Palm Gets Personal With New Consumer-Oriented Smartphone

| About: Palm, Inc. (PALM)
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Last week Palm (PALM) announced a new consumer-oriented smartphone device called the Centro. Palm CEO Ed Colligan said,:

[The Centro] is meant to be the center of your life, both your business and personal life. We’re trying to reach a new demographic.

While Palm has been traditionally strong in the business-user market, they have been criticized for not “keeping up” in the consumer space. Recent Compete analysis shows that releasing the Centro may be a very positive step for Palm as consumers are definitely interested in smartphones for personal use.

Compete surveyed 235 smartphone owners about how they use their smartphone with regards to their work and personal lives.

These data suggest that while work considerations are important factors, personal considerations are more important factors in driving smartphone purchases and usage. 83% of consumers said they use their smartphones for personal reasons in some form or another. 71% of consumers told us that they have a smartphone to stay organized in their personal life versus 46% to stay connected to work (respondents could choose both). Given that until now most smartphone makers have primarily focused on the business-user segment, these are surprising results. They also tend to hold true when comparing across mobile operating systems.

In this chart, only Research in Motion's (RIMM) Blackberry users had a higher percentage of respondents that purchased their smartphone to stay connected to work than to stay organized in their personal life (37% and 31%, respectively). While that particular finding may not come as a surprise, what is surprising is that more Palm and Windows Mobile users said that organizing their personal life impacted their decision versus staying connected with work. This is especially true for Palm, which had the largest differences between the two categories (63% personal, 10% work). A significant portion of respondents thought both were important but, except in RIM’s case, personal considerations won the majority of mindshare.

The Centro is a clear shift from Palm’s current smartphone strategy, but seems to be well aligned with the interests of the Centro’s target demographic. Looking at the current portfolio of smartphones on the market today, Palm may be seen as taking a big risk with the Centro. But if it pays off, Palm could be soon leading the way for others to begin catering to this segment (Apple (NASDAQ:AAPL)deserves some credit for this as well) and could cement themselves as a consumer-focused, not just business-focused, smartphone player.