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  • Is Apple Afraid of Palm?

    May 26th, 2009

    We all know that Palm made the handheld concept successful, even though Apple’s Newton was there first. Sure, the Palm Pilot was cheaper and not as feature-laden, but it carved a decent niche for itself for several years. That is, until the smartphone took over and smacked it in the rear with a resounding kick.

    Now a beleaguered company, Palm has tried to regain the lost luster with its latest contender, the Palm Pre, which is, as with recent BlackBerry products from RIM, considered by some to be an iPhone killer.

    True past contenders haven’t done so well in times of product-to-product competition, although RIM, as a whole, with a wider range of carrier partners, is still ahead of Apple in total sales. But they’ve had extra years to get there.

    So the question is whether the Palm Pre is going to be capable of hitting the iPhone head on. I suppose one reason why the company is being taken seriously nowadays is because one of its key executives, Jon Rubinstein, was also a key player at Apple during the years that Steve Jobs rescued the company with fancy new Macs and the iPod.

    However, raiding a few executives from Apple — and Apple has done the reverse from time to time in recruiting employees from Palm — isn’t necessarily going to transform the company into a smartphone powerhouse overnight. But that hasn’t stopped some from praising the Pre to the skies, including its supposed superior multitasking and search capabilities.

    Now where the tech media seems to regard Apple as threatened is the curious way stand-in CEO Tim Cook has responded to questions about the Pre. His hints about going after anyone attempting to heist Apple technology have been interpreted as a direct slam against Palm. In passing, Cook denies that he was referring to any particular company, but simply making a general comment about Apple protecting its legal rights.

    Of course, both Apple and Palm have large patent portfolios, and I’m sure the former is examining the features of the Pre real carefully to see if there’s evidence of infringement. I suppose Rubinstein’s presence as a key executive at Palm may bring cause to wonder if he didn’t attempt to infuse the new products with ideas he gleaned during his tenure at Apple. Then again, he’s been in the tech industry for years and he understands the rules well enough, so it wouldn’t seem logical for him to allow anyone to steal Apple’s intellectual property.

    Although the Pre seems attractive enough, the slide-out keyboard makes it resemble the fancier versions of the BlackBerry more than the iPhone. But the onscreen demos that Palm provides do enhance a surface resemblance to the iPhone. Even the screen text seems to be crafted in a similar typeface. How it will fare when it goes on sale, however, is another story entirely. Since I’m writing this in advance of the official release via Sprint, scheduled for June 6th, it’s quite possible the initial raves were written by preselected reviewers whom Palm felt would be sympathetic to the company.

    In addition, partnering with Sprint, regarded as one of the worst mobile phone carriers in the U.S., would seem to be a curious choice. Then again, one beleaguered company trying to prop up another might have been a smart decision for both, as Palm might receive a more sharply-focused marketing campaign as a result.

    As for Sprint, yes, I’ve had experience with the company. My two years as a customer seemed endless, as I encountered frequent disconnects and utterly horrible customer service. Sprint’s later merger with Nextel was clearly not a match made in heaven, as the combined company’s fortunes only seemed to worsen. As market leaders AT&T and Verizon Wireless routinely report subscriber increases, Sprint has continued to lose customers quarter after quarter. Not good.

    What it means, however, is that the competition between the iPhone and the Pre isn’t quite direct. When you consider either option, your decision may depend on which carrier you have now, and it’s a huge question whether large numbers of potential customers would be willing to ditch other companies in favor of Sprint, even if the Pre is every bit as compelling as the early press suggests it might be.

    In addition, Apple’s ace in the hole is the fabulous Apps Store, where tens of thousands of iPhone apps are available. By dint of its experience with iTunes, Apple knew how to craft a compelling online marketplace for developers both big and small. Palm’s experience is limited to selling overpriced and limited function apps for its handhelds. Even if the Pre is in some ways superior to the iPhone, not having all that extra stuff to download may be the biggest shortcoming in this head-to-head battle to the death. Or whatever you want to call it.

    The June 6th release date is also fascinating, as it will fall two days ahead of the start of Apple’s annual WWDC gathering in San Francisco. During the keynote, to be delivered by marketing VP Philip Schiller, you just know they’ll be talking not just about the new iPhone software but will very likely be introducing the newest model, and perhaps even doing some direct comparisons to the Pre.

    Then we’ll be able to separate the men from the boys or the women from the girls, if you prefer.



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