By Devin Coldewey
In a rather surprising move considering Verizon’s (NYSE:VZ) lack of compelling handsets, the nation’s biggest wireless carrier has decided it’s going to pass on the Palm Pre, if reports are to be believed. This is a serious blow to Palm’s (PALM) aspirations, and their stock took a 5% hit as if to rubber-stamp it. Although the team here is divided over Palm’s new efforts (and advertising strategy), I think we were all secretly rooting for Palm just a bit. After all, WebOS is impressive and the Pre and Pixi are solid little devices — but Verizon doesn’t think so, or at least not anymore.
Nobody can deny that sales have been underwhelming — half a million is about where I’d place them, which is no way to launch a giant-killer. That’s Verizon’s first complaint, and you can’t really blame them. Okay, strike one.
Verizon is also revamping its VCast system and launching its own app store. I’m of the opinion that this store will be a piece of garbage, but I’d understand if they don’t share my outlook. And garbage or not, it’d still be in conflict with Palm’s own app store. Steeerike two.
Lastly, it seems like the true sleeper phone is awakening, and Verizon wants to get on board before that ship sails — instead of being late to the party like it’s been with, you know, everything else. The CLIQ is an interesting phone, and Motorola (MOT) is a proven partner. And they too know the sting of being hopelessly out of date. It kind of reminds me of Grumpy Old Men, except in this case the crusty invalids are major corporations, joining forces to rejuvenate their sagging sales. I smell a remake! Strike three, and a foul on me for making that reference.
One reason not mentioned: Could Verizon be secretly waiting on the iPhone? It’s a fun thought, but I’d say no way. AT&T has barely been able to cope with the strain of a network full of iPhones, and Verizon would probably break. It’s also an expensive move, and Verizon’s always been about selling medium-sized services to cheap phones. That may have to change, but they’ll ramp up before they go all out.
What this means for Palm will be determined by how they roll with it, and whether they’ve got anything else up their collective sleeve. It’s certainly not good news, in fact I’d say it’s probably the worst news possible short of a meteor striking Palm’s HQ, but don’t go picking out a coffin just yet.