Further Thoughts on the Palm Pre; Still Doesn’t Look Enough

Posted on by

Following on from yesterday’s snap thoughts on the launch of the Palm Pre, the big question is going to be how well it sells. I suspect not as much as many are hoping. From Peter Kafka on All Things Digital:

[The new Palm Pre could] try to take market share by coming in significantly lower than the $200 or so Apple wants for its iPhone. But when I ran that theory by Palm CEO Ed Colligan, he looked at me liked I’d peed on his rug. “Why would we do that when we have a significantly better product,” he asked, then walked away.

If you listen very carefully, you can head Colligan ringing Palm’s cloister bell. The Palm Pre is going to come out into a crowded market space. As well as a maturing iPhone platform (with an App Store, video capability and a market leading MP3 player and interface) and RIM Blackberry portfolio (still sexy and has the Enterprise market), the Pre is also going to be up against the Nokia N97 and a Finnish marketing machine that seems to finally understand the need to focus on America

Handing the Pre probably the highest ticket price is going to give people a moment of re-consideration in the shop. The original price point was fixed at the design stage of $299. “The right handheld would have to be affordable , Anything over $300 would move it out of impulse buy range,” wrote Jeff Hawkins in his design brief.

Has Colligan been as ruthless as he was in those days, when he would ask “does this feature sell one more unit?” There are a lot of features on the Palm Pre, and many of them appear to be there because other popular handsets already have them, yet there are very few innovations on this “significantly better product.”

The one new thing is the idea of the PIM apps all working with multiple data sources to present a synergy of data and information. Pulling information from the various soups of data out there to present in a unified form has been tried on a consumer machine before… the Apple Newton.

You may think there’s an awful lot of ex-Apple employees in the new Palm, but I couldn’t possibly comment.

What I’m seeing this morning is a split on roughly geographic boundaries. The Europeans are looking at the Pre and going “yes, and?” while the American’s seem to be caught in an almost Jobsian Distortion field. A field that is slowly being punctured as people step back and look at Palm’s business model and burn rate of VC cash from Elevation Partners.

Yes, Palm are back at the smartphone poker table, but they’re playing with a pair of fives in the hole, and the assumption must be that everyone else is likely to have a stronger hand.