Defcon Kekekekekakl (blog)

Palm, carriers and HP

Back quite some years ago, various vendors and manufacturers were coming out with this new kind of device. They initially came under one of two names, "HPC" short for hand-held personal computer, and "PDA", the personal digital assistant. I had just gotten into computers and communication, and at the time I was just getting into gadgets. I really could not get a grasp on what good one of these PDA devices was supposed to be. But I decided the only way to find out was to shell out the money and buy one. Seeing as US Robotics (the modem-makers) had been one of the first on the market with one of these, and was still considered the best option when not counting the Apple Newton, I went with a US Robotics Palm Pilot (Personal, I believe).

This was my first ever portable computing platform. And I really could not figure out what I needed it for, even after getting it. But gradually I started using it more an more for the calendaring functions. And then one day, I found the true killer app in my view, an application that allowed me to read books on the PDA! That said, books is stretching it, the app for the early Palm Pilots was basically a "souped up" text-file viewer. However, this was enough of a killer that I bought the 3Com Palm III not long after 3Com acquired US Robotics and took over production.

Two years later, around 2000, the company Palm inc. was created, and the Palm-device-related activities spun off from 3Com. This new company did a lot of things right, things that kept me using, promoting and buying new Palm devices. Firstly, they realized that a strong foothold in the world of application developers was essentials. So they created accessible SDK's, published API specifications, gave out device emulators, made an adapted CodeWeaver IDE available, and made it fully possible to start Palm software development with no lead cost apart from the need to own a device (to be allowd the use of ROM images for the emulators). This acknowledgement of the developers, and the strong support made available to them was one of the strong sides of Palm inc, and for a good while also for the spring-off, PalmSource. Unfortunately, PalmSource took way too long focusing on the development of the "Next generation PalmOS". In the time spent developing Palm OS 6, the traditional PalmOS was showing age, and devices coming out were cautiously build to "old spec", in wait on the new OS. PalmSource almost folded, and became a part of ACCESS, while Palm inc moved on to using MS Windows CE/PocketPC as they no longer could wait for the new OS to become usable. PalmOS 5 was used for "legacy" and "entry" products like the Centro, while the "high-end" and "modern" devices like Treo ended up as Windows-based devices. And with that, the developer-support faded. Drastically.

The second important factor that kept me into Palm devices, was that they up to around 2006 had practically simultaneous international launch of any new product. If a new Palm device was announced to arrive "early next year" at CES or CeBIT, that would be fact, no matter where in the world you were, as long as Palm's were sold at all in the country. On the devices with cellular or other telephony functions there was naturally differing models for different types of communication networks. But the devices were still launched as close to simultaneous as possible.

Now, this long and convoluted lead brings me to todays situation and frustration with Palm. Some time back the company stood on the verge of coming back to life, and conquer the world of personal data and communication devices. Palm inc had once more started doing software development themselves, and announced to the world the webOS. This was very fresh approach to an operating system for what I will keep calling PDCD's. User interaction was quite different from other offerings, and the development model was heavily centered around presentation-oriented coding, using XHTML and a JavaScript framework (mojo). The look and feel of the operating system took the gadget-nerd-world by storm, actually silencing all mention of the iPhone and Android for a good length of time (apart for mentions of reference). And Palm said they were coming out with the operating system on a brand new hardware platform, the Palm Pre. The Pre was reviewed as, and on images is, a really beautiful piece of communication device, and with the correct launch, this was destined to be huge!

While I, and a very large portion of fellow gadget-hungry people around the world, were eagerly awaiting the launch of the Palm Pre, the company came through and proved true to their roots.e SDK was made freely available to registered developers (registration free of charge and obligation), an emulator was made available, and community support was strong. But the wait was long.

And, personally I am still waiting. Palm failed. They failed miserably, The launch of the device was an absolute disaster. Why? When the device was finally made available, it was only available for sale from one single cellphone carrier in the USA. Exclusively. When you have thousands upon thousands of willing customers waiting for your product, what better way of devastating sales than not making the product available to them? As if that disaster was not enough, Palm had the messed-up idea that the rest of the world operates like the USA, where communication devices are sold by the carriers, and that carriers demand exclusivity in the product! When the half-year-after-us-launch wait for a GSM version was starting to come to an end, the Pre was not coming up for sale. It was coming as a tie-in to a very select few carriers in the UK, Spain and Germany. Still no product available to their actual customers! I will dabble a bit in speculation, but I dread that the reason the GSM Pre was made available on O2 was because Telefónica/O2 was the only carrier outside the USA that behaves like an american carrier.

Which brings me to the topic of carrier tie-in and exclusivity. As a Norwegian, this concept is weird to me. And wrong. Yes, we have subsidized communication devices in Norway. We even have vendor/carrier branded devices. But not being able to purchase a device off contract, and the concept of carrier exclusivity is absolutely unheard of. I really cannot see how such a screwed up market model has any benefits at all. Yes, I see that a carrier may use a product under exclusivity as a teaser to pull in customers. But by limiting the use, the availability of contract options, and the possibility of switching carriers on existing devices are really limiting the scope of the customer base. And for the device manufacturers, I cannot see this as anything other than a disaster! Talk about limiting the options and scope! The practice that I am used to, and one that is very common in Europe at least, is that devices are freely available for purchase off contract, but also as subsidized when tied to a contract from a carrier. The subsidized device will commonly be carrier-locked for a year-or-so. This way the customers get the freedom to choose, and great availability, while at the same time the carriers get lead-in advantages and customer tie-in.

Carrier exclusivity can be somehow justified based on business-to-business advertisement relations, and to a degree the concern of distribution. A carrier having exclusivity will most likely pour bucketloads of money into the advertisement of the product, allowing the manufacturer to reduce its marketing budget. And thanks to the american system of selling communication devices, it is cheaper and easier to let the carrier handle physical distribution of products than it would be to set up a distribution network. The first, advertisement, is a valid concern. The second however, distribution, is absolutely counter to how any other product is being distributed. Why are phones and other communication devices distributed by the manufacturer or the carrier, when the successful model for any other product is to let the dealerships, outlets, sales chains and direct-to-customer vendors handle the issue of distribution and distribution cost? It honestly makes no sense at all, and I believe it is a direct effect of the carrier-lock-in principle of the USA.

After this rant about my view on carrier exclusivity, let me get back to Palm. I honestly believe that the reason Palm inc. quite nearly folded completely and went out with a silent puff, was their inability to bring their new product, the Pre, to the market. True, they put the device up for sale through Sprint in the USA. But by doing so, they completely missed their market! It is not a natural conclusion that all their economic issues had been resolved if they had done an open, cross-carrier, available-to-all launch of the product. But it is safe to conclude that the problems would not have been as prominent. Palm would have had more time, and most likely a bigger economic play if they had been able to actually get the product out to the customers.

We gadget-freaks are impatient people. If we can't have the product now, we get frustrated, and then loose interest. Having to wait for ages for a product to be launched through a limited set of channels is not a good route. The only product ever to be successful using this approach was the iPhone. The reason this approach worked for the iPhone, is because it is an iProduct, and iCustomers are used to, half expecting, this kind of customer abuse. And the iCustomers bought the iPhone in such masses that it reached critical mass, and other, regular customers saw the quality and functionality of the iProduct, and thus saw justification of the customer abuse.

But, the gadget customer in general is not an iCustomer. So other gadgets need a more open, non-abusive approach to their customers to be able to get their initial momentum going. Not acknowledging this leads to product failure. And if your business relies on that product, it leads to business failure. Just look at Palm.

Recently, Hewlett Packard won the bid to purchase the faltering Palm. This is a good thing, a really good one. You see, HP used to be an engineering company, and has retained a good bit of their roots. This means that they know the value of keeping good relations with developers. They even know the importance of a good Open Source presence. Which lets me believe that HP will be able to keep the openness and developer support that has been a trait of the old Palm. HP also has a history of high quality mobility products, originally from the name Compaq. Just look at the C-series handheld MIPS-PC's and the iPaq series of devices, that defined the industry standard for Windows CE based PDA's.

I will close off with my call to HP. Please bring the Palm products to market! Please do not shut them in in a walled garden, out of reach of your customers. With the Palm Pre plus and Palm Pixi plus in your possession, HP now has (just like Palm did) the opportunity to get back into the market of PCDC's! What they need to do is: GET THEM INTO THE MARKET, AND TO THE CUSTOMER.