Palm gets downgraded to ‘underperform’

Remember WebOs?  Palm’s ‘revolutionary’  mobile operating system supposed to give the Palm Pre the muscle to take on the iPhone, Blackberry, and the hoards of Android phones now coming out of every direction? Maybe you remember the scary blonde girl with translucent skin that maybe took a few too many Xanax, telling you to buy the Palm Pre? Ah, yes, you remember now. Well, surprisingly enough, all has not been well for Palm.

Bank of America Merrill Lynch analyst Vivek Arya recently downgraded Palm’s stock from a buy to under perform. “Palm’s superior platform features have not translated into sufficient carrier support and consumer demand, and we are concerned the window of opportunity may be closing as Google’s Android ecosystem gains ground, Research in Motion revitalizes its portfolio, iPhone increases its presence, and as Microsoft reboots its efforts with Windows Phone 7.”  That about sums it up. The sales figures for the Palm Pre, and Pixi have been less than stellar, and with the annoyingly slow rate of the new WebOS devices being pushed out, this cant be a complete shock to everyone. To make matters even worse, Palm’s price targets were cut down to $10 from $20. That’s gotta hurt.

Oh, and it gets worse. Suposedly the sales figures from the new Palm Pre Plus, and Palm Pixi Plus are so poor that Verizon Wireless may be  “evaluating the potential for destocking,” says one analyst. This was later dissmissed by Verizon, saying, “The Palm devices are an important component in our smartphone line-up.” Even if Verizon has no intention of canning the Palm devices, would it really be surprising for someone to hear that the Droid and Blackberries are being chose before the PPP’s?

The WebOs itself, is beautifully done. The multitasking capabilities, accompanied with the intuitive ‘card’ interface make it attractive, but Palm, not WebOs, is the one who has failed us. Marketing is a big one. Sure the Palm commercials are memorable, but more in the way I want to kick puppies, not buy you’re damn phone. There may be only a handful of Snapdragon handsets out in the world, but that is something that Palm needs to look into.  As far as hardware goes, give us more! How disappointing it must have been for people to see that all Palm could come up with at CES last year was just a beefed up Palm Pre. Get creative with some devices! Give us a beast of a phone with a  great processor, great specs, interesting form factor, and some decent marketing, and Palm, you may be back in business.

The stock is down .37%, at 8.06, after hours.

[Via: WSJ, MarketWatch ]

  • Feech

    What they need to do is get out of the hardware business and let HTC make phones for them..License your awesome OS, stop making phones. Maybe put the WebOS on a tablet, they can’t mess that up. 8 months after debuting the Pre and Pixie is all they have? In that same time frame how many Android handsets has HTC released or are upcoming?

    • Blake Stimac

      i actually love the idea of WebOs on a tablet.

  • Greg

    Exactly.. How could a company, ready to die, come out with this OS that works way better than any other totally miss the marketing boat. How long did we look at this woman with a phone doing what and integrating what help sell phones? The public needs to see what it will do, get the OS in the hands of the developers so you have some apps to compete with android and iphone. Like the article stated, start coming out with powerful handsets that outperform the competition. I have had my pre since release and thought Palm would really get this thing moving. It has been slow with sparse apps, who needs a million tip calculators. If it was not for the rooting and homebrew apps I would have given up a long time ago. I am waiting for then new android phones to come to sprint and then good bye pre (betamax of the mobile phones)..

  • Marin Perez

    They need to be bought by Nokia and then the masses can see how good webOS is at scale.

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