I don't blog anymore. Not here anyways.
But this thought has been rattling around long enough that I had to dump it out finally.
Palm is going to make some good headway against Apple with their Pre. A lot of people are going to buy the cheaper, more capable device, even with the iPhone now selling for $99. Its gonna look like Palm might just be able to pull it off and actually kill the iPhone, as some are predicting now. Having Verizon in their corner is going to be a big driver for a lot of this adoption. AT&T is not doing Apple any favors. In fact, some might say that AT&T is costing Apple in this fight.
And this is how Apple is going to absolutely slaughter Palm unless Palm gets their act together immediately.
Apple will not renew their exclusivity with AT&T. Apple is not going to renew their exclusivity with other carriers either. In fact, Apple is not going to renew with the other carriers at all, or even go with new carriers.
Apple will simply start selling the handsets like they sell everything else. Direct to consumers.
They will lose a little bit of money in subsidies and minutes, but this will be more than offset by increased adoption and App Store sales.
And Palm will get trampled in the process.
That's my prediction.
As the scrappy upstart, I had expected Palm to sell a carrier free version of the Pre. This was their game with the Treo and their other devices and it worked well for them. Didn't hurt that those devices were pretty awesome for a long time (I still think the Treo 90 was one of the best phones I've ever owned). Strategically, I think they would be served well by getting their devices into as many retail outlets as possible as quickly as possible without any stupid carrier restrictions. I don't think it is a huge hurdle for a customer to call their phone company after buying a phone at Walmart and say "hey, I need a data plan" or better, to rely on Wifi connectivity and avoid the phone companies all together.
I don't see Palm succeeding if they try to out-Apple Apple. This is the game they are playing now. They are betting that their device is better than Apple's, than their phone partnership is better than Apple's, that their marketing is better than Apple's, etc. Too many bets. Going direct to retail with an unlocked device is one way to reduce the number of bets that they are making and put some serious pressure on Apple.
At best, I think the current strategy might be enough to get them a 4th or 5th place finish in this market. At worst, it might guarantee that the Pre is the last device we ever see out of Palm.
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