Smart Phone Death Match

You know, I’ve been doing a lot of thinking. I said a while back that I really don’t think that the Pre is going to sell well. I think I need to qualify this statement considerably. When I say that I don’t think the Pre is going to sell well, I’m comparing it to the IPhone. The IPhone has sold spectacularly well, and the IPod Touch has had a halo affect on IPhone sales (same OS, same apps). The Pre doesn’t have that. Also the current Pre is CDMA only. It will sell in the US. Palm could sell it in Canada too, and probably will, but most of the rest of the world is GSM, and unless they have a GSM version, they have no hope of matching IPhone sales.

And of course my definition of “selling well” may not be the same as Palm’s definition. Say Palm needs to sell 250,000 units per year to make a profit, and save the company. If that’s what they need, and they make or exceed that level, then they are doing well, even if their sales are no where near as good as Apple’s are with the IPhone.

And of course there’s the question of whether the Pre was ever meant to be competition to the IPhone. Maybe it was aimed at RIM instead, and if so, comparing it to the IPhone isn’t fair. Maybe it was aimed at Windows Mobile and Symbian. I spent some time trying to remember exactly what the folks at Palm said, and I didn’t remember any of them specifically saying that the Pre was aimed at the IPhone. I do remember most of the usual suspects saying that, but we know how accurate they can be – several of them said that Apple was planning to sell 1 million IPhones on the first weekend it was available, when Apple hadn’t even built a million phones for the launch.

So is the Pre designed to compete directly with the IPhone? I went to Palm’s web page, read the features and specifications, and my conclusion is that it isn’t. What it’s designed to compete with is Blackberry and WinMobile phones, and against them, it has some real advantages. Oh, Palm wasn’t shy about borrowing things from Apple, like the touch screen, or the Apps store. But let’s face it, considering what a success the IPhone has been, anyone who doesn’t borrow things from Apple would have to be an idiot.

So, yes, I think that the Pre, based on it’s own merits, should sell quite well. Palm won’t sell as many phones as Apple. But Palm probably doesn’t need to sell as many phones as Apple did to have a hit. Hell, Apple probably didn’t need to sell as many phones as they did to have a hit (not that you hear them complaining).

Will Palm be able to sell enough phones to stay in business? I don’t know. I hope so. Apple and RIM need competition badly. I don’t know if any of you have used a Blackberry. I have. They are a terrible phone. And the keyboard? It’s total crap. If Palm can take some market share from RIM, RIM will have to get off their duffs and do something. Apple hasn’t shown any signs of getting fat and stupid yet, but the competition they’ve had has been so incompetent, that I wouldn’t blame them if they did. So I hope that the Pre helps Sprint keep customers who might otherwise switch to AT&T for the IPhone. Apple needs competition. And while the Pre doesn’t really direct competition with the IPhone on features and capabilities, it looks like a hell of a lot better phone than anyone else has come up with so far.

The real loser will be WinMobile. If you compare a Pre with a WinMobile phone, the Pre looks incredible, and since it has the corporate Outlook/Exchange features, who needs a Windows phone?

As to Android, I don’t see the Pre and the Android phones as competitors. Pre is going to be business phone. Android is going to be a consumer phone, thanks to the Google name. That said, while Android and the IPhone are both consumer phones, they don’t really compete, and neither competes with the Pre. Where it gets interesting is that all of them encroach on WinMobile territory, and all of them attract new users to smart phones, but for different reasons.

It should be interesting seeing how it all works out. After all, Nokia isn’t going to roll over and play dead, nor is Sony Erricson, or HTC, or for that matter Microsoft (though their financial issues may limit their capabilities). And you can bet that RIM is making it’s plans. Jim Balsillie needs lots of money for his attempt to bring an NHL team to Hamilton Ontario, and RIM is the foundation of his fortune.

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  1. It is an interesting exercise to compare the Pre webOS and windows mobile. I tend to go with things that have a long history as a first step and then depending on several other variables such as short and long term requirements, cost of ownership, and others tend to round out the decision process. I think it is too soon to jump into the Palm Pre pool at this moment and with the recent release of windows mobile 6.5 and announcement of the Zune HD, I will likely stick with Microsoft technologies and be hopeful that windows mobile 7 lives up to the fact that it is a major release. I don't think we will be disappointed. But, this is definitely an interesting time for mobile os's and the next generation devices (netbooks, etc). In the end us consumer will win because we have incredible technology that fits into our hands doing things not thought possible just a few years ago.

  2. Stick with Microsoft technology if you wish. I think that you are making a mistake, and a costly one.

    Let's consider the two technologies you mentioned.

    Windows Mobile is unsaleable, except in special circumstances (Exchange Shop) and even then Blackberry sells better.

    Zune is almost unsaleable too. If the customer has a lot of Microsoft gear (XBox 360, Windows gaming computer) a Zune might make sense, but this is a very limited market.

    As to Windows Mobile 7 living up to it's promise, no Microsoft Operating system has ever lived up to it's promise, going all the way back to DOS 2.0 (yes, I'm that old). So I think that everyone who's counting on Windows Mobile 7 is going to be disappointed.

    Microsoft as a company has severe problems. Go read their SEC filings. Microsoft right now is where GM was 3 years ago. Unless drastic action is taken, Microsoft may go bankrupt. Like GM, Microsoft doesn't see the problem, so any action is likely to be too little, and too late.

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