Talks of Palm’s Demise

There have been talks recently of Palm being on the brink of disaster. Sales have dropped drastically (more than 70%…egads!) and they’re burning through cash like there’s no tomorrow. Those two things alone are enough to cause panic in any conversation. However, we need to take some things into consideration before jumping to any conclusions.

    1) Sales – Of course they dropped! Duh. First, we’re in a recession. More importantly though, the Palm faithful are waiting for the Palm Pre. Have you heard about this phone? Slated to come out in the first half (whatever the hell that mean…thanks for the six month cushion Palm) of 2009 it will be an entirely new device (rather than the nominal upgrades on the OS or form factor we’ve seen lately). The new operating system, WebOS looks to be quite nice. It’s gotta be good if Apple and Palm are rattling sabers over supposed patent infringement. So please…don’t get your underwear in a wad over the sales drop. When the Pre is released you’re going to see some explosive sales numbers.

    2) Cash – Palm just had quite a cash infusion recently ($100 million back in December) and has blown through it all. So? They’re coming out with a new product…a NEW product. New products require some R&D and they also require a bit of marketing. I’d be surprised if Palm DIDN’T spend any money as they work on the Pre. I’d much rather they get the Pre working just right before releasing it into the wild.

Remember this little company called Apple? A decade ago you couldn’t read the word “Apple” without it being followed by “the beleaguered company”. Rumors flying around that they were going to disappear. Other rumors that Sun Microsystems was going to buy them. Remember when Microsoft dumped a bunch of money into Apple? Poor Apple…I feel for that company that has struggled only to fail (I hope you can detect my sarcastic tone in that last statement).

So what do we have with Palm? A company that once had a great product but failed to innovate for a while. They saw the writing on the wall and decided to step it up. The Palm Pro (running the new Windows Mobile 6.1) has been called the best phone running Window Mobile by some. They decided to use an entirely new OS for the Pre that will make it much more usable instead up updating the current OS. They’re actually TRYING now (rather than resting on their laurels and coasting along). Being competitive isn’t cheap. Should things turn out less than stellar for Palm and sales don’t pop as much as everyone expects, I highly doubt they’ll disappear. There are enough companies out there with enough cash to come in and snag a great deal. I mean, c’mon…wouldn’t you like to have a product with a cult following? I know I would…

And there ya go. Before we all start running around screaming and crying about Palm’s demise, let’s look at all the facts and look at the realities of running a business. I highly doubt Palm is going to disappear.