Not in my wildest nightmares did I ever imagine such a spectacular flame-out that Palm has become. It is now officially at the level of watching the early contestants on American Idol.
It is somewhat like that old musicians joke:
Q: "How can you tell your lead singer is at your front door?"
A: "Easy. She doesn't know where she is. She doesn't know the words. She doesn't have the key, and she doesn't know when to come in."
.NET developers won't have much problem moving to WP7, it's the same language(s), the same developer tools, an SDK with pretty much the same capabilities that the full-fletched desktop versions. You'll be using Silverlight for the UI (similar to WPF on the desktop), the .NET compact framework for general programming (a scaled down, device targeted version of .NET), XNA (as in xbox gaming). And you have WCF (windows communication foundation) and (later) RIA Services for phone-server communication. I'm sure there will a SQL solution there too. Lastly, the .NET developer community is strong, and growing fast.
That's all well and good, but first they have to attract handset makers or the developers won't matter. Given the licensing costs, why would handset makers opt for MS's new mobile phone OS over Android? Android has a larger base of apps (since WP7S has none right now), a developer community that from all reports is, "strong, and growing fast," and it's free. If an Android phone costs the same as a WP7S phone to manufacture (and it's likely there won't be a big differential), every penny you pay for the OS cuts into your profit vs. an Android phone, making Android a more attractive option to handset makers, it would seem.
This will, I think, be an interesting, and important, battle to watch.
It really seems it was the early lack of SDK and early app support that really crippled it. There remained a halo of hope around the Pre for a solid 2-3 months post-release that after the early reports of hardware issues had slowed or at least been known to be present but not pervasive.
Maybe it would never have caught fire, but the delays in app development made the misteps and the introduction of "homebrewers" add to worries whether it would be a wise investment.
I suspect that much like Cingular, it was at the time easier to convince Sprint to help announce and champion the young Pre -something that Verizon has never been able to do convincingly until perhaps the Droid.
My take on the cause of Palm's Pre/Pixi sales failure:
1. Pre launched for $299 + MIR. Yes, the MIR was instant at BB and other retailers, but the bulk of the sales channel were Sprint stores. The Palm Pre was not worth more than other touchscreen smartphones (iPhones, Android phones, Blackberrys). They should have launched with at most $199, and to sweeten the deal, a $50 Sprint/Palm gift card. $179 would have been better, including a MIR gift card.
2. The minimum service plan was $70, the same as minimum plans on other carrier/smartphone combos. It offered more text/voice, but that doesn't mean much when voice minutes and number of texts really don't matter that much to the majority of customers. After a certain amount, you've addressed most everyone, and for those who need unlimited voice, they will be willing to pay for it. It's the data plan that was important and Sprint was no better than other carriers. To have a breakthrough phone product, you need breakthrough service deals. Palm should have convinced Sprint to sell a special $20/month 1 GB/month package.
Those are the two dominant factors. If they were able to pull off these two, I think 1m units/quarter would have been achievable.
Minor factors that lead to Palm's rather dramatic 6 months of inventory and guidance for a $150m March-May quarter:
1. Quality issues weakened the brand. This happened on both the Pre, the Pixi, and various WebOS versions. The brand was already weak. Getting a reputation for poor quality only made it worse and effectively delayed purchases and limited the number of new customers for Sprint.
2. Using an HTML/CSS/Javascript application platform instead of a compiled C-based language platform. Never ever trade performance for more "widely used" languages/frameworks. The idea was to use something that was easy and that a lot of developers knew. That's irrelevant to the success of the platform. It's user experience, and since they used an interpreted language throughout WebOS it has some nagging slowdowns and lags. It simply wasn't worth it. Developers will adjust to whatever the platform as long as the money flows. There's more to platform stuff, but I think Palm started wrong right off the bat.
3. The Pixi was a strategic error. They should have delivered a Pre Plus on Sprint/Verizon in Oct/Nov, and sold the old Pre for cheaper.
So what you're really saying is, Microsoft has finally developed a mobile OS which is fully buzzword compliant. The rubber really hits the road on your last item, which points out Microsoft's biggest hurdles. First, they've never been particularly good at UI design, and second, they will be relying on licensees to implement well in hardware. All things considered, I don't know why we'd assume that they've got a winner on their hands this time when that model hasn't been very successful for them in the past.
Win95 wasn't very good UI-wise either Still sold a few copies...
Actually, I think Apple will still reign, UI-wise. They know that it's not sufficient with a "cool" or "fancy" user interface. A certain "class", or "elegance" is needed in addition. I've always loved how Apple manages to bind apps and devices together, how exciting it can be to use Apple products. In the consumer/prosumer space, they may well continue to dominate.
On the other hand, Apple has never really bothered with business applications, too boring perhaps? But in this area, Microsoft has the skills, the enterprise contacts, the office suite, exchange, a portion of the server space. Now it has cloud computing (Azure) coming up.
Silverlight is best known as an alternative to Flash for adverts and streaming. But it's actually much more than that, and perfectly suited for business applications. In particular things like input validation, error handling, client-server communication. And it can be reused between desktop apps, web plug-ins, and the phone. This means possibilites of cost effective development.
I don't see WP7 as the same model that MS have had before. Frankly, Win Mobile was a mess, a hodgepodge of older Windows technologies, stylus, start button, combined with no real hardware plan. This time, there is a clear strategy of modern frameworks, cross-device possibilities, and the hardware is also better defined.
I admit I don't know a lot about hw licensing, but if MS manages to create a credible app store, and if there is enough enterprise software development on the platform (likely, in my opinion), we'll see more revenue generated for all parties involved.
That's all well and good, but first they have to attract handset makers or the developers won't matter. Given the licensing costs, why would handset makers opt for MS's new mobile phone OS over Android? Android has a larger base of apps (since WP7S has none right now), a developer community that from all reports is, "strong, and growing fast," and it's free. If an Android phone costs the same as a WP7S phone to manufacture (and it's likely there won't be a big differential), every penny you pay for the OS cuts into your profit vs. an Android phone, making Android a more attractive option to handset makers, it would seem.
This will, I think, be an interesting, and important, battle to watch.
Handset makers are already onboard, at least ASUS, Samsung and LG, others too. Of course, they may leave again if the platform underperforms. But it's so easy to move from modern .NET development on the desktop to the phone, so there WILL be a lot of apps initially for WP7, and handset makers will see a potential for a nice slice of the business phone market.
And after the recent events of Google vs. China, I'm sure some will be hedging their bets when it comes to selecting platform winners...
My first post was actually a reaction to the simplified AI article. I don't see any connection between Palm's poor performance, and what Microsoft will be facing with WP7. It's a totally different case, and deserves to be treated so.
And yes, this will be interesting battle. But the smartphone market is growing, and there may be several winners.
About Nokia and MS beeing just like palm... talk about "boyism".
If Nokia desires so, it starts bundling Symbian S60 in every low level phone and Maemo on the top ones... and then? All their phones will be "smart". How's that for a market share?
That would be irrelevant since their product would still be dire and their ASP would be even lower. It would only be a mask to their increasingly weak position.
I think Palm had a great product on their hands, but it was simply poorly executed. Product execution is where the juggernaugts like Nokia, Apple and Google have it singed, sealed and delivered.
I think Palm had a great product on their hands, but it was simply poorly executed. Product execution is where the juggernaugts like Nokia, Apple and Google have it singed, sealed and delivered.
No I mean like the way they've rolled out the vast majority of their products and services. When these companies announce something, the world stands up and pays attention.
Like the way Google rolled out Navigation Beta. Turned the cell phone industry upside-down (no more having to pay for VZ Nav equivalents). And you can definitely bet the stand-alone GPS companies took note.
I have a nuvi 760 and now it sits in my glove box.
That would be irrelevant since their product would still be dire and their ASP would be even lower. It would only be a mask to their increasingly weak position.
Undoubtedly, but if it is where the market is going, and market shares are used by everyone a "comparison value" to determine Expected Value of a brand...
And don't forget... Mobile operators know that voice is already a comoditty (I should know because I work in one). So if Nokia brings an entry level platform for facebook and e-mail in the form of a 50 usd telephone, even if it is in GPRS for low level consumption... I know where the operators are going to bet... and Nokia will still rule in the market in the years to come... with their dire product.
Quote:
Originally Posted by KenC
"most popular" and least profitable. Not the segment I'd like to be in.
Why least profitable? it all comes down to scale. Apple knows this already. If the market is growing there, at the other segments expense... sooner or later the scale effects of producing better phones for a larger market will compensate the diminishing scale effects of diminishing low-level markets.
Just get to the jumping point, and do it in an orderly fashion... just dont' get left behind!
So if Nokia brings an entry level platform for facebook and e-mail in the form of a 50 usd telephone, even if it is in GPRS for low level consumption... I know where the operators are going to bet...
Nokia are already moving in this direction. The majority of their handsets are web-enabled in some way - which means they can claim an enormous "market-share" of the smartphone space.
The problem for Nokia is these are little more than entry-level phones now. And they don't sell for significantly more then other entry level phones. There is very little profit to be had from such devices.
The profitable part of the mobile phone industry is the place where Apple is sitting. Combining high per-unit retail value, with large volume.
In this space, Nokia's competition is the N-Series phones. And year on year, the sales of the N-series are declining.
This is why the tiny Apple overtook the giant Nokia in terms of profitability.
You are right. But do not forget that Apple's R&D for this equipment (iphone namely SW) was vastly paid by the existing MAC lines and OS X Development cycle... and from now on, it has to pay for itself (it won't be hard, but its cost will be directly indexed, hence lower margins)
Worse. Everybody is waiting for the next big thing from Apple so Iphone 4.x must be something different, with higher cost of development, or it will have to lower the price because 3 years for a "version" is alot in this market... and even worse, Apple cannot capitalize it's 3GS offer on a sub 100usd market because they are very good equipments with a much higher cost of production... it would be dumping.
For Nokia low level phones, just take everything that was in a Nseries the year before (Hardware wise and softwarewise), put it in a plastic enclosure... and sell it for 100 usd: zero I&D, same fabrication processes, with lower level materials.
And concentrate on the newer models to compete at Iphone level.
Now here is where the problem exists... Symbian is by today standars a "low desire" operative System.
And Maemo suffers for the same problem SAAB and Volvo have...
it's design teams are from Sweden and other northern countries... where "clean lines and interface" mean straight orthogonal simple lines (just see their better known architects)... and todays user have grown fond of a more "natural" design. *
My two cents... I love Apple Iphone, albeit t's acusing it's age, specially on the colors of the screen... maybe some IPS novelty is coming, inline with the other products they have.
I Love PALM PRE WEB OS, as it is by far the best OS around astheticaly and out-of-the-box functonality wise.
I love Android for the freedom of choice (with XDA help)
I Love the new WM7 because I am really fed up with having a screen filled up with "icons" that do not stick to any visual guidelines... Android TOday screens, Iphone today screens are a mess...
I really like the MS approach...
And for the ones that complaint, the fact that the letters go out of the screen mean something... you have another screen on your right, with a fluid and continuous passage. It's the first time I see something like that with horizontal navigation... and Not "home screens with icons" placed side by side, or in a vertical list... that's already so Iphone 1.0 old.
*I love it... I really do, they have produced some of the best design pieces in the world. Alvar Aalto from Finland is one of my prefered designers in the world.
One other thing Microsoft has in their favor is students. I would bet a decent number of apps on apples app store are made by students or developers that graduated recently as a way to make some cash and demo their skills. As long as enough people buy the phone the choice of developing a wp7 or iPhone app will start to swing towards wp7 as it's the language most employers use. Any student with a brain at the moment does there disertation in .net as employers want .net. Will be the same with apps to.
Plus there's all the developers that really can't be bothered to learn the iPhone language but could quite easily build a silverlight app in a few minuets.
Comments
It is somewhat like that old musicians joke:
Q: "How can you tell your lead singer is at your front door?"
A: "Easy. She doesn't know where she is. She doesn't know the words. She doesn't have the key, and she doesn't know when to come in."
.NET developers won't have much problem moving to WP7, it's the same language(s), the same developer tools, an SDK with pretty much the same capabilities that the full-fletched desktop versions. You'll be using Silverlight for the UI (similar to WPF on the desktop), the .NET compact framework for general programming (a scaled down, device targeted version of .NET), XNA (as in xbox gaming). And you have WCF (windows communication foundation) and (later) RIA Services for phone-server communication. I'm sure there will a SQL solution there too. Lastly, the .NET developer community is strong, and growing fast.
That's all well and good, but first they have to attract handset makers or the developers won't matter. Given the licensing costs, why would handset makers opt for MS's new mobile phone OS over Android? Android has a larger base of apps (since WP7S has none right now), a developer community that from all reports is, "strong, and growing fast," and it's free. If an Android phone costs the same as a WP7S phone to manufacture (and it's likely there won't be a big differential), every penny you pay for the OS cuts into your profit vs. an Android phone, making Android a more attractive option to handset makers, it would seem.
This will, I think, be an interesting, and important, battle to watch.
Maybe it would never have caught fire, but the delays in app development made the misteps and the introduction of "homebrewers" add to worries whether it would be a wise investment.
I suspect that much like Cingular, it was at the time easier to convince Sprint to help announce and champion the young Pre -something that Verizon has never been able to do convincingly until perhaps the Droid.
1. Pre launched for $299 + MIR. Yes, the MIR was instant at BB and other retailers, but the bulk of the sales channel were Sprint stores. The Palm Pre was not worth more than other touchscreen smartphones (iPhones, Android phones, Blackberrys). They should have launched with at most $199, and to sweeten the deal, a $50 Sprint/Palm gift card. $179 would have been better, including a MIR gift card.
2. The minimum service plan was $70, the same as minimum plans on other carrier/smartphone combos. It offered more text/voice, but that doesn't mean much when voice minutes and number of texts really don't matter that much to the majority of customers. After a certain amount, you've addressed most everyone, and for those who need unlimited voice, they will be willing to pay for it. It's the data plan that was important and Sprint was no better than other carriers. To have a breakthrough phone product, you need breakthrough service deals. Palm should have convinced Sprint to sell a special $20/month 1 GB/month package.
Those are the two dominant factors. If they were able to pull off these two, I think 1m units/quarter would have been achievable.
Minor factors that lead to Palm's rather dramatic 6 months of inventory and guidance for a $150m March-May quarter:
1. Quality issues weakened the brand. This happened on both the Pre, the Pixi, and various WebOS versions. The brand was already weak. Getting a reputation for poor quality only made it worse and effectively delayed purchases and limited the number of new customers for Sprint.
2. Using an HTML/CSS/Javascript application platform instead of a compiled C-based language platform. Never ever trade performance for more "widely used" languages/frameworks. The idea was to use something that was easy and that a lot of developers knew. That's irrelevant to the success of the platform. It's user experience, and since they used an interpreted language throughout WebOS it has some nagging slowdowns and lags. It simply wasn't worth it. Developers will adjust to whatever the platform as long as the money flows. There's more to platform stuff, but I think Palm started wrong right off the bat.
3. The Pixi was a strategic error. They should have delivered a Pre Plus on Sprint/Verizon in Oct/Nov, and sold the old Pre for cheaper.
So what you're really saying is, Microsoft has finally developed a mobile OS which is fully buzzword compliant. The rubber really hits the road on your last item, which points out Microsoft's biggest hurdles. First, they've never been particularly good at UI design, and second, they will be relying on licensees to implement well in hardware. All things considered, I don't know why we'd assume that they've got a winner on their hands this time when that model hasn't been very successful for them in the past.
Win95 wasn't very good UI-wise either
Actually, I think Apple will still reign, UI-wise. They know that it's not sufficient with a "cool" or "fancy" user interface. A certain "class", or "elegance" is needed in addition. I've always loved how Apple manages to bind apps and devices together, how exciting it can be to use Apple products. In the consumer/prosumer space, they may well continue to dominate.
On the other hand, Apple has never really bothered with business applications, too boring perhaps? But in this area, Microsoft has the skills, the enterprise contacts, the office suite, exchange, a portion of the server space. Now it has cloud computing (Azure) coming up.
Silverlight is best known as an alternative to Flash for adverts and streaming. But it's actually much more than that, and perfectly suited for business applications. In particular things like input validation, error handling, client-server communication. And it can be reused between desktop apps, web plug-ins, and the phone. This means possibilites of cost effective development.
I don't see WP7 as the same model that MS have had before. Frankly, Win Mobile was a mess, a hodgepodge of older Windows technologies, stylus, start button, combined with no real hardware plan. This time, there is a clear strategy of modern frameworks, cross-device possibilities, and the hardware is also better defined.
I admit I don't know a lot about hw licensing, but if MS manages to create a credible app store, and if there is enough enterprise software development on the platform (likely, in my opinion), we'll see more revenue generated for all parties involved.
That's all well and good, but first they have to attract handset makers or the developers won't matter. Given the licensing costs, why would handset makers opt for MS's new mobile phone OS over Android? Android has a larger base of apps (since WP7S has none right now), a developer community that from all reports is, "strong, and growing fast," and it's free. If an Android phone costs the same as a WP7S phone to manufacture (and it's likely there won't be a big differential), every penny you pay for the OS cuts into your profit vs. an Android phone, making Android a more attractive option to handset makers, it would seem.
This will, I think, be an interesting, and important, battle to watch.
Handset makers are already onboard, at least ASUS, Samsung and LG, others too. Of course, they may leave again if the platform underperforms. But it's so easy to move from modern .NET development on the desktop to the phone, so there WILL be a lot of apps initially for WP7, and handset makers will see a potential for a nice slice of the business phone market.
And after the recent events of Google vs. China, I'm sure some will be hedging their bets when it comes to selecting platform winners...
My first post was actually a reaction to the simplified AI article. I don't see any connection between Palm's poor performance, and what Microsoft will be facing with WP7. It's a totally different case, and deserves to be treated so.
And yes, this will be interesting battle. But the smartphone market is growing, and there may be several winners.
About Nokia and MS beeing just like palm... talk about "boyism".
If Nokia desires so, it starts bundling Symbian S60 in every low level phone and Maemo on the top ones... and then? All their phones will be "smart". How's that for a market share?
That would be irrelevant since their product would still be dire and their ASP would be even lower. It would only be a mask to their increasingly weak position.
I think Palm had a great product on their hands, but it was simply poorly executed. Product execution is where the juggernaugts like Nokia, Apple and Google have it singed, sealed and delivered.
You mean like the way Google rolled out Buzz?
You mean like the way Google rolled out Buzz?
No I mean like the way they've rolled out the vast majority of their products and services. When these companies announce something, the world stands up and pays attention.
You mean like the way Google rolled out Buzz?
Like the way Google rolled out Navigation Beta. Turned the cell phone industry upside-down (no more having to pay for VZ Nav equivalents). And you can definitely bet the stand-alone GPS companies took note.
I have a nuvi 760 and now it sits in my glove box.
That would be irrelevant since their product would still be dire and their ASP would be even lower. It would only be a mask to their increasingly weak position.
Undoubtedly, but if it is where the market is going, and market shares are used by everyone a "comparison value" to determine Expected Value of a brand...
And don't forget... Mobile operators know that voice is already a comoditty (I should know because I work in one). So if Nokia brings an entry level platform for facebook and e-mail in the form of a 50 usd telephone, even if it is in GPRS for low level consumption... I know where the operators are going to bet... and Nokia will still rule in the market in the years to come... with their dire product.
"most popular" and least profitable. Not the segment I'd like to be in.
Why least profitable? it all comes down to scale. Apple knows this already. If the market is growing there, at the other segments expense... sooner or later the scale effects of producing better phones for a larger market will compensate the diminishing scale effects of diminishing low-level markets.
Just get to the jumping point, and do it in an orderly fashion... just dont' get left behind!
So if Nokia brings an entry level platform for facebook and e-mail in the form of a 50 usd telephone, even if it is in GPRS for low level consumption... I know where the operators are going to bet...
Nokia are already moving in this direction. The majority of their handsets are web-enabled in some way - which means they can claim an enormous "market-share" of the smartphone space.
The problem for Nokia is these are little more than entry-level phones now. And they don't sell for significantly more then other entry level phones. There is very little profit to be had from such devices.
The profitable part of the mobile phone industry is the place where Apple is sitting. Combining high per-unit retail value, with large volume.
In this space, Nokia's competition is the N-Series phones. And year on year, the sales of the N-series are declining.
This is why the tiny Apple overtook the giant Nokia in terms of profitability.
C.
Worse. Everybody is waiting for the next big thing from Apple so Iphone 4.x must be something different, with higher cost of development, or it will have to lower the price because 3 years for a "version" is alot in this market... and even worse, Apple cannot capitalize it's 3GS offer on a sub 100usd market because they are very good equipments with a much higher cost of production... it would be dumping.
For Nokia low level phones, just take everything that was in a Nseries the year before (Hardware wise and softwarewise), put it in a plastic enclosure... and sell it for 100 usd: zero I&D, same fabrication processes, with lower level materials.
And concentrate on the newer models to compete at Iphone level.
Now here is where the problem exists... Symbian is by today standars a "low desire" operative System.
And Maemo suffers for the same problem SAAB and Volvo have...
it's design teams are from Sweden and other northern countries... where "clean lines and interface" mean straight orthogonal simple lines (just see their better known architects)... and todays user have grown fond of a more "natural" design. *
My two cents... I love Apple Iphone, albeit t's acusing it's age, specially on the colors of the screen... maybe some IPS novelty is coming, inline with the other products they have.
I Love PALM PRE WEB OS, as it is by far the best OS around astheticaly and out-of-the-box functonality wise.
I love Android for the freedom of choice (with XDA help)
I Love the new WM7 because I am really fed up with having a screen filled up with "icons" that do not stick to any visual guidelines... Android TOday screens, Iphone today screens are a mess...
I really like the MS approach...
And for the ones that complaint, the fact that the letters go out of the screen mean something... you have another screen on your right, with a fluid and continuous passage. It's the first time I see something like that with horizontal navigation... and Not "home screens with icons" placed side by side, or in a vertical list... that's already so Iphone 1.0 old.
*I love it... I really do, they have produced some of the best design pieces in the world. Alvar Aalto from Finland is one of my prefered designers in the world.
Plus there's all the developers that really can't be bothered to learn the iPhone language but could quite easily build a silverlight app in a few minuets.