Why the Palm Pre won’t challenge the iPhone

Wed, Apr 15, 2009

Analysis, News

The Palm Pre created a huge splash when it was unveiled at CES earlier this year. At last, people thought, a worthy competitor to the iPhone was upon us. The Pre, of course, is scheduled for a release sometime in the second quarter of ’09. This means a late June launch at the latest, and according to recent reports, a mid-May launch at the earliest. But despite generating an impressive amount of hype and interest, recent data suggests that the Pre might not sell as well as some might have imagined.

Changewave recently conducted a study of 4,292 potential smartphone buyers, and found that only 4% of respondents expressed interest in purchasing a Palm Pre in the next 6 months. In contrast, 37% of respondents expressed plans to purchase a BlackBerry device, while 30% of those polled indicated that they were planning on purchasing an iPhone.

Someone once said that research studies are like perfume. Nice to smell, but dangerous to drink. So while the above data shouldn’t be looked upon as being conclusive, the results should nonetheless be worrisome for Palm executives.

It’s not about the UI anymore

From the video footage we’ve seen, the Palm Pre looks slick as all hell. It’s super responsive, can multitask, has a multi-touch screen in addition to a pull out QWERTY keyboard, and a new and intriguing OS. That said, the basic UI of the Pre isn’t revolutionary. It won’t attract eyeballs in the way the iPhone first did when it was unveiled in 2007. It’s now 2009 and people are used to touchscreens. Multitouch doesn’t blow people away anymore. Android and the BlackBerry Storm have been on store shelves for months now, and what was exciting and new in 2007 has become commonplace in 2009.

The Smartphone battle no longer hinges solely on the UI. Nowadays, what you can do with a smartphone (music, movies, apps) is what drives sales. In that respect, the app store for the iPhone is already off to a commanding, and perhaps insurmountable, lead.

Why people switch carriers

People love cool phones, but they don’t switch carriers for a phone that just looks “pretty cool.” They switch carriers for phones that blow them away, that offer them something they’ve never seen before. Phones that provide a new level of functionality that was previously unheard of is what motivates people to go through the hassle of switching phone carriers. We’ve looked at over an hours worth of the Pre in action, and while Cards is cool, as is the integration of social networks and calendars, that’s not enough in the minds of consumers to blow them away.

Motley Fool sums it up aptly when it writes:

Therein lies the difference. The iPhone was bigger than AT&T; the Pre is apparently smaller than Sprint.

By all accounts, the Palm Pre looks to be a great device, but is it that fundamentally different from what Apple, RIM, and Google’s Android already offer? Couple that with the fact that the phone will be tied to Sprint, and it’s hard to believe that the Pre will really offer much of a challenge to Apple.


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6 Comments For This Post

  1. John Dingler, artist Says:

    What an inspired and insightful comment from the Motley Fools. Yeah, it cuts to the chase and puts the two phones to their respective carriers in what seems to me to be the correct comparative relationship. And, Edible, yeah, the iPhone dazzled because it executed an evolution superbly and people, being naturally attracted to pleasant progress, embraced it with enthusiasm.

  2. bud Says:

    Yeah, It isn’t the phone itself that will kill the pre. It is the exclusivity contract.

    Which is a shame. It looks like it could be an excellent choice for many, on other carriers.

    If the Palm Pre were available on ALL carriers, it might have a chance.

    Being a totally web app type of phone just makes me wonder who is going to bother to write their web pages specifically to be a great experience on the Pre, despite it being built on Ajax web standards, you still have to bow to the interface and form factor in ways that other browsers may not understand.

  3. George Pm Says:

    I dont think Palm should challenge apple because they are creating their own lane with innovative features like live internet based os,card system,and intergration of all phone functions working ahead of your thinking.A true smart phone.Sprint is the pefect partner if u need a fast,reliable data service,plus Sprint has the best plans.Apple should consider Sprint itself.

  4. Evil K Says:

    – It’s Sprint only til the end of the year. Hardly exlusive. If apple doesn’t smarten up and let the iPhone loose of AT&T, it’s going to hurt them in the long run. AT&T is the only winner there.
    – No one is going to change the mind of apple fanbois. Steve Jobs could package his own manure and they will buy it.
    – Pre is more a shot over the bow. I don’t think anyone expects anything to unseat the iPhone anytime soon. The iphone is a well done device and it looks like the 3.0 upgrade will close up a lot of the holes it has. I’d already have an iphone if not for AT&T – this is a show stopper for me and a lot of people. The battery and lack of keyboard are also biggies for me.
    – There aren’t going to be any iPhone killers. No phone is going to suddenly displace the millions of units sold. Not going to happen. Even IF the pre were 100x greater than the iPhone, people will be very resistant to acknowledging their toy isn’t as good as someone else’s new toy. And then there’s the misplaced apple brand loyality (and realize I think any brand loyality is stupid)
    – It will be interesting to watch what happens over the next few years – the OS on the iphone runs the risk of being a weight around it’s neck. This is the one of the many things Palm has right.
    – Competition is a good thing. Those of you with an iPhone should be thrilled something is making waves. It’s the reason you’re getting some of the new things in your 3.0 upgrade.

    Personally, I wish the fanbois on both sides would STFU. The Pre isn’t going to be an iphone killer and the iphone isn’t THAT great.

    I’m just happy to finally have a good phone available at Sprint. Their phone selection has pretty much sucked. I stay with sprint for various reasons, one being my 20% corporate discount. Even without that, I wouldn’t go to AT&T.

    My .02

  5. ummm Says:

    Gee.. can you wait until there are at least some ads for the thing before you start predicting the future?? Not even waiting till the thing is released. The general public (in the broadest sense) is not even aware of a new phone being offered. Only a small percentage of cell phone geeks (myself included) know of a Palm phone being released. Kind of tough to already state survey’s on what people are going to buy.. no?

  6. Neil Anderson Says:

    The future is so hard to predict … especially in advance.

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