After posting disappointing earnings last week, shares of Palm plummeted nearly 20% down to $4.59 a share, marking a new 52 week low for the beleaguered stock. And unfortunately for Palm, it doesn’t seem like there’s much of an upside with a few analysts lowering their price target for Palm all the way down to zero. Indeed, the Palm Pre, a decent device it may be, simply wasn’t and isn’t able to compete against the consortium of Android devices, Blackberrys, and iPhones.
During Palm’s earnings conference call last week, Palm CEO and former Apple executive Jon Rubinstein said that Palm’s struggles can partly be attributed to the fact that the Motorola Droid was released on Verizon before the Palm Pre.
“If we could have launched at Verizon prior to the Droid,” Rubinstein said, “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.”
And if grandma had balls she’d be grandpa.
Palm knowingly hitched its wagon to Sprint at its own peril. It’s no secret that Verizon has millions more subscribers than Sprint, but Palm chose to make the Pre a Sprint exclusive presumably due to more favorable contract terms. It was a trade-off, a risk, a gamble, and looking back, it didn’t pay off.
The Palm Pre has been around since June, and it had plenty of time to generate enough hype, buzz, and positive feedback that it could have made a splash when eventually launching on Verizon. The fact of the matter, though, is that the Pre was merely a pretty good device in a market where you need to be great to succeed. Pointing the finger at a delayed Verizon launch simply ignores some of the shortcomings of the Palm Pre itself.
Looking forward, Palm is hoping to fix some serious inventory problems its had (Pre’s are just languishing on the shelves) while also taking measures to increase sales by sending trained “Palm brand ambassadors” to Verizon stores so that sales staff will be able to properly highlight the devices features. Palm is also working hard to reach out to developers and solidify what can only be described as a laughably weak catalogue of 2,000 or so applications.
Will that help?
In a word – No.