Palm CEO Jon Rubinstein blames Droid for Palm Pre’s lackluster sales

Wed, Mar 24, 2010


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.


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2 Comments For This Post

  1. Dan Says:

    Your title is misleading. JR was not blaming DROID per se, but rather the timing of the Pre’s carrier launches. And while I agree that launching with Sprint was probably not the best way to go, Verizon reps CLEARLY have been completely distracted by Android. From personal experience and readings on forums I can tell you that many folks walk into a Verizon store to look at the Pre Plus only to have an inferior device like the Droid Eris pushed on them.

    Your crass and patronizing tone aside, you bring up some good points. But I’m reserving final judgment on Palm’s fate on their next webOS device. WebOS is fantastic. It just needs to be coupled with killer hardware, and fewer marketing missteps.

  2. Scott B. Says:


    All due respect Dan, EA was Correct and if you really believe palm will have another device while daily; investors and users are pulling out I feel you will be solely disappointed.
    Palm has lost and is on borrowed time, lackluster cheap manufacturing and poor performance added to its demise, Daily Stock reports show that it is done and only has enough cash for the next short while to sustain itself, But due to it’s stopping production on all Pre and pixie units just a few days ago the end is very near.

    Remaining inventories are being sold out and are not being replaced, Once the selling of the inventories are complete the doors will close shortly.

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