Home > Editorials > "The Palm Pre is no iPhone Killer…" Blah, blah, blah.

"The Palm Pre is no iPhone Killer…" Blah, blah, blah.

The moment Palm birthed the Pre into this world, it was immediately thrust into the shadow of a giant. Much like David facing Goliath, Palm’s Pre stood toe-to-toe with Apple’s colossal iPhone.  Although this analogy has been used time and again, people – including those who should know better! – expected the Pre to be a Goliath from the outset.

Well, it’s not.  Try a pre-pubescent David with zits, and you wouldn’t be far off.  Tired and seemingly hopeless biblical references aside, I think that Palm is in pretty good shape.

Allow me to explain my logic here… after the break!

I’ve had to field the endless barrage of people saying “the original iPhone sold 500,000 units in the first weekend, while the Palm Pre has sold only 50,000!”  Well yes, that’s true: in terms of raw numbers, the Pre’s launch weekend paled in comparison to the iPhone’s gang-buster launch. In fact, the iPhone 3G sold one million units in its first weekend, while the Palm Pre hadn’t quite reached a million even after a full quarter of sales.  To those who say the Pre is therefore a failure, I say this:  you’re comparing apples to oranges.  Here’s my answer to all that “#palmprefail” nonsense:

Think back to July 2007…

When the iPhone originally launched, these were its competitors: aging Palm OS devices, boring Blackberries (no disrespect), and a smattering of feature Nokia phones, most of which weren’t subsidized on most U.S. carriers.  Plus, the economy had not yet been hit by massive bailouts and layoffs.  On top of all that, Apple was riding on the wave of their hugely successful iPod product line and massive existing user base.  The iPhone had also been heavily advertised and rumored up to a full year prior to its launch, and even got a sweetheart promotion during the Academy Awards. Apple was also enjoying a comeback in the computer world, releasing their eye-candy systems and matching peripherals.  Put together the ingredients of: 1) a non-existent competing market 2) awesome advertising, 3) good economic times (compared to NOW, anyways) and 4) a known product name, and you suddenly have the makings of an explosive device launch.  With the planets aligned, Apple timed and executed their launch perfectly.  The iPhone sold for $600, and still it was a smashing success.

… Notice how in that entire discussion there is no mention of an App Store?  None. Because it didn’t matter.

Fast forward to June 2009…
iPhone is king, with 60,000 apps, about to launch its third generation device, the 3GS.  Blackberry has the Storm, Curve, and Bold, with their App World.  Google has the G1, with a growing Android Market. On the lower end, a smattering of touchscreen feature phones…  the landscape has totally changed.  Oh, and by the way: the economy’s in the tank.

Meanwhile, Palm is but a shadow of its storied past (we’re talking under two bucks a share, people!).  They have a great idea (webOS), secure some start-up capital, swipe a few rogue Apple engineers, and design the Palm Pre.  But Palm has nowhere near the resources, advertising budget, and — as is becoming painfully clear — the marketing know-how of the Apple Machine.  They launch the phone in one country, on one carrier.  In its first weekend, the Palm sold an estimated 50,000 Pre units. In the first quarter of sales, it was estimated Palm sold about 800,000 units.

Despite the history I’ve just described, many people (especially blind iFan “journalists”) have dismissed the Palm Pre as dead in the water because it did not “kill” the iPhone’s sales numbers. … My answer is… and pardon the necessary vulgarity: “are you f***ing kidding me?!

Folks… let me make one thing very, very clear:

There is no such thing as an iPhone killer.

Not the Palm Pre, not the HTC Hero, not even the highly vaunted Motorola Droid.  Not anytime soon.  Why? Because the iPhone is much more than a phone: it’s rightfully achieved pop-culture status…  the “Kleenex” or “Windex” of the consumer smartphone market, if you will. Now, that’s not to say that Kleenex is the best brand… because phone versus phone alone?  There are many who would say the Palm Pre is superior to the iPhone. But an iPhone killer?  None exists.

Sprint CEO Dan Hesse recognized this. When he was asked if the Palm Pre was making a dent in iPhone sales, he naturally balked: “… you can almost put the iPhone, to be fair, in a separate category. The Apple brand and that device have done so well, it’s almost not… it’s like comparing someone to Michael Jordan.” Perhaps not the wisest choice of words (iSheep “journalists” had a field day with that one), but in essence he merely stated the obvious, and gave Apple their proper credit…  basically everything I’ve said here in a nutshell!  As for Palm? They no doubt were cognizant of this long ago.

Still not sinking in?

Let’s try a more appropriate comparison to bring it all home…

Putting it into perspective: Palm Pre vs Google G1

Google’s G1 phone launched with considerable fanfare less than a year before the Palm Pre on T-Mobile.  Even in this matchup, Palm is still at quite a disadvantage: when the Pre launched, they certainly didn’t have the name recognition or the resources that Google had when they launched their G1!  And yet… and yet… The Palm Pre beat the G1 in first quarter sales.  The G1 didn’t reach a million units sold until six months after launch. It’s estimated the Palm Pre reached a million units as early as four months after launch.

Google’s second generation devices (myTouch, HTC Hero, Motorola Droid) are doing considerably better.  The Droid, riding a heavy advertising blitz after being launched by THREE companies (Verizon, Google, AND Motorola) reached a million sales in 4 weeks.  Not too shabby, but that’s with a year’s headstart, and again, with considerable backing from three big companies.  So before you’re tempted to compare the Pre’s sales to the Droid, it’s crucial to remember the Google phone’s humble beginnings.  By all accounts, if one were to extrapolate that Palm could duplicate Google’s success (assuming they play their cards right), then they’re off to a darn good start.

So where does this all leave us?

I’m not sure. … Let me explain myself: I’m not making excuses for Palm, here.  The world of business lives in the NOW (how appropriate, @Sprint!), and doesn’t care about sob stories.  However, taken into appropriate context, Palm Pre sales have done well and actually exceeded many expectations.  Whether or not all this is enough to keep Palm afloat (they dug themselves a deep hole long before the Pre came around), I cannot say.  Dammit, I’m a doctor, not an economist.

All I’m saying is that people who gauge the Palm Pre’s success or failure based on its relative sales versus the iPhone or now-more-mature Android OS devices are using really myopic, flawed logic.  It’s a shame that tech journalists/analysts don’t recognize this, and an even bigger shame that many investors take what these clowns say at face value.  The only metric that truly matters is the financial reports from Palm.  Period.

Categories: Editorials
  1. Calvin
    December 12, 2009 at 8:58 am

    WebOS updates in six months: Eight. How many updates have ANY other platform pumped out in their first six? Thank you, I rest my case. 🙂

  2. Remon
    December 12, 2009 at 7:59 pm

    Calvin, the number of OS updates per unit time is not a good measure of anything. It could be a sign of how poor the operating system is, or how poor the last update was. However, without being distracted by that issue, I completely agree with Dan's analysis. I would also add the following: I think that Palm has made some spectacularly good calls:1) WebOS clearly has pushed the boundaries of smartphone UI design. It is nothing short of genius.2) While the Pre has a number of missing features at the moment such as voice dialing and video recording, the timing of the release was a masterful stroke. There is enough in the Pre to make it a device to be taken seriously, and Palm recognized that to delay would have been a fatal mistake, given the rapidly changing landscape of the smartphone market.From my point of view the Pre's greatest weakness is in the marketing area. I'm not hearing the main message that should be driving sales of the Pre: tell me why I should buy a Pre instead of any of its competitors. That's the message that is powering the Droid, and frankly, IMHO, it should be the one powering the Pre.

  3. Palmdoc
    December 13, 2009 at 10:32 pm

    The key to Palm's success or failure will be how they launch Internationally and not just concentrate on the US and a few European countries. I hope they don't ignore the huge Asia-Pacific market for too long more as Android is already making in-roads there.

  4. Vanessa
    December 15, 2009 at 4:45 pm

    I had my Pre for over 5 months, I couldn't be happier…Love my Pre.

  5. Dan Ramirez
    December 18, 2009 at 3:52 am

    Me too! I'm really hoping it catches on. Palm's an easy company to cheer for. But they need to execute flawlessly, and there have been a couple missteps along the way. We'll see what happens…

  6. Dennis Jaffe
    December 22, 2009 at 5:22 am

    Dan,I used a Treo 600 from early '04 to early '08. Loved it. It died. It was its time.Had a Centro for a few months. I've had a 755P since September '08. Aside from a few too many occasions where I've needed to soft-reset, I've loved it. Great design and technology features.I love the keyboard more than anything else. I tried the Pre. While I've had trouble with its keyboard, there's one thing I really dislike, and another I really hate:My understanding is that you lose the timestamp for text messages. Is that correct? Does that not bother you?What I hate is that to edit something you've already typed, you have to ever-so-carefully place your finger or fingernail just so in the right position on the screen … There's no navigation feature as on the 755P.I don't get it! How can you deal with that? What am I missing 😉 ?I was really looking forward to the Pixi with its improved keyboard, including without the ridge interfering with typing, using the top row. Then I saw firsthand how the slow processor basically made it garbage.I'm really looking forward to Palm's January 7th news conference, at which it will announce the new WebOS 1.3.5 for Pre and Pixi.I'd love your reaction. Thanks for blogging, Doc.If you can see my email addy, please feel free to share with me your thoughts there. But I'll gladly check back here to see if you had the opportunity to respond.Thanks.Dennis

  7. Dan Ramirez
    December 22, 2009 at 5:45 am

    Hi Dennis!Thanks for chiming in. I'd be happy to email you since this discussion really doesn't touch on the whole "Palm Pre launch shouldn't be compared to iPhone-Droid" thing…Very quickly I'll say this: you can easily patch the Pre to show time stamps. But no, it didn't come with it out of the box and should have.Regarding moving the cursor: you DON'T have to exactly tap the cursor where you want: holding the ORANGE key, slide your finger up/down and left/right to move the cursor around. You DON'T have to hold your finger above the cursor: anywhere on the screen will do. … This is nowhere near the simple solution of a trackball or 5-way, but it's better than furiously tapping at the screen to get the cursor right.

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