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News

Palm Investor: Pre to Prey on iPhone

Friday, March 6th, 2009 at 11:38 PM - by Jeff Gamet

What's the one device that could get people to dump their iPhones? According to Palm backer Roger McNamee, that would be Palm's upcoming Pre handheld. Mr. McNamee is certain that once iPhone owners get a taste of the Pre, they'll be ready to switch as soon as their AT&T contracts run out, according to Bloomberg.

 

"You know the beautiful thing: June 29, 2009, is the two-year anniversary of the first shipment of the iPhone. Not one of those people will still be using an iPhone a month later," Mr. McNamee said.

The likelihood that Mr. McNamee is right, however, seems slim. Odds are that at least a few iPhone owners won't be enamored with Palm's Pre, and some that would otherwise consider the multimedia smartphone might be concerned about buying a device from a company that looks to be stumbling in the market.

Palm has seen US$650 million in losses over the past six quarters, and preliminary reports for the company's third quarter sales fell short of analyst estimates by some 50 percent. Those numbers have some people concerned about Palm's future, but not Mr. McNamee. He sees Palm's technology as years ahead of the competition and as a draw for new customers.

RIM's Blackberry is relying on 13 year old technology for its operating system, according to Mr. McNamee, and Apple's iPhone operating system uses nine year old technology. In comparison, he sees the Pre's OS as just the ticket to give Palm the boost it needs.

"Think about it -- If you bought the first iPhone, you bought it because you wanted the coolest product on the market," he said. "Your two-year contract has just expired. Look around. Tell me what they're going to buy."

 

23 comments from the community.

You can post your own below.

Tiger said:

March 7th, 2009 at 7:58 AM

Somebody put that on the Apple Death Knell counter, it fits right in. And is just as laughable. The same was said of RIMs Blackberry Storm, which in most circles now has the nickname Drizzle. The iPhone OS may include nine year old technology, but that’s because it’s built on Mac OSX which was introduced nine years ago and has been adapted to fit the handheld device. Palm doesn’t create computer OSes, they barely create a handheld OS.

By the time my iPhone contract runs out, the software will most likely have been upgraded to the point where a full version OSX is running, I will have an active desktop, can mount HDs wirelessly, have complete access to my desktop computer and given the power of iChat and H.264, will have full-blown video conferencing on my phone bought in 2009.

The ONE and only time I even considered a Palm device, I went with a Handspring because it was clearly better, even if using the same OLD operating system. That PDA has sat in my office drawer unused for more than six years now. I got so frustrated with the PalmOS and how inefficient it was, I threw the damn thing in the drawer.

   Quote

PXT said:

March 8th, 2009 at 7:49 AM

I followed the ‘halo’ path from iTunes to iPod to iPhone. The iPod is the best in its class by a long way. Like many other people, the iPhone’s value to me comes in combining the phone tools I need with my iPod-driven life, with some smartphone basics such as email and browsing thrown in as bonuses. So unless they can convince me away from iTunes/iPod, they cannot take my iPhone from me.

   Quote

Boscher said:

March 8th, 2009 at 10:49 AM

I work in IT at a large firm and I have to support a large amount of devices…none of which are iPhones.  None of which work well.  EVERYONE asks “When can we get the iPhone??” and the firm still has not approved it yet.  As soon as they do, there is not going to be one person in our firm without one.  Our CIO was anti-Apple…hated the iPhone.  Then he got one.  Now it is “the best device” he has ever had.  I admit, it is not a perfect phone and I never expected it to be…but they would have to pry my iPhone out of my dead cold hands before I used anything else.

   Quote

cramar said:

March 8th, 2009 at 3:58 PM

Whatya smokin’, McNamee?  It’s not about a telephone, stupid!

How many apps does the average iPhone user have? How many do the top 20% have on their iPhones? Everyone I know with an iPhone has dozens or scores of apps. So all these people are going to dump their iPhone and all those cool apps just to get a Pre?  It’s all in the OS and the Apps, McNamee. The Pre will never have the market penetration to rivel the App Store. As Elbert Hubbard once wrote, ““It’s the original noise that counts. Most people are merely echoes.” Apple has an insurmountable lead. Palm is only an echo in the smart-phone market now.

   Quote

dave said:

March 8th, 2009 at 9:52 PM

The palm OS was developed with webkit which apple developed and set free. apple has little to fear from Palm. That Roger McNamee doesnt know this is makes him a joke

   Quote

Photodan said:

March 8th, 2009 at 10:36 PM

Boy, it sure is easy to make broad proclamations about a product that isn’t even shipping.

Bryan, I think we need a “_____Killer” counter.

-Dan

   Quote

elehcdn said:

March 9th, 2009 at 5:25 AM

Isn’t this the same company that cancelled the Foleo 5 months after its release? Palm once again shows that it has its finger fully on the pulse of the portable electronics/cell phone business.

   Quote

Bilbo63 said:

March 9th, 2009 at 8:43 AM

Even if the Pre rocks, they won’t be stealing any iPhone customers in Canada for at least two years due to the fact we’re locked into three year contracts.  I’ll take a good look at the Blackberry Storm when my contract is up only because they are a Canadian company. That said, I’ve been so happy with my iPhone, anything else will have to knock my socks off to even consider switching.

   Quote

Tiger said:

March 9th, 2009 at 9:32 AM

By the way, what Apps are available? Will they be in third, fourth or fifth place for #s? Apple’s already stolen first place from Windows Mobile.

http://arstechnica.com/apple/news/2009/03/iphone-now-has-more-applications-than-windows-mobile.ars

   Quote

Andrew said:

March 9th, 2009 at 3:04 PM

iPhone is a great product that is likely to retain many of its users.  BlackBerry also has a loyal following and lost most of those it is likely to lose (to the iPhone).

No matter how good the Pre is, there is only room for one or two systems at the top of the sales heap, and with RIM’s new app store, Apple and RIM are likely to remain in competition for those two spots.

   Quote

DS said:

March 9th, 2009 at 4:28 PM

“Apple has an insurmountable lead. Palm is only an echo in the smart-phone market now.”

No they don’t. Once Palm had an “insurmountable” lead and look what happened…

The iPhone is going nowhere but you know what? The Pre actually looks a good product. If (and it’s a big if) Palm can deliver on the promise, the Pre will do good business. I’m certainly interested as I don’t fancy the iPhone’s lock-in to a single provider (I’m in the UK). Also, as seismic as iPhone may have been in the US, it wasn’t quite the same in Europe, where many of the features that we like just didn’t happen in iPhone, or even the the 3G: dull camera; bad SMS interface; what, no MS?; Bluetooth? Ha ha; cut and paste? ahem…

Don’t get me wrong, the iPhone is a fabuluos piece of design, but Apple will have to do some serious work this year to keep the iPhone ahead of rthe game. It’s certainly not a shoo-in.

   Quote

Bilbo63 said:

March 9th, 2009 at 4:41 PM

As soon as you think that you have an “insurmountable” lead, someone comes along and eats your lunch. To stay on top, you can never rest on your laurels.

In my opinion to turn up the heat on the competitors, Apple needs an inexpensive “data-free” phone, basically an iPod Touch plus the cell phone capabilities. I love my iphone and what it can do, but I hate the big monthly bill. I know lots of people who cannot afford the monthly bills, but would be thrilled to have a “data-free” iPhone.  Why not let those who cannot afford the big cellular bills join the party?

Just my opinion… I’ve been wrong before, just ask my ex-wife!

   Quote

macmikey said:

March 9th, 2009 at 11:30 PM

Bilbo63: “Apple needs an inexpensive ‘data-free’ phone, basically an iPod Touch plus the cell phone capabilities.”

What are you talking about? Like, an iPhone? “Data-free phone…” You keep using those words. I do not think they mean what you think they mean. wink


DS: I have no idea what you mean by “iPhone is going nowhere.” I’m not arguing with this (exactly), but I am saying you aren’t corroborating this claim with any information or explanation.

Your point that competition is good for Apple, however, is worth seconding. This is usually what it takes to keep a company “honest” in its efforts to improve its products.

   Quote

Bilbo63 said:

March 10th, 2009 at 12:59 AM

What am I talking about?

When your iPhone is not connected to a WiFi network, Safari requires data, Mail requires data, Maps requires data, Visual Voicemail requires data. I am suggesting an iPhone that does not use the cellular network for ANY data, just talk time which is reasonably inexpensive. It’s the cost of data that makes the iPhone so expensive to use. I happen to feel that there is a big market that Apple could scoop if the monthly bills from the carriers weren’t so darn high.

   Quote

DS said:

March 10th, 2009 at 8:14 AM

When I say “iPhone is going nowhere” I mean it’s not going to diappear off the radar - it’s here and will continue to be (I realise reading back that it could be misconstrued as the iPhone suffering form inertia, but that’s not the sense I meant)

   Quote

DS said:

March 10th, 2009 at 10:43 AM

God, my keyboard is annoying me - all those typos >{

   Quote

Tiger said:

March 10th, 2009 at 1:58 PM

” I am suggesting an iPhone that does not use the cellular network for ANY data, just talk time which is reasonably inexpensive.”

So, you think Apple should be making disposable pay as you go phones? Why the heck would they call it an iPhone then? It wouldn’t remotely even resemble an iPhone at that point. Then Apple would be accused of making a product that is so environmentally unfriendly and get hammered. There are only two model iPhones currently. They do data. On an unlimited plan at one price. In fact, I “downgraded” my cell phone from a Samsung slide phone to the iPhone 3G. I’m paying less for WAY more capability.

   Quote

Tiger said:

March 10th, 2009 at 2:01 PM

Oh, and Mr. MacNamee just got dissed by Palm.

http://news.cnet.com/8301-1035_3-10192709-94.html?tag=newsEditorsPicksArea.0

   Quote

Bilbo63 said:

March 10th, 2009 at 2:09 PM

A disposable phone? No, I’m not suggesting that.  Does it HAVE to be called an iPhone? No of course it doesn’t.

All I’m suggesting is a phone that is identical in every way with the current iPhone EXCEPT all web based data services can only be used in WiFi enabled areas and thus would not require an expensive data plan.  This isn’t really that complicated. I know many people that would love to ditch their garbage phone for an iPhone, but their monthly budget cannot afford a data plan.

It’s not just the data features that make the iPhone so great. It’s a terrific iPod, it syncs your contacts and calendars and has a great OS… Plus it works the way you want it to work.

   Quote

Bilbo63 said:

March 10th, 2009 at 2:20 PM

Not everyone needs, wants or can afford a data munching smart phone… But they do want a really good phone that seamlessly manages their contacts, calendars and music etc. Before the iPhone, I couldn’t find a single phone I liked that did all of that and did it well.

You can afford a data plan which is wonderful. While I can afford a data plan, I don’t really “need” a data plan. I could manage just fine relying on WiFi for all of my data services and save a few extra bucks each month. Apple can still charge the same money for the phone itself. As far as I’m concerned, it’s worth it.

   Quote

Tiger said:

March 10th, 2009 at 3:06 PM

So, basically, a cell-phone enabled iTouch is what you’re talking about. I think I read about a few people who had figured that out by putting a Skype version on their iPod Touch with the mic/headphone combination….however (and I’m NOT saying this with any regard of judgement of good or bad, right or wrong), I think it would pretty much fly in the face of Apple’s contract with AT&T, subsidies, and competitive products that would undermine that deal. So, while it COULD happen, it’s unlikely it WOULD until that deal is over.

   Quote

Bilbo63 said:

March 10th, 2009 at 4:41 PM

Tiger wrote: “So, basically, a cell-phone enabled iTouch is what you?re talking about.”

Yes, that is correct, in fact that is what I said in my very first post. You must have missed that… it happens.

Yes, I too wondered whether it would violate an agreement with AT&T (or Rogers here in the great white north).

I do feel somewhat forced into a data plan that I don’t really want or need. Not to mention a THREE year contract! Times are tough and may get tougher. My wages have gone down while my expenses have gone up. My iPhone costs about four times per month of what my old “piece of crap” phone cost. 

Don’t get me wrong, I hated my old phone and I love my iPhone so while I’m pretty happy, I’d be happier with a few extra dollars in my pocket each month especially since I am a relatively light cell phone user.

Yes, I also have heard of work-arounds using a mic add-on and Skype on an iPod touch. That might be something that I’d consider, but I’d rather not hack and patch a solution together.

Cheers!

   Quote

Tiger said:

March 10th, 2009 at 8:36 PM

It’s not even a hack anymore. It’s available in the Apple App Store.

http://www.shapeservices.com/s4iphone/

   Quote

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