Palm post-Pre: One handset won't cut it

This is the week we all root for the underdog.

I suspect I'm not the only one who's stood by and watched -- or winced -- as Palm stumbled ever further from the heights of nerd-worship it enjoyed a decade ago. I've cringed as a company that for a time seemed capable of doing no wrong instead spent more time reorganizing its corporate org chart while its iconic products gathered dust.

Which saddens me, because I've bought more than my fair share of Palm-branded PDAs over the years and still keep my old Tungsten T5 on my desk. I suppose having it visible brings me comfort that someday I'll have another reason to buy Palm.

So it's with a sense of nostalgia and hope that I find myself pulling for Palm as it launches the Pre later this week. I'm holding my breath that it'll be enough to pull the once-high-flying company back from the brink of oblivion. Let's cut to the chase, then: It won't. Not alone, anyway.

Carmi Levy: Wide Angle Zoom (200 px)It's not that the Pre is a lousy device. As devices go, it seems to have everything it needs to compete. It's no iPhone or BlackBerry killer, but it's good enough to get buyers who up until now would only consider one of these two offerings to expand their decision set to three. But Palm's window of opportunity will close just as quickly as it opened if it limits the discussion to this specific piece of hardware. The faster Palm can move follow-on devices into consumers' hands, the more concretely it assures its survival.

A quick peek at Research In Motion's ability to withstand Apple's full-on assault on its BlackBerry franchise should hold a number of important lessons for Palm:

1. Exclusivity is a death sentence

With AT&T pushing to extend its exclusive deal with Apple into 2011, you've got to wonder who benefits when a hot smartphone is only available through one carrier. Certainly not consumers, who are either forced to do business with their second- or third- choice carrier simply because they want an iPhone, or are forced to stick with a phone and/or carrier they can't stand because bailing on their contract would be ruinously expensive. Certainly not Apple, whose efforts to maximize market share are hampered by a deal that keeps their devices out of the majority of American consumers' hands. Exclusivity limits customer freedom, and imposes unfair costs on them.

RIM's managed to get its devices into virtually all major carrier channels, thus lowering barriers to BlackBerry entry for consumers who otherwise might not switch carriers. It also drives longer-term market share growth -- something Apple needs to pay attention to as it taps out the AT&T subscriber base.

What Palm must do: While Palm's exclusivity deal with Sprint -- arguably the weakest major American carrier -- seems like a dumb move, it could turn out to be a masterstroke, at least for the first six months or so of its product lifecycle, before Verizon enters the picture. The faster Palm moves to broaden availability through as many major carriers as it can, the faster it can lay down roots by making it easier for any customer to give a webOS-powered device a whirl.

2. One device isn't enough

I believe in the old maxim of different strokes for different folks. Some people like physical keyboards, while others are content with screen-based text entry. Some buyers covet flip-based form factors, while others lean toward sliders or all-glass designs.

Yes, Apple's carved out a wonderful niche with a one-device strategy. But for all those potential buyers out there who view the lack of a physical keyboard as a deal breaker, other iPhone form factors would keep them from bolting. RIM's multiple form factor strategy may include some duds (cough, Storm, cough) but a range of more or less successful devices does a better job of expanding the brand over the long haul than one blockbuster, potentially polarizing design.

What Palm must do: Fill the pipeline with as many form factors as it possibly can. The devices themselves don't matter as much as the operating system, webOS, does. Rumors of a resurrected webOS-running Foleo indicate Palm's thinking is definitely on the right track. A closer look at RIM's accelerating rate of new device introductions should give Palm some ideas of its own.

3. Ecosystem is crucial

Nothing, not even the Pre, is as critical to Palm's future right now as webOS and the environment that surrounds it. Over a decade ago, Palm defined the best practices associated with building a mobile platform ecosystem for its original line of PDAs. It poured resources into tools that made software development relatively easy. It reached out to developers and helped them build their own businesses creating and marketing software solutions for its then-revolutionary PDAs.

The company may have lost its ecosystem mojo in recent years, but the door's not totally closed thanks to the Pre-fuelled buzz. Developers -- some long-lost Palm coders, others too young to remember when Palm was anything but a bumbling also-ran -- are eagerly listening to Palm's pitch. Unfortunately, every other handheld vendor is making the same pitch today. But Apple's got some cracks in its online app armor, including a Byzantine approval process and lack of proactive communications with developers, so Palm's got some wiggle room.

What Palm must do: Palm has an opportunity to attract disgruntled or otherwise unfulfilled developers and differentiate itself as the platform vendor that truly understands partnership. Its online presence may not be anywhere near as large as Apple's or even RIM's, but an early focus on building quality relationships with developers could be enough to give it a competitive advantage. It's a message that developers hoping to avoid getting lost in Apple's ever expanding ecosystem want to hear.

Palm's been riding a wave of goodwill since the Pre was first demonstrated at CES last January. Converting the feel-good marketing story of the year into sustainable revenue will likely be the biggest challenge Palm has ever faced. But for those of us who root for the underdog, the resurrection of a faded industry pioneer gives hope that the era of true smartphone innovation is about to kick into overdrive.

Carmi Levy is a Canadian-based independent technology analyst and journalist still trying to live down his past life leading help desks and managing projects for large financial services organizations. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.

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