Palm CEO defends company, likes its chances

In a long-ranging interview with CNN Money, Palm CEO Jon Rubinstein acknowledged the company has had some missteps but he remains confident in its ability to mount a comeback.

Of course, you’d expect any CEO of a public company to blow smoke up your backside when things aren’t going well. Make no mistake, things aren’t going well for Palm. The Pre and Pixi were supposed to be runaway successes that helped the company regained relevance but consumers ignored these handsets. Last quarter, the company shipped nearly a million handsets to carriers but only 408,000 were actually purchased by customers. So Jon, was it a mistake to launch exclusively with Sprint?

They were willing to invest significant marketing dollars. But the quid pro quo for that is that we had to do an exclusive with Sprint. Now, if I sit today and I kind of roll back the clock and go, okay, now if I could have launched to October with Verizon, and done shorter exclusive with Sprint, and the world would be completely different today, yeah, I mean, that’s easy to say. But you don’t know these things at the time. And Sprint has been a really good partner for Palm. They continue to be a really good partner for Palm.

He’s previously said he thinks the Pre Plus could have been as successful as the Droid if it had launched on Verizon first. I’m sick of this wishy washy “hindsight is 20/20” horse apples – everyone and their mom knew the exclusive deal with Sprint was going to be a weakness. I don’t blame Palm because it probably got the best upfront deal for handsets, but it traded short-term cash for long-term relevance. Even T-Mobile may have been a better choice because at least then it would have given Palm a jump start on its GSM-based European push.

Is it too late for Palm to push back to profitability? Rubinstein said the major issue is economies of scale, but the company is investing heavily in research and development, which will pay off down the road. He’s seen this type of situation before at Apple, Rubinstein said.

When I got to Apple the company was dying. We brought out the iMac, and the company was really successful, and then the economy cratered, and we went through a major dip, which took like two years to dig our way out of. And during that time period we invested very heavily in R&D and Wall Street was very unhappy with us, because the numbers looked ugly. But then when the economy turned, we had a bunch of really cool products ready to go, the iPod being one of them, and the company quickly scaled up to the point where the economics just made sense.

Hop on over with the via link to read the rest of the interview, it’s well worth your time.

[Via CNN Money]

  • anonymous

    The exclusivity with Sprint wasn’t even close to the problem with the launch of the Pre. It was the lack of inventory, along with the lack of apps that killed the Pre and Pixi. To say this would have been different with an initial release on VZ, is plainly ignoring the facts, and what customers have said about the device. I have a Pre, and I love it, but the biggest issue customers complained, and indeed still complain about, is the lack of applications, and quality control of the device along with several other phone specific features it was missing. Many customers have gone through at least two devices in order to get one that is reliable and stable. Let’s not forget the amount of people who just didn’t want a Palm product because the last several Treo versions were horrible devices. The Droid, in my opinion, would have never been as big a hit if it was released with WebOS. The fact it was released with a new, not available on any device, version of Android, and the vast amount of apps available made it so desirable. And let’s not forget the vast amounts of money VZ spent on advertizing the device before launch, much the same way Apple hyped the iPhone. Sprint’s biggest mistake on the Pre was not putting forth some major advertizing dollars to hype it, and not giving employees the phone to show off to their friends and family. Palm, and this author, need to stop blaming Sprint for Palm’s lack luster performance. And if it would’ve been so much better on VZ, then why has it been so dismal since VZ released it. It’s an updated device, right? Shouldn’t it be doing much better with VZ’s advertizing machine, and majority share holding of customers? Both Sprint and VZ can’t give the device away. That’s Sprint’s fault?? The iPhone is on a suppremely lower quality network with AT&T, but they still sell the heck out of them. And I don’t remember AT&T advertizing it at all. It was, wait for it, the device manufacturer that came up with the awesome advertizing campain. Palm has all these people from Apple, maybe they should take a page for the Apple play book, and come up with a good advertizing campain, and match it with a superior product.

  • anonymous II

    I completely agree with anonymous. In addition, I think the Pre comes across as a rather underwhelming device. That 3.2″ screen is far from spectacular and the device as originally manufactured felt cheap and plasticy. Couple that with poor advertising both on the part of Sprint and Palm which failed to effectively communicate the strength of the device – the OS. I considered buying one myself, but the 3 out of 5 average customer rating and nearly endless complaints about faulty hardware scared me away. It is absurd to try to pin Palm’s failures on Sprint alone.

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