Palm vs. Apple vs. RIM: The Mobile OS Wars Heat Up 16 comments
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The Palm Pre (PALM) launch is right around the corner, along with Apple's (AAPL) WWDC next week and a lot of people are wondering how this will impact the market dynamics in the handheld wars. The last time Palm innovated was around the time it acquired Handspring. This is its first innovative product in years-- will this save Palm?
I think this device puts Palm back in the race and while the Pre looks fantastic, this device launch alone is not enough to turn Palm into a contender again without a few more devices to round out the Pre family. Most importantly, it has shown that Palm can innovate again which is a fact that's been in dispute for this former market leader. People forget Palm defined this category and they have not had an interesting and innovative product since the Handspring acquisition. My bet though is it gets them enough runway to yet engineer a nice exit to Dell (DELL) or some other acquirer.
If they can have a successful launch, then launch an OLED version of this thing with a 4+ size inch screen for more of a media device they could generate some interesting market share gains. I think that's enough for Palm's private equity investors to declare victory and walk off into the sunset as happy innovators.
A lot of reviewers including Mossberg paint this as a challenger to iPhone and given the lead designer came straight out of Apple a lot of these comparisons hold true. However, I think this device has implications for Rimm (RIMM) as well. This device will be on every carrier starting Q1 2010 and folks who have wanted an iPhone and not wanted to switch to AT&T (T) will pick this device instead of another Blackberry. Most people hate AT&T's network and why switch when you can get most of the functionality of the iPhone without having to move networks?
Just a quick word about Rimm. I think this continues a longer term decline for Rimm in terms of its advantages in the marketplace and its relative value proposition. A keyboard version of the iPhone which essentially the Pre is, only accentuates this trend. Interesting post on BlindReason here a year or so ago that shows how the OS market has changed so quickly.
Palm Pre on multiple carriers also makes it a lot more important for Apple to either push out a CDMA version of its phone and drop AT&T exclusivity (which Apple doesn't want to do because of a small hit to margins by producing more versions of the phone) and/or to get LTE networks up and running in the United States. LTE plans look to be increasing for all the carriers but the current forecast is more for late 2010 or early 2011.
The Mossberg review on the Pre is out here and it is pretty compelling. I think it's great to have Palm out with a device that goes toe to toe with Apple. Apple has been just way too lazy in terms of innovation and this might put a little more competitive intensity into the pace of innovation (and probably an Apple lawsuit).
The device we are going to get at WWDC next week is more than likely going to be just one more semi boring iteration from Apple as it rides an innovative way that is impressive but a few years years old now. Video Chat is interesting and I am sure Apple will implement it in an excellent fashion but they are just putting enough gas on the pedal to stay ahead of the pack, rather than trying to push the envelope some true innovation. The introduction of the compass should make the location based applications a lot more interesting as well.
Unless I have been completely tricked by false rumors coming out of Asia, we are not going to get an OLED screen out of Apple which would be a boon to battery life and make the screen absolutely beautiful. This is another example of Apple just milking 3 year old innovation rather than truly pulling ahead of the pack. The general consensus is that Apple will have multiple versions of the iPhone and there is a possibility we may get a a high end OLED version either now or at a later date in the year (which would break their pattern of annual product announcements).
If you were hoping that you'd get a keyboard version of the iPhone next week, most (if not all) sources conclude there won't be one and you'd have better luck hoping for peace in the Middle East or for North Korea to give up its nuclear weapons and sing Kum Ba Ya.
A lot of people are really going to love the keyboard on the Pre even if it is a little tiny for most fingers and somewhat inferior to Rimm keys. If they can launch a media Pre I think they can tempt a lot more iPhone users to switch. What would a "Media Pre" look like? They need to get the screen size and resolution up while still maintaining battery life. I think they can do a lot of that with an OLED screen at a slightly higher price point.
There's been some stories about the inside Apple battles over whether to include a keyboard and that the designer who pushed hard for a keyboard left for Palm giving us essentially an iPhone his way. Now that we have seen the Pre, it sort of feels like we've got that. It also accelerates the view that there are likely going to be some litigation between the two companies around who owns what.
Internet browsing on the Pre is much faster than the iPhone and I think that's a function of Sprint's (S) network just being much faster as well as the faster processor inside the Pre which contributes quite a bit to page load time. I know AT&T advertises the fastest network but it just plain isn't and I wish Sprint would push its own data capabilities more in the marketplace.
Sprint is a perfect example of a fantastically engineered network with really horrible marketing and leadership. They have suffered substantially from the lack of interesting devices on the CDMA side the last few years however which is being ameliorated somewhat of late. They have had a faster network now for 4 years and get a bad rap. Every day I don't see some enterprising class action lawyer suing AT&T for its ridiculous claims about its horrible network in Manhattan and San Francisco is a day I awake surprised.
On the downside, you have to remember if you are on a CDMA network you are not going to be able to do data and a phone call at the same time which most reviewers don't mention. My own gut on which device is better depends on what you use your device for. If you do a lot of email and need that keyboard input or if you want to be able to multitask, the Palm Pre is going to be a better choice for you. Right now though, I think iPhone has the advantage for video type media because the screen is larger. Additionally, my gut is the compass is going to make location based applications a lot more interesting on the iPhone than the Pre.
Mossberg made a big deal about the advantage of the iPhone App store. It is a bit of an issue for a lot of people who have grown dependent on one or two key apps. For me, I use email, internet browsing on the go and location based services--the rest of the apps, I can survive without for a bit.
The biggest conclusion for me out of this is that if the Pre gets some share as I expect that it will, Apple absolutely positively has to drop that exclusivity deal with AT&T. They have reached diminishing marginal returns in terms of their ability to force covert people over to AT&T and in order to maintain product growth the math basically forces them to distribute to a wider base. Math is now starting to work against Apple and the AT&T deal has to go.
Here is a piece of the Mossberg review:
I consider the Pre to be potentially the strongest rival to the iPhone to date, provided it attracts lots of third-party apps, which it sorely lacks at launch. Its design is much better than that of the two other main iPhone-class competitors: the T-Mobile G1, which uses Android, and RIM’s touch-screen BlackBerry Storm.
Whether the Pre is better than the iPhone depends on your personal preferences, though I’d note that the new iPhone to be unveiled next week will have lots of added features that could alter those calculations.
The Pre’s biggest advantage over the iPhone is that, in addition to sporting an elegant touch-screen interface that matches or exceeds Apple’s, the new Palm device has a real physical keyboard that slides out from its curved body. While I like the iPhone’s virtual on-screen keyboard, others hate it, and yearn for a device with both a great touch interface and a physical keyboard. The Pre delivers.
Many other iPhone wannabes have physical keyboards, including the G1. But none combine that keyboard with the stylish software of the Pre and its beautiful industrial design, which makes the new Palm feel great in the hand. The phone is relatively small — though pretty thick — and has a gently curved back.
The Pre also features an elegant new take on the multitouch user interface. It uses a card metaphor. Each program, or window, appears in virtual cards on the screen, and you can flip through them and zoom in to use one, or quickly dismiss one by flicking it up and off the screen. An individual email, or contact, can occupy its own card. And, unlike on the iPhone, the Pre can simultaneously run any programs you choose.
Also, some gestures — like a quick sideways swipe to go to the previous screen — are performed in a black area below the display, which also has a button that zooms in and out of card view.
The other big, new idea in this phone is called Synergy. It automatically can merge similar contacts from disparate sources, like Google and Facebook, and can display multiple calendars from different sources as well.
Palm stresses wireless capability. It automatically syncs over the air with Google’s calendar and contacts, and with Microsoft Exchange. This worked pretty well in my tests, though syncing some items wasn’t instant. It also can connect with numerous email services and performs BlackBerry-style push email.
Going further, the Pre features a wireless backup service that automatically stores a copy of your data — email, contacts and calendar — on remote servers, so you can recover your stuff if need be.
For syncing big files, like photos, videos and music, Palm has taken an audacious approach: It simply uses its rival’s software, Apple’s iTunes. The Pre team, headed by a former top engineer at Apple, figured how to make iTunes think a Pre is an iPhone or iPod, and the software acts accordingly. Of course, Apple can alter iTunes to block this, but in my tests, it worked perfectly.
All things D also has a nice roundup of all the Gadgety Reviews here.
Disclosure: I am long Apple calls, AT&T common and Sprint common.
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It's amazing that companies with so much going for them can manage to waste time sitting around congratulating themselves. This might work in designer sheets, but not in tech. I hope Apple never gets to the point where it does this!
All the features (besides the keyboard and multitasking every application) are nothing new. e.g. iPhone does push email, outlook syncing, etc... and of course will do and continue to work with iTunes far better than the pre will. And the pre really has no application base as of yet. If they manage to sell them, then that will probably improve.
Sprint had two issues that needed to be resolved after its merger with Nextel. The first was Customer Service and the second was a quality smart phone that could emulate the iPhone or Storm. Since the inception of the new management team in Q1 of 2008 Sprint has executed with precision, under the auspices of their new CEO, Dan Hesse. Every survey in the nation will manifest that their customer service has improved drastically. In some areas they have even won the title of having the best Customer Service. The second issue was their ability to offer quality Smart phones, that has also been taken care of with the launch of numerous Blackberries, the impending launch of the Pre and a slew of new phones that are due this summer from Motorola and numerous Asian manufacturers with Android based OS's. Now couple this with the organic restructuring that will manifest additions to their Cash balances ($4.5 Billion) and reduction in liabilities. What few of us know is that Sprint is also in possession of a much coveted wireless Spectrum of licenses that are worth $10's of billions. Sprint also has reinvigorated its Boost Mobile subsidary, which is unequivocally the best nationwide Pre-Paid service in the nation. Last quarter they had close to 800,000 net subscriber additions to their service and it appears that this pace of growth will continue through Q2, 2009. With the launch of the Pre on its 4G network Sprint will definately have an advantage over its rivals, however it will be interesting to see how Dan Hesse and company leverage this advantage while restructuring the company. To date they have done well to beat earnings estimates 80% of the time since Mr. Hesse took the helm in Q1 2008. Last quarter they beat estimates by 8 cents, while lowering their debt by $600 million and adding $800 million in free cash flow to their balances, which was substantially better than the estimates.
Yesterday I was fortunate to be able to use my friends Pre on Sprints network. Well, all I can say it went far beyond my expectations. What I also liked about the phone was its size, it fits into the palm of your hand as though it was an integral part it. On the morrow the public will get their chance to see that the Pre is no hype but rather a phone that will unequivocally emulate the iPhone and put Sprint back on the right glide path.
On Jun 05 08:42 AM john1940 wrote:
> Pretty good summary. Competition will help this whole category of
> product. Next should be the carriers and contracts. The US is behind
> the rest of the world on carrier speed and functions. I am surprised
> none of the reviewers mention that the current application developers
> now have a new market. Properly executed, Pre should be able to
> attract the games and a lot of other applications in a short period
> of time.
You are a moron. AAPL INVENTED the present category of "Smart Phone" which in effect is a COMPLETE HAND HELD COMPUTER which happens to also make phone calls.
Ayuh
www.wealthalchemist.co.../
On Jun 05 10:40 AM Aryamehr wrote:
> The group to watch is Rubinstein and team. They are not only on par
> with Apple in the quality of engineers but their prescience IMHO
> is definately ahead of our time. I am glad you mention Sprint's network
> and how much faster it is from that of ATT's. I too have wondered
> how they get away advertizing that they have the fastest Network
> Speeds in the industry. Sprint's 3G network has proven itself over
> and over again that in most instances it is faster and more reliable,
> not to mention cheaper than that of ATT's. Now throw in their 4G
> platform and you will have difficulty seeing ATT anywhere but puckering
> their hind lips spinning about what they intend to do in the future
> with their LTE version of 4G. The industry pundits have responded
> that for ATT to have a ubiquitous 4G network earlier than 2012 would
> be a miracle.
> Sprint had two issues that needed to be resolved after its merger
> with Nextel. The first was Customer Service and the second was a
> quality smart phone that could emulate the iPhone or Storm. Since
> the inception of the new management team in Q1 of 2008 Sprint has
> executed with precision, under the auspices of their new CEO, Dan
> Hesse. Every survey in the nation will manifest that their customer
> service has improved drastically. In some areas they have even won
> the title of having the best Customer Service. The second issue was
> their ability to offer quality Smart phones, that has also been taken
> care of with the launch of numerous Blackberries, the impending launch
> of the Pre and a slew of new phones that are due this summer from
> Motorola and numerous Asian manufacturers with Android based OS's.
> Now couple this with the organic restructuring that will manifest
> additions to their Cash balances ($4.5 Billion) and reduction in
> liabilities. What few of us know is that Sprint is also in possession
> of a much coveted wireless Spectrum of licenses that are worth $10's
> of billions. Sprint also has reinvigorated its Boost Mobile subsidary,
> which is unequivocally the best nationwide Pre-Paid service in the
> nation. Last quarter they had close to 800,000 net subscriber additions
> to their service and it appears that this pace of growth will continue
> through Q2, 2009. With the launch of the Pre on its 4G network Sprint
> will definately have an advantage over its rivals, however it will
> be interesting to see how Dan Hesse and company leverage this advantage
> while restructuring the company. To date they have done well to beat
> earnings estimates 80% of the time since Mr. Hesse took the helm
> in Q1 2008. Last quarter they beat estimates by 8 cents, while lowering
> their debt by $600 million and adding $800 million in free cash flow
> to their balances, which was substantially better than the estimates.
>
> Yesterday I was fortunate to be able to use my friends Pre on Sprints
> network. Well, all I can say it went far beyond my expectations.
> What I also liked about the phone was its size, it fits into the
> palm of your hand as though it was an integral part it. On the morrow
> the public will get their chance to see that the Pre is no hype but
> rather a phone that will unequivocally emulate the iPhone and put
> Sprint back on the right glide path.
On Jun 05 10:40 AM Aryamehr wrote:
> The group to watch is Rubinstein and team. They are not only on par
> with Apple in the quality of engineers but their prescience IMHO
> is definately ahead of our time. I am glad you mention Sprint's network
> and how much faster it is from that of ATT's. I too have wondered
> how they get away advertizing that they have the fastest Network
> Speeds in the industry. Sprint's 3G network has proven itself over
> and over again that in most instances it is faster and more reliable,
> not to mention cheaper than that of ATT's. Now throw in their 4G
> platform and you will have difficulty seeing ATT anywhere but puckering
> their hind lips spinning about what they intend to do in the future
> with their LTE version of 4G. The industry pundits have responded
> that for ATT to have a ubiquitous 4G network earlier than 2012 would
> be a miracle.
> Sprint had two issues that needed to be resolved after its merger
> with Nextel. The first was Customer Service and the second was a
> quality smart phone that could emulate the iPhone or Storm. Since
> the inception of the new management team in Q1 of 2008 Sprint has
> executed with precision, under the auspices of their new CEO, Dan
> Hesse. Every survey in the nation will manifest that their customer
> service has improved drastically. In some areas they have even won
> the title of having the best Customer Service. The second issue was
> their ability to offer quality Smart phones, that has also been taken
> care of with the launch of numerous Blackberries, the impending launch
> of the Pre and a slew of new phones that are due this summer from
> Motorola and numerous Asian manufacturers with Android based OS's.
> Now couple this with the organic restructuring that will manifest
> additions to their Cash balances ($4.5 Billion) and reduction in
> liabilities. What few of us know is that Sprint is also in possession
> of a much coveted wireless Spectrum of licenses that are worth $10's
> of billions. Sprint also has reinvigorated its Boost Mobile subsidary,
> which is unequivocally the best nationwide Pre-Paid service in the
> nation. Last quarter they had close to 800,000 net subscriber additions
> to their service and it appears that this pace of growth will continue
> through Q2, 2009. With the launch of the Pre on its 4G network Sprint
> will definately have an advantage over its rivals, however it will
> be interesting to see how Dan Hesse and company leverage this advantage
> while restructuring the company. To date they have done well to beat
> earnings estimates 80% of the time since Mr. Hesse took the helm
> in Q1 2008. Last quarter they beat estimates by 8 cents, while lowering
> their debt by $600 million and adding $800 million in free cash flow
> to their balances, which was substantially better than the estimates.
>
> Yesterday I was fortunate to be able to use my friends Pre on Sprints
> network. Well, all I can say it went far beyond my expectations.
> What I also liked about the phone was its size, it fits into the
> palm of your hand as though it was an integral part it. On the morrow
> the public will get their chance to see that the Pre is no hype but
> rather a phone that will unequivocally emulate the iPhone and put
> Sprint back on the right glide path.
1) they look much better...all the stores have had 'makeovers' and they are pleasant places to shop and certainly as important the
staff has been upgraded and obviously increasingly trained....they know their stuff
2) the stores are more crowded ..i was always amazed for years about the crowds at VZ stores and the emptiness of sprint stores..that has definitely chnged in northern New Jersey.
3) i cannot comment on comparisons of the 3 major networks..always had sprint from mid 1990s....it has gotten better but I never noticed the failures that all would speak of and we continued with nestel push to talk for our trucking firm throughout the merger and all seemed to work fine for the most part
I am long both sprint and palm shares for the past few months ..for transparency purposes!! ;>)
Paarl of Rhodesia
On Jun 05 10:40 AM Aryamehr wrote:
> The group to watch is Rubinstein and team. They are not only on
> par with Apple in the quality of engineers but their prescience IMHO
> is definately ahead of our time. I am glad you mention Sprint's
> network and how much faster it is from that of ATT's. I too have
> wondered how they get away advertizing that they have the fastest
> Network Speeds in the industry. Sprint's 3G network has proven itself
> over and over again that in most instances it is faster and more
> reliable, not to mention cheaper than that of ATT's. Now throw in
> their 4G platform and you will have difficulty seeing ATT anywhere
> but puckering their hind lips spinning about what they intend to
> do in the future with their LTE version of 4G. The industry pundits
> have responded that for ATT to have a ubiquitous 4G network earlier
> than 2012 would be a miracle.
> Sprint had two issues that needed to be resolved after its merger
> with Nextel. The first was Customer Service and the second was a
> quality smart phone that could emulate the iPhone or Storm. Since
> the inception of the new management team in Q1 of 2008 Sprint has
> executed with precision, under the auspices of their new CEO, Dan
> Hesse. Every survey in the nation will manifest that their customer
> service has improved drastically. In some areas they have even won
> the title of having the best Customer Service. The second issue
> was their ability to offer quality Smart phones, that has also been
> taken care of with the launch of numerous Blackberries, the impending
> launch of the Pre and a slew of new phones that are due this summer
> from Motorola and numerous Asian manufacturers with Android based
> OS's. Now couple this with the organic restructuring that will manifest
> additions to their Cash balances ($4.5 Billion) and reduction in
> liabilities. What few of us know is that Sprint is also in possession
> of a much coveted wireless Spectrum of licenses that are worth $10's
> of billions. Sprint also has reinvigorated its Boost Mobile subsidary,
> which is unequivocally the best nationwide Pre-Paid service in the
> nation. Last quarter they had close to 800,000 net subscriber additions
> to their service and it appears that this pace of growth will continue
> through Q2, 2009. With the launch of the Pre on its 4G network Sprint
> will definately have an advantage over its rivals, however it will
> be interesting to see how Dan Hesse and company leverage this advantage
> while restructuring the company. To date they have done well to
> beat earnings estimates 80% of the time since Mr. Hesse took the
> helm in Q1 2008. Last quarter they beat estimates by 8 cents, while
> lowering their debt by $600 million and adding $800 million in free
> cash flow to their balances, which was substantially better than
> the estimates.
> Yesterday I was fortunate to be able to use my friends Pre on Sprints
> network. Well, all I can say it went far beyond my expectations.
> What I also liked about the phone was its size, it fits into the
> palm of your hand as though it was an integral part it. On the morrow
> the public will get their chance to see that the Pre is no hype but
> rather a phone that will unequivocally emulate the iPhone and put
> Sprint back on the right glide path.