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Can Palm Pre Steal iPhone, BlackBerry Thunder?

Latest ChangeWave Research Consumer Smartphone Survey Suggests Palm Pre Faces “Obstacles” But Also Great Opportunity

   Palm-Pre-ChangeWave-01

While Palm’s position at the top of the smartphone heap back in June 2006 (chart above) stands as a reminder of how good the company and its devices once were there is no doubt that its current 8% market share illustrates just how low it sunk over the past three years compared to competitors such as Apple and BlackBerry that have continuously released better devices and increased their own market shares of a constantly growing smartphone market.

   Palm-Pre-ChangeWave-02

However, a recent Consumer Smartphone Survey of 4,292 cell phone owners conducted by ChangeWave Research reveals that the Pre has generated significant new consumer interest in Palm devices with the number of future smartphone buyers selecting Palm increasing by 400% between Dec. ‘08 and Mar. ‘09 thanks to the Palm Pre announcement while interest in BlackBerry declined somewhat and Apple remained equal.

   Palm-Pre-ChangeWave-03

Having said this, the number of consumers who said they were Very or Somewhat Likely to purchase the Palm Pre (1% and 4% respectively) was considerably lower than similar responses for BlackBerry Bold (17%) and Original iPhone (16%) before their releases – perhaps an indication that the Sprint/Palm marketing machine has not yet properly started and that work remains to be done raising awareness of the Pre in the market.

ChangeWave research director Paul Carton however also points out that “while early interest for the Palm Pre is less impressive than the early interest for the Bold or the iPhone, considering the enormous struggles Palm has had in recent years, the Palm Pre appears likely to breathe life back into the company if the new model performs even close to expectations."

Clearly though Palm will need to overcome some serious obstacles including outperforming two very robust competitors (Apple & RIM) as well as overcoming widespread negative perceptions about the company’s most recent product portfolio and the exclusivity for the first 6 months with Sprint.

         Palm-Pre-ChangeWave-04

Currently, the iPhone tops the satisfaction league (chart above) with a staggering 79% rate while RIM is second with 50% and Palm a distant seventh with only 31%.  Additionally, ChangeWave found that 21 percent of respondents are likely to buy an Apple iPhone 3G in the future.

Sprint’s Palm Pre exclusivity also appears not to be ideal.  Leaving aside the fact that switching carriers just to have access to a particular smartphone always polls badly, the fact is that Sprint lags in carrier market share with just 10% of the US market compared to 31% for AT&T and 30% for Verizon so the immediate potential of the Pre will be more limited than those of other exclusive smarphones such as the iPhone (AT&T) and BlackBerry Storm (Verizon).

Overall though I think that it’s extremely difficult to predict the future performance of a “revolutionary” device such as the Palm Pre compared to just an “evolutionary” device.  There’s no doubt that the Pre has some serious obstacles to overcome but there’s equally no doubt that the Pre will offer one of the most innovative smartphone solutions on the market when it is released in May/June so we could all be in for a very pleasant surprise...

For more information: ChangeWave Research

Preonauts are always revolutionaries


Posted by Andrew on April 9, 2009 at 12:12 PM

Palm Pre

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Comments

1
by Joe | Apr 9, 2009 1:52:00 PM

Why do you call the Pre "revolutionary"? It certainly has promise of being a good device with nice features, but it seems like most if not all of its headline features already exist on one or another mobile device. It might be a revolutionary product as compared to the legacy Palm lineup, but not as compared to the state of the art in the overall mobile devices biz.

2
by proee | Apr 9, 2009 2:44:50 PM

Palm will fail because they are a year late to the game. Sure the Pre will get some users, but it was needed one year ago in order to compete against the latest generation of phones.

Let's not forget that Apple is rumored to release a new iPhone come June. In fact, maybe they will release it shortly after the Pre in an effort to "deflate" whatever bubble they might have.

Also, Apple has 15k+ application and a thriving developer community that has an amazing growth chart. I'd say it will take years to even come close to matching that on the Pre, and I'm sure Apple has plans to expand the store onto even more portable devices.

I'm not an Apple fan by any means, I'm still pushing my Treo700P waiting for the right time to upgrade. But let's be realistic here folks, Apple is attacking the smartphone market just like it did with the MP3 player market.

It's a brutal world out there... So fun to sit back and watch the show!

3
by serge | Apr 9, 2009 3:03:22 PM

In a world of immediacy you seem very optimistic about the patience of customers, reagarding the Palm Pré. When Apple speaks it delivers the stuff right away. Almost no delay. So the strategy of desire is to make the dream an immediate reality. Palm seems to ignore this basic fact of marketing and publicity. The price to pay might again become too high.

4
by dgarts | Apr 9, 2009 4:59:15 PM

While I'm really disappointed with so much to do with Palm these days, I must mention that the concept of a survey of "customer satisfaction" can be skewed by the level of expectation of the consumer.

For example, if the average user of phoneA isn't looking for certain features, they won't be unhappy if phoneA doesn't have the features; if, however, the average user of phoneB is more demanding and phoneB has more features to meet that demand, any glitch in functionality will register highly as something to be unsatisfied about.

So now, if, for example, the average iPod user gets an iPhone basically to replace an iPod and some other cell phone so they are juggling one less device, they may not be concerned about whether iPhone has copy/paste or an expansion slot. Meanwhile, a "PDA power user" on a Treo is fine with copy and paste, loves being able to swap SD cards in and out, but is not happy when the SD card pops out of its slot while standing at the bus stop.

Another issue is concurrent versions. Of course satisfaction with an OS that is many years old will not be as high as with a newer OS. Palm OS5 (which would represent the majority of those surveyed since webOS isn't even available yet) is still limping along with Bluetooth 1.2, has neither A2DP or wi-fi built in, and just looks tired beside the latest newest hottest gadgets.

I'm sure people are raving about their brand-spanking new Blackberry Storm, but have you actually typed or tried to navigate it to actually DO something more than just look pretty? Bleck.

5
by q | Apr 9, 2009 6:09:48 PM

As much as I want Palm to succeed, I have to agree with the previous post. With a new Iphone due out and 3.0 in beta, it will be close to impossible to compete against the Apple name even if your device is better, as I feel the pre is. I use apple products, but for what I need to do I know the pre is a much better fit than the Iphone, I pray more consumers feel the same.

6
by PalmNut | Apr 10, 2009 4:59:43 PM

I have a friend who works in the Herndon, VA Sprint Office. He told me today that he has been in a lot of meetings lately about the Pre. He said he thought the release date is April 19th and that there will be a ton of incentives to buy! I don't think the 19th is realistic as it's just a week away and on a Sunday, but it does give me encouragement that the release date may be very soon. I hope so!

7
by AJohnson | Apr 11, 2009 1:02:17 PM

While I'm excited about the Palm Pre, I'm simply not switching to Sprint. Also, I'm as big a Palm fan as any, but any buzz I had has come pretty close to being faded.

I think the Pre is better than the current generation iPhone, but the iPhone has waaay more momentum, and lord only knows what Apple is going to roll out this next generation. I just know that they are not going to let Palm steal their thunder without a fight.

8
by Over 1 Billion Served | Apr 12, 2009 11:43:36 AM

Apple iPhone contest for one billion app downloads.


But if you still want to believe Palm's lying executives after all these years, have fun!

9
by Targon | Apr 12, 2009 12:36:33 PM

Momentum means very little in a world where people buy the best product available for the cost they are willing to spend. Yes, much of the hype will be gone by the time the Pre is finally available from Sprint, but people currently with Sprint and who are in the market for a new phone may go with the Pre.

At the same time, when AT&T can finally release their version of the Pre, a new marketing campaign will be needed to remind people why the Pre is a great phone. That is the real down side to their announcement being so far ahead of availability. You have to figure that 3rd party app support will need some development time though, and most companies don't bother writing apps for a phone that hasn't been officially announced.

The iPhone may remain a great toy for the younger crowd, but how well it works as a cross between a business device and a personal device is the real issue for me and others. Yes, it can do a lot, and there are many applications available, but I don't care for the feel of the iPhone. Give me a real keyboard, and a solid address book any day, and the phone app had better not be a piece of garbage(iPhone as a phone is pretty weak).

10
by bobo | Apr 12, 2009 9:17:56 PM

Its hard to predict consumer trends like this.

But as a long time Palm user and apple hater

With no release date or price anywhere on the horizon for the Pre

I am seriously considering an Iphone

11
by neo | Apr 12, 2009 11:09:39 PM

All of us treonauts here seem to have a place in our hearts for Palm - unless you are a troll. However, the place in our hearts is akin to that of a good friend who keeps making bad decision in life (maybe drinks too much, unreliable in commitments, etc.). The light is dimming and we hope the Palm brand still has some sort of future.

The glory of Palm through my eyes was the release of the Treo600. That baby was the first real smartphone that has some serious curb appeal. From that point onward, the life of Palm has been a slow murky sludge or a company. All the new phones seemed to be just variations of the treo600 - a little better screen, or maybe a few more wistles, but still the same dang candybar phone with keyboard.

In my mind, Palm had the perfect chance to make the next revolutionary product around the time when they were rumored to be releasing the Nova OS. Instead they made the choice to get in bed with Microsoft and release some super loser products like the 700W. Freak that phone sucks! Seriously they should be ashamed running such a terrible mobile operating system.

But even worse, the poor consumers were taken for a long ride of confusion as the Palm executives decide to change the company name a few dozen times in an effort to rebrand itself. What a waste of resources, Palm needed to work on their OS not some sort of branding.

Well I enjoy reading all the comments on here and look forward to seeing if Palm can really make something happen with this next phone.

12
by HAL9000 | Apr 13, 2009 3:55:14 AM

I think the Palm Pre will be remembered as sort of the mobile analog of the Nextstep workstations; all this cool tech trapped in companies and markets (Sprint) that can't take advantage of it. Maybe Dell or someone like that will pick it up and actually run with it.

That said, Apple isn't some kind Digital Jesus. I'm typing this out on an iPod Touch - and I'm about ready to throw it at the wall with this "keyboard."

13
by Mike | Apr 13, 2009 4:38:06 PM

All I know is my unlocked Treo Pro is an AWESOME smartphone and the best Treo I have ever had (650 --> 700p --> 750 --> Pro).

With the procesor power and more than adequate RAM, My phone zips in and out of all apps and handles everything I need it to. (and I am running the full SPB software programs, Shell, Pocket Plus, Phoen SUite, Time, Imageer in addition to SLingPlayer Mobile, MRing, Skyfire, Google Maps, MagiKB Lite, MagiCall, Sirius WM5, and am hooked into my COmpanys Exchange server and Imap my Y! and Gmail).

Now granted, it does take a little user effort as I have made many Reg tweaks, etc., to make this phone lightening fast, but isn't that what we treonauts love to do? :)

Personally, I think if they had signed up AT&T to push out this phone back in August 2008 with a 2 yr. contract, Palm would be in MUCH better shape heading into this anticpated Palm Pre launch

14
by Dracunculus | Apr 13, 2009 5:42:28 PM

I waited and waited and waited (and...) for Palm to step up to the plate with a good phone/PDA device. My Tungsten E was limping along as was my Motorola V750. When the Motorola died I bit the bullet and bought an iPhone 3G. It was not perfect - it's only an OK phone - and I pined for a number of Palm apps that did not yet exist for the iPhone.

Well, nearly a year has passed virtually and there are iPhone apps which replace virtually everything I had on the Palm. Yes, there are significant things which irritate me about the iPhone but on balance it is too late for me and Palm: I'm very committed app-wise to the iPhone and basically, despite its warts, I like the iPhone.

I think that this applies as well to many other iPhone users who, had there existed an alternative 4-6 months ago, might have bailed to the Pre from the iPhone or chosen the Pre outright. I would have. But in the words of Carol King, "And it's too late, baby, now it's too late, though we really did try to make it"

The Pre is going to be too late.

15
by proee | Apr 13, 2009 8:23:40 PM

@Dracunculus,

Just curious what sort of warts are you finding on the iPhone. I'm wating for the Pre, but also curious what apple has up their sleeve this summer. How's the keyboard?

16
by Expalmuser | Apr 24, 2009 7:22:26 PM

To simply answer your question.... NO

17
by Treo 650 User | Apr 29, 2009 5:42:11 PM

I have continuously owned and operated a Palm product since 2000. That's what I call brand loyalty. That being said, my Treo 650 will be my last Palm product as soon as I switch to Blackberry in the next month or two.

Frankly, I am surprised Palm is still in business and I doubt it will be in business one year from now. Why would I buy a product from a company that I know is on the ropes? In fact, Palm would not even be here today had they not made the smart decision to aquire Handspring and their Treo just in the nick of time. Today, Palm is trying to climb out of a death spiral with a couple of good products that should have been introduced years ago.

Arrivederci, my friend.

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