First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Palm CEO: We Could Have Been Bigger Than Droid
- — 20 March, 2010 05:32
Yesterday's statement from Palm's CEO, lamenting how Motorola's Droid beat the Palm Pre into Verizon stores, I was reminded of a famous Marlon Brando line from "On the Waterfront." Many people know the words, even of they don't know they come from a 1954 motion picture.
"I coulda been a contender," said Brando's character, Terry, a washed-up boxer, lamenting his fate.
Compare that to what Palm CEO Jon Rubinstein said Thursday during his company's third-quarter results call with analysts:
"If we could have launched at Verizon prior to the Droid, I think we would have gotten the attention the Droid got. And since I believe we have a better product, I think we could have even done better," Rubinstein said.
Yes, except for that Verizon problem, Palm's CEO thinks his company "coulda been a contender."
Of course, customers have decided that Palm doesn't make a better product, and they made that decision well before the Droid burst onto the market last October. By then, the Pre had been on the market for four months.
Customers knew about the Palm Pre well before they went to the Verizon store to purchase a Droid. Palm says an exclusive agreement with launch-partner Sprint kept Palm out of Verizon stores until late January. Yes, if Palm had Verizon as a launch partner, it probably would have helped.
But, nothing can protect Palm from Android, which has captured whatever public imagination the iPhone hadn't grabbed previously. With BlackBerry and Windows Phone 7 as additional competitors, Palm's WebOS platform has found it impossible to gain real market traction.
Palm's stock crashed 19 percent following the conference call, during which it was revealed the company had shipped more than twice as many smartphones to resellers during the quarter as the resellers actually managed to sell.
That made third-quarter revenue look brighter than expected, but Palm said working off the excess inventory will take a while, resulting in lower revenue while that process continues.
CNNMoney.com took note of the company's plight in a headline that sums up my opinion, too: "Palm's new price target: $0."
"Palm's future already looked bleak," the financial news site commented. "But after reporting worse than expected results for the third quarter Thursday, some analysts think the company's stock is now essentially worthless."
My normally stoic Wall Street pal, Charlie Wolf, wrote a research note Friday that talked about the trouble Palm faces, but despite its stock dropping to a 52-week low, ends on a vaguely hopeful note.
"Were it not for the elegance of WebOS and its potential, we would downgrade the stock to an underperform rating," Wolf wrote in his Needham Research report (PDF).
That's what I love about Charlie. He's there for the money, but has a real soft spot for technologies that deserve a break. And he's right about the "elegance of WebOS."
My guess is Palm will manage to climb out of its current hole, but only far enough to see its future in the setting sun. Eventually, Palm will be bought by another company (again) but perhaps only so whatever patents it owns can drive a series of lawsuits against the companies who knocked it out.
And speaking of knock-outs, here is the rest of the Brando line.
"You don't understand. I coulda had class. I coulda been a contender. I coulda been somebody, instead of a bum, which is what I am, let's face it."
I am not ready to say Palm's a bum, but by setting a target stock price of zero, two analysts--Canaccord Adams' Peter Misek and Morgan Joseph & Co.'s Ilya Grozovsky--have already done it for me.
"Palm is essentially an accelerating death spiral," Grozovsky told CNNMoney.
Sadly, sometimes a company that shoulda been a contender just can't win in the end.