Rubinstein on why Pre is not Selling

Dave Whalen and I just returned from a very successful meeting with Verizon Wireless, where they acknowledged that their execution of our launch was below expectations and recommitted to working with us to improve sales. To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products. Early results from the stores have already shown improvement on product knowledge and sales week over week. You may have also seen a growing number of Palm ads on billboards, bus shelters, buses, and subway stations-all getting the word out about Palm.

How hard can it be to explain multitasking?

link: WSJ Posts Palm CEO’s Letter to Employees

Palm's Forecast

full-year revenue would be “well below” its previous target of $1.6 billion to $1.8 billion. Wall Street was expecting $1.6 billion

If we assume $1 billion/yr. revenues, that works out to about 3 million smartphones a year out of a market that Gartner just forecast to be 215 million this year. That gives Palm just 1.4% share of smartphones.

The WebOS is a fine piece of code, but one has to understand that success in this business is not just doing something right. You have to do everything right:

  • Nokia has great distribution and logistics, not so good software or platform story
  • Palm has great software, not so good distribution or platform
  • RIM has great distribution and service, not so great software
  • Android has good software but not great integration of solution
  • Apple’s software and platform are great, but distribution is still weak
  • Microsoft has nothing good at all

The question of acquisition invariably comes up. The obvious answer would be to pair Palm with somebody who needs what they have and who has what they don’t. Unfortunately no perfect fit arises.

UPDATE 3-Palm cuts revenue view on weak phone sales | Reuters

But… it has multitasking!

Palm warns of 30% miss on estimates.

Feb. 25 (Bloomberg) — Palm Inc. said it expects that adjusted revenue for the third quarter of fiscal year 2010 will be in the range of $300 million to $320 million. The average estimate of analyts surveyed by Bloomberg was for adjusted third-quarter revenue of $409.3 million. The company said revenue for the quarter and full year are being affected by “slower than expected consumer adoption of the company’s products.”

link: Palm Sees Third-Quarter Adjusted Revenue $300 Mln to $320 Mln –

App Stores Grow Dramatically, Ovi Climbs to Third Place

The last four months have seen tremendous app growth. Apple grew by 59k apps while Android added nearly 10k and Nokia added 5.5k apps to Ovi.

As a percent, Palm grew the fastest with 1,352%, followed by Ovi with 827%. The slowest growing was actually Blackberry App World with a mere 56% growth.

More curious is the popularity of certain categories. Games and Books are dominant in the App Store, while Personalization and Music account for more than half of Ovi (ringtones and wallpapers?)

Finally, in terms of catalog ranking overall, Ovi climbed the league table to third spot behind Apple and Android and overtaking Blackberry App World. Palm overtook Windows Mobile Marketplace which is now dead last with 693 apps.

link: Distimo Mobile World Congress 2010 Presentation – Mobile Application Stores State of Play

Smartphone Penetration in the US

This is active users in the US only.

iPhone now tops WinMo and is second only to RIM. The only line that is going down is the dumbphone category which lost 10 million users.

Those users were mostly switched to RIM and Apple. RIM gained about 4.3 million users and Apple gained about 3.5 million.

Android user base still lowest of all platforms and increased by about 0.6 million. They are likely to beat Palm however next few quarters. At this rate however it’s very hard to see an installed base that is going to challenge Apple for a long time.

Palm gained 0.44 million. Symbian gained 0.41 million. WinMo gained 0.3 million.

With a 1.4 multiplier for iPod Touch, the platform would have 12.5 million users, pretty near RIM’s base. We might see that tipping over next quarter.