From the outside, none of those attempts seem to be working. Last week, the company reported a net loss of $506.2 million for its second quarter of fiscal 2009. Sales sank to $171 million and its shipments decreased 13 percent. In American Football terms, they have to feel like the Arizona Cardinals at the end of last night’s 47-7 drubbing by the New England Patriots. All this negativity was masked by the euphoria around the upcoming operating system, Nova, which is going to be released at CES this January. There are more handsets on the way and they are hoping to go after the “fat middle” of the smartphone market.

There are some things Palm can bank on: It has a big user base — between 7 and 8 million people are using Treos and are actually pretty thrilled with the aging devices; they can provide a good base on which to grow the company. In addition, there are a large number of application developers who continue to support the platform.

Management’s remarks encouraged the markets, which bid up the stock on Friday. No one seemed to notice that it’s almost a year late, and that we have a global meltdown with handset (including smartphone) sales sinking faster than a brick in water. Palm, like most vendors, is at the mercy of the carriers, which will ultimately decide the devices they want to push to the end users.

Given how closely AT&T is associated with Apple (neither can live without theother) and T-Mobile’s partnership with HTC, Palm has its work cut out for it. There is already talk of the new Google Phones, and I’m pretty sure Apple isn’t going to sit still and wait for Palm to stage a comeback.

My friend Pip Coburn often reminds me of Warren Buffett’s now famous adage: Turnarounds seldom turn.

Terms of the deal

From the archives:

Palm’s last stand, with a bit of Elevation.

[...] who is it going to be?  Palm just got another $100M.  They have the money.  Do they have the vision?  There’s a poll on that link and when I [...]

[...] Read | Permalink | Email this | Comments [...]

[...] seamless environment used on both long-running smartphones and netbooks, I think they have a shot. Om points out that Palm could use another life-line in the form of a partner since AT&T has Apple while T-Mobile is working with HTC and Google. [...]

[...] Read | Permalink | Email this | Comments [...]

[...] the fortunes of the flagging company? Palm’s biggest investor, Elevation Partners, is putting $100 million into that Nova, after already spending $325 million for 25 percent of the company last year. Maybe [...]

[...] the fortunes of the flagging company? Palm’s biggest investor, Elevation Partners, is putting $100 million into that Nova, after already spending $325 million for 25 percent of the company last year. Maybe [...]

[...] the fortunes of the flagging company? Palm’s biggest investor, Elevation Partners, is putting $100 million into that Nova, after already spending $325 million for 25 percent of the company last year. Maybe [...]

[...] the fortunes of the flagging company? Palm’s biggest investor, Elevation Partners, is putting 0 million into that Nova, after already spending 5 million for 25 percent of the company last year. Maybe all [...]

[...] Read | Permalink | Email this | Comments [...]

Palm should go the OEM licensing route and concentrate on design, technology, R&D, and the NEXT big thing. Getting production and distribution off their books and backs will be a great relief.

I don’t understand Elevation Partner’s rationale here. Palm is clearly the Oldsmobile of smart-phone technology and has lost to Apple, Android, Samsung, Microsoft and others. Maybe there are some baby boomers who are using the Palm platform and aren’t capable of switching to something better, but I don’t see anyone using it anymore. I used it 8-9 years ago (has it been that long?) when it came out on the Samsung i-500? But then the typical Silicon Valley leader complacency took over and their platform aged faster than gorganzola left out on a hot day. The terms that EP got are crap. They could’ve waited longer and watched Palm slip into BK and picked up the entire company for much less. I mean it’s not like you have to worry about “talent” leaving the company, right? A. Define talent. B. Where they gonna go?

Currently, in the iPhone-class OS space, there’s only Apple and Google Android. Both have new OSes. Everybody else has really old stuff. Palm’s new OS is a post-iPhone OS (like Android), so they have an opportunity to be the 3rd player in that space. I have a few friends who were recently hired there - some of the smartest guys around. I’m expecting something great.

How MANY preferred shares did Elevation get, though?

A rather critical number that has yet to be revealed.

Palm has an opportunity here :

Basically as the commentor noted above, Palm seems to have some great talent ….And if Nova does not turn out to be a dud. It will be great acquisition target for somebody like Samsung or Nokia…

The financial crisis makes things hard for palm, But if you are a carrier like Sprint, Verizon or Tmobile. You need a phone to rein in the mass exodus to ATT. All I am saying is give palm a chance !

It seems as if Sprint has been Palm’s savior as of late and Sprint really needs a true iClone. Possible partnership material.

I used to be a Treo chearleader, but …. not for a long time. The iPhone is the device to beat and that will be hard. Only if Apple sleeps on its laurels like it did with the Mac, the iPhone can loose ground.

I think the Palm name still says “I am productive.” and not “I’m cool, look at me!”

I don’t think the Palm name says “I am productive.” per se, I think it says “I don’t know that there are better options out there” or “I’m set in my ways, I don’t like changing things.”

OM - It’s worth noting that RIM also got a boost last week due mostly to much better than expected sales of the Blackberry Storm (in the US, exclusive to Verizon)

I mean, who exactly is Palm’s customer base? Cutting edge consumers? No, that’s iPhone and Android territory now. Business users? No, that’s Microsoft and RIMs territory. Even complacent, average consumers made the WinMo6 based Blackjack II the best selling phone for 2008. To convince anyone to consider them again, Nova not only has to be as good as iPhone and Android, it has to be compellingly better. I don’t see Apple or Google resting on their laurels anytime soon. Even as an acquisition target they are unattractive, to me the Palm brand name has about as much cache as Commodore or Amiga, nothing more than distant nostalgia.

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