult issue) that will do a great deal to obviate any need for multitasking. Just being able to take calls in Skype on an iPod would be fantastic. Right now, you'd have to run the app all the time for that to be feasible.

Jun 05 09:58 AM

[IMO:]

calling Sprint the "low cost provider" doesn't do justice to what Sprint offers. Sprint simplified it and provided unlimited bundled options (messaging and data) so customers get an incredible amount of VALUE from their plans. For $99 VZ gives you unlimited calling ... AT&T plans for iphone will run you at least $130/month and don't include unlimited text msg'ing (although maybe they are addressing to throw in msg'ing into their $30 iphone add-on). Sprint gives you unlimited calling, msg'ing (text, pic and video) and unlimited web access including gps and TV for $99. if you're not a talker and need fewer voice minutes you can get all of the above with 450 min for $70.
iphone users and apple fans need to calm down and be okay with the fact that innovation from a range of manufacturers and developers is a good thing.

Jun 05 10:54 AM

[brewer:]

@ User 426264

Innovation from other companies would be GREAT, but we aren't seeing innovation. We are seeing a company basically come in and change the curtains, then call it 'innovation' ala Microsoft.

Your prices for iPhone service are way off the mark. And it's just stupid to have full internet and not do your messaging off the (unlimited) internet rather than paying extra for the privilege of doing it directly through your phone company. With unlimited internet ($69, rumored to go lower very soon) you have unlimited messaging, photo sharing, skype, etc...) Buy the iPod touch, you get all this with just a wifi hotspot.

Jun 05 11:01 AM

[martyg:]

i still can't get reliable telephone connections in nyc on a sprint phone. everything else offered from pre is on an "if come basis." as lacking as att is as a service, it is light years better than sprint. verizon is still the best for phone connections.

apple has about 30 billion reasons to stay ahead of the pack. sprint / palm is still on line at the soup kitchen.

Jun 05 11:49 AM

[IMO:]

innovation = new or different so given that Pre can run multiple apps at once and synergize contacts, etc ... iphone can't do either ... while not revolutionary and a logical next step it is still innovation for the category. they could have done what samsung did with the instinct or what RIM did w/the bb storm. wouldn't call either of those innovative.
apple fans have a short memory about the history of apple ... they were on top and then fell hard. palm did the same thing ... created the market and then rested on their laurels. they're just trying to crawl out of their hole just like apple did.


On Jun 05 11:01 AM brewer wrote:

> @ User 426264
>
> Innovation from other companies would be GREAT, but we aren't seeing
> innovation. We are seeing a company basically come in and change
> the curtains, then call it 'innovation' ala Microsoft.
>
> Your prices for iPhone service are way off the mark. And it's just
> stupid to have full internet and not do your messaging off the (unlimited)
> internet rather than paying extra for the privilege of doing it directly
> through your phone company. With unlimited internet ($69, rumored
> to go lower very soon) you have unlimited messaging, photo sharing,
> skype, etc...) Buy the iPod touch, you get all this with just a wifi
> hotspot.

Jun 05 12:14 PM