Pre faltering, Palm laying off employees? – UPDATES
  • 121 Comments
by John Biggs on September 30, 2009

scaled.the-end

When your smartphone drops from $299 ($199 with contract) to $79 over a summer, you have to wonder what’s going on. Two rumors are circulating this AM, one that Palm is laying off folks, perhaps in the Windows Mobile team.

UPDATE from Palm: “We are not laying people off. As we continue our transformation we are better aligning our staff with our business objectives.”

The estimated sales for the Pre topped out at somewhere under the 810,000 range (Palm reports it sold 810K units last quarter and states at least half of those where Pres) at the end of August and they went from $299 ($199 with contract) to about $79 in about eleven weeks. While this might be normal for a feature phone – the subsidy kicks in once they’re sure that the early adopters who simply must have the LG Chocolate have had their fix – this isn’t good for a smartphone that was supposed to be the lead invasion force for a new WebOS smartphone renaissance.

Finally, Palm has backed off over iTunes Syncing. The latest WebOS update doesn’t sync with iTunes and won’t be syncing with iTunes any time soon. After using brute force and then running to the USB standards body, the company may have finally given up.

The end of Palm will come quickly this time. They’ve been idling for too long – since about 2004, in fact – and if they can’t push through their first year with at least some modicum of success it’s over.

For more info about Palm’s numbers check out Jason’s post about the 810K figure.

Comments rss icon

  • If this is true I’m really disappointed I was really looking forward to what Palm was going to do with WebOS.

    • Palm is merely cutting their WinMo team… of course the morons at TechCrunch won’t tell you that.

      Palm Pre is the #1 bestseller for both Amazon.com and Best Buy Mobile.

    • It’s a shame but not unexpected. It’s a limited device with little appeal outside the US and not a lot of appeal there.

      • Hmmm, it’s already available on Sprint in the US, and rumored to be coming to Verizon and/or other US carriers as early as the beginning of 2010. It’s also available on Bell in Canada, coming to O2 in Germany on October 13, O2 in UK and Ireland on October 16th, and “soon” (no specific date yet) to Movistar in Spain and Latin America. Doesn’t sound like “little appeal”. Also, you clearly haven’t used it, since you say “It’s a limited device”… are you hiding under the iPhone rock or what?

        • No because I’m not a huge fan of the iPhone either.

          See the thing is no one really gives a shit about the UI and app stores, it’s all about what’s cool or what’s familiar. That’s why the iPhone – despite the massive hype – has limited appeal outside the US and gets its shit shoved in royally by Nokia and why the Pre suffers from that to an even greater extent because it doesn’t even have the hype.

          So once the iPhone/Pre novelty factor wears off they’re going to bomb – perhaps not in the US where the market is laughable – unless they start considering different form factors and configurations because something better always comes along.

          Bluntly, the Pre never had a chance.

          So it goes.

        • @Mark A.

          the iphone is going to “bomb” and has little appeal outside of the US? errr…. better check your stats again big guy.

      • > If this is true I’m really disappointed I was really looking forward to what Palm was going to do with WebOS.

        Yeah well, I’m really, really, REALLY looking forward to a day where CEO pay to average worker pay discrepancy isn’t at least 1000x. IT’s a crazy fracking world we live in babe, get used to it, nothing changes until collapse.

    • purchased a pre yesterday – love it! the new sprint unlimited any carrier mobile-mobile deal is also great.

  • I could see Palm being snatched up by a larger (foreign?) company, they certainly have some compelling potential with WebOS. Android makes this somewhat less likely, though I could see Lenovo or someone eying Palm.

  • Didn’t Apple dropped the price of the iPhone few months after it was released?

    • Yes, from $600 to $400, but that’s irrelevant. What IS relevant is the fact that Apple sells the iPhone 3G for only $99 currently. It doesn’t really matter how great a competing smartphone might be, it has to be priced competitively with the iPhone.

      However, the price can be deceptive. Reports showed that each Pre cost around $150 to build at launch. They’re only selling for $99 w/contract, but we don’t know how large a subsidy Sprint is paying to Palm, or if Sprint is buying the phones at a fixed-price regardless of the actual selling price. It could be Sprint who’s taking the hit here.

  • 375K Pre sold out of 810K phones reported?? the $79 was a promotion until yestarday; why you don’t site the facts?

    “The end of Palm will come quickly this time”

    They just got $350 million in new funding, if they die it won’t be anytime soon

    • They are pushing out new stock, basically diluting shareholder value for a rapid injection of cash. That is NOT good.

      • Doesn’t matter. a) Didn’t dilute it much (look it up) … b) It was a more than acceptable cost for the influx of capital for further product development. c) I don’t see Palm’s stock slump hardly at all when idiots like John Biggs report these stories… DO YOU?

    • Yeah, not to mention that in the quarter since the release of the Pre, Palm reported profits (non-GAAP, but still profits).

      Most of the hard work is behind them, now that they have a forward-thinking OS and decent hardware to go with it. Palm should be more profitable going forward, as they move the Pre into new markets and release the Pixi this fall.

      So yeah, I don’t know what John Biggs is talking about “the end” for. Clearly, he doesn’t have any understanding of Palm’s situation.

      • Most of the development work for version 1 of the OS is behind them, but they still need to convince people to buy the silly things.

        And that, if you’ll forgive me, is the hard part.

        • People are convinced. The Palm Pre is a solid #2 in mind-share (if the surveys are to be believed). I can’t tell you how many people have seen my Pre and said, “I can’t wait to get it, when it comes to Verizon.”

          AT&T’s network problems and the iPhone’s constant call-dropping has turned a lot of people against the iPhone and AT&T. The Pre is easily the best CDMA smartphone out there, and once Sprint’s exclusivity ends, sales will pick up.

  • Its time for palm pre file chapter 11

  • Huh? You’re writing them off after 11 weeks, when their flagship device is only available in one country, and they’ve got at least one more in the immediate pipeline?

    The distinction between the smartphone and featurephone nowadays is getting slimmer, and whilst seeing this kind of play from the iPhone would unfathomable, a device which is destined to hit various other countries at a lower price point being discounted like this in its launch destination isn’t ridiculous.

    iTunes Syncing was a value-add for users, not the main course, so I highly doubt you can say that it marks one of the points of their downfall when noone expected it to have it as a feature in the first place. Convenient, yes. Necessary, no.

    • No one expected it as a feature? LOL .. Palm advertised iTunes syncing on the original Palm Pre web page.

      They revised it so that they can still suck some off the Apple brand by now stating that you can *transfer* (not sync) your iTunes DRM-free music. They just recently re-added in the disclaimer that Pre is “Compatible with iTunes v8.2. Compatibility with future versions not guaranteed.”

  • Someone at the Smithsonian needs to encase a Pre in glass and mark it as the biggest disaster in business ever.

  • If Palm is dying, you wouldn’t know it from the stock price. Then again, I don’t trust that either.

  • This is a great phone. I would expect the new Sprint $70 ‘all you can eat’ data/voice/text package to increase the Pre’s sales. It would be a sad day if this OS was lost.

  • Palm is not dying, they are about to release a new handset running webOS. Lots of companies are laying off people and it doesn’t mean that they are in trouble…

    This article needs more research on the subject.

  • The quality at TechCrunch has slumped lately. Mr. Biggs seems to be pulling things out of the air and calling it journalism. Pretty sad actually.

    • Mr. Biggs is pathetic. Just terrible.

      • yeah, +1;

        Palm has changed in a very positive way (responding to this kind of blog showing they really care about their product).

        People read the articles on this blog should read also comments in order to get a right idea. That’s why I comment here for the love of the PRE. Maybe it’s intended by the author of the article anyway, create faked things to get reader.

        Palm used to be really slow with the TREO line, and still slow with the PRE (not yet a GSM version), but getting better.

        Keep up the good work, Palm. The PRE is really a wonderful product :-)

        • yeah +1.

          Palm has been idling since 2004??

          They just released webOS and the Palm Pre. They’ve announced a new device, Palm Pixie. Even if you think they will not succeed, you can’t really say they are ‘idling’, can you?

    • I actually have to agree. This reeks of uninformed journalism.. but then again, this isn’t CNN.com.

      No offense.

    • Yeah, this is just shoddy work, even for a blog. Almost all the figures in the original post were wrong. And this is the end of Palm? What are the reasons? What is the background? I know this is a blog and I don’t expect real journalism. I know this is an opinion piece but WTF? Present some logic before declaring bold statements like Palm is done as a company.

  • They should lay-off the Palm lady from the ads first. It’s all her fault..

  • *!!!!!HEY MORONS!!!!!*

    Palm announced a while back that they are no longer pursuing Windows Mobile… they’re just cutting their WinMo team!

    As for the price cuts, they’re merely making way for a higher capacity (16gb?) Palm Pre that will be making its debut soon. Meanwhile, the Palm Pre is the #1 BESTSELLER for both Amazon.com and Best Buy Mobile. Wake up!

    Don’t you guys do ANY research before posting your stories?! Really. It’s pathetic.

  • Palm needs to get their PR shizzle together. This kind of bashing news is hurting their global image, even if it is partly true.

  • Dang it. I was about to tell my girlfriend to get a palm pre . . .

    I didn’t want us to both have Iphones.

    http://www.traderbots.com/stocks/Stock.aspx?symbol=aapl

  • Wow and I thought trolls only posted in the comments. Seriously, your analysis after one rumor is Palm is dying quickly? No wonder your posts are sometimes featured in the Techcrunch feed.

  • Yeah Palm has obvouisly gonna need to cut huge amounts of staff because their recent public offering didn’t raise them another $100m

    /sarcasm

    Techcrunch, you’re sometimes just as bad as OK magazine.

  • They GOT to dump Sprint, no matter how much they are paying them.

  • Freaking Walmart was laying off people in Bentonville and you don’t hear anybody saying Walmart is shutting down.

    Besides that, why is everybody so quick to seemingly “want” a company who is putting out competitive technology to cave in and fold. These types of negative comments are obviously from Apple fanboys who don’t want to be removed from their highchair of dominance.

    True tech lovers WANT Palm to succeed because it forces companies like Apple to continue to improve their device instead of just adding more memory, a little more speed, and god forbid, MMS!

    I don’t, for a second, believe that Palm will ever out do the iPhone. The iPhone is an amazing device, and quite honestly I think I’m going to by the Palm Pre, but also own an iPod Touch because of its capabilities. I would never buy an iPhone because of ATT. Just a horribly money hungary company that doesn’t deserve the iPhone, and Apple would have probably signed up with Verizon or Sprint if at the time of its inception ATT wasn’t considered one of the best services out there.

    Bottom line, stop hating. Especially blind retarded hate like the writer of this article.

  • I thought Techcrunch was a serious source of tech news, but I think it is nothing but lies and inacurate news. I will stop caring about your news and reports from now on.

  • I love the timing these TechCrunch articles have. I also love the lack of journalism when Mr. Biggs posts anything about Palm.

    Palm is merely cutting their WinMo team…

    Palm is merely cutting their WinMo team…

    Palm is merely cutting their WinMo team…

  • The fact that Walmart is selling the Pre for $79 for a limited time, after multiple mail-in rebates, just means that Walmart is interested in the phone and wants to sell it in the classic Walmart way. It doesn’t mean that the sky is falling for Palm. You wouldn’t say that Apple is having trouble because they are selling the iPhone for $99.

    Also, if it is true that Palm is getting rid of their WinMo division, how is that anything close to an indicator that Palm is doing poorly. They’ve already stated that they won’t do any new WinMo phone. It just makes sense that if you don’t need a group of employees, you’ll eliminate their positions.

    I don’t pretend that Palm is dominating the market or that there aren’t bigger fish in the pond but they aren’t “faltering” either. Stop inventing news.

    I think I need to write “Tech Crunch is close to failure, stooping to scare tactics and sensationalism.” It would be just as professional and true to say that only a site that writes articles like this is desperate enough to jump abandon journalistic ethics and print sensationalistic headlines for the sake of a few extra clicks. How long has it been since TechCrunch has had an Amiga expert on their writing staff. Their inability to afford Amiga experts on their staff is a strong indication that TechCrunch’s in dire financial trouble. Could TechCrunch be closing their doors by the end of the week?

    I don’t think of myself as a fanboy or apologist for any technology. I just hate poor journalism.

  • Nothing to see here, move along folks.

    (Happy Pre owner).

  • This isn’t the first time crunchgear tried to spread negative news about Palm. They obviously have an agenda and it’s not for Palm. I’m tired of their rumors and false accusations. First of all, Palm already announced that they were dropping their windows mobile development and moving full force on their webos phones. Second, they’re on Sprint. How many customers do you really think Sprint is going to give to Palm? Wait until they release this on Verizon and other country telcos. Do your research. This phone is doing very similar in comparison to what the iphone did when it started out. It’s a good phone – stop knocking it and certainly stop spreading rumors which are false accusations. You certainly wouldn’t like it if you were trying to rescue a company and everyone was just making you look horrible for no apparent reason.

  • By lowering the price Palm is not convincing me to buy the Pre, although I really like it. What I am waiting for is a micro SD memory card slot and/or 16-32GB onboard storage. Oh, and maybe being on Verizon too. Then I will definately buy it, at any price (well almost).

  • What ?

    the price still 499.99, so they just constraint to there new software and develop there own platform ..

    http://www.amazon.com/Palm-Phone-Sprint-Only-Service/dp/B002JV1VHE/ref=cell_dp_woplan

  • I found this article through the Washington Post site, not noticing the source. When I read it, I thought “Odd. This seems more like an article written by Tech Crunch”. Lo and behold, it came from Tech Crunch.

    The poor quality of reporting from Tech Crunch and its blatant pro-Apple bias become so obvious, you can actually identify a Tech Crunch writer by the biased tripe he produces. Mike Arrington first made his distaste for Palm obvious when he attacked Leo Laporte for praising the Pre (search YouTube for “Arrington Laporte”), but clearly this is a organization-wide problem that starts at the top.

    Aside from the fact that laying off WinMo employees at Palm is actually a great idea, Palm has a great device here. They may have some minor tweaks and bugs to work out, but certainly nothing that would kill a company. WebOS addresses many of the issues that people have long had with the iPhone, and Palm found a significant market not only there, but in the iPhone-envying Blackberry crowd as well.

    The bottom line is: If you can’t see the fact that Apple is indeed fallible and sometimes even arrogant in it’s design philosophy, you aren’t qualified to comment on a competing product and call it journalism.

  • Yes ! Of course.., that’s it, any negative news about the Pre is coming from Apple fan Boys, Oh yeah, I see. Get a grip, the Pre is a sorta nice device, pretty decent software … if you happen to want all your vitals in the cloud for all to see & grab, but really, merely a decent OS. I don’t see any great potential for running widgets as opposed to runnin real applications, but each to his own. The hardware sucks big time! It’s too small…. for me, and really looks just like the sony ericcson phone I carried or years, so no real innovation except the data scooping from the internet, which I personally don’t like. BTW, didn’t Verizon just scrap its plans for the Pre? Not a real rosy outlook. But here’s to ya.

  • Yes ! Of course.., that’s it, any negative news about the Pre is coming from Apple fan Boys, Oh yeah, I see. Get a grip, the Pre is a sorta nice device, pretty decent software … if you happen to want all your vitals in the cloud for all to see & grab, but really, merely a decent OS. I don’t see any great potential for running widgets as opposed to running real applications, but each to his own. The hardware sucks big time! It’s too small…. for me, and really looks just like the Sony Ericcson phone I carried or years, so no real innovation except the data scooping from the internet, which I personally don’t like. BTW, didn’t Verizon just scrap its plans for the Pre? Not a real rosy outlook. But here’s to ya.

    • @David Is the web page you posted this on considered a widget? I don’t understand why you’d call the applications on a Palm Pre “Widgets” if you don’t call the webpage you posted this on a widget.

  • In general you should note what information was UPDATED. That way people don’t mistake this as the original post, since unlike the original it, actually has somewhat accurate context.

  • all I can say is, wow.

    typos, gross factual errors, an inflammatory headline completely unsupported by the story below it, and an “update” (the response from Palm) that is apparently invisible. techcrunch may have hit a new low with this story. and that is saying a lot.

    overall, I’d say that any company that sells 800K units of a new smartphone in its first quarter is doing well, not poorly. and any company that is cutting out its windows mobile development is being pretty smart. so how is palm on its last legs, exactly? because it’s not updating its itunes sync??

    I don’t give a damn about palm one way or the other. but this story ticked me off.

    any reputable site would have pulled this thing and replaced it with an apology. you guys just ran with it. tells you everything anyone needs to know about techcrunch.

  • First off, I can see why the Pre is a failure. It does not look very good and the OS is nothing we haven’t seen already. Considering the competition from phone makes like Nokia, HTC, Sony, Samsung and not to mention Apple, there was never a chance the Pre could make it. It simply is not a good product.

    Monica S
    Los Angles Computer Repair
    http://www.sebecomputercare.com

    • Looks is subjective of course, but “nothing we haven’t seen already” is just straight up wrong. Have you actually used the device? WebOS brings a lot of things to mobile operating systems that aren’t anywhere else. I’ll not get into the whole laundry list, but come on.

    • Monica obviously sips the apple koolaid. She also thinks it’s cool to post her company’s website in a fake signature.

      Do you have that in a text document ready to spam Monica?

    • if you live in the united states which is where the pre started pretty much nobody buys a nokia smart phone. almost no carriers even sell nokia smart phones. I can’t name a sony smart phone. I think you’re exaggerating a bit

  • I guess some people were “aligned” out of a job today.

  • I want a Palm Pre. It’s a great device. HOWEVER, I don’t want Sprint.

    I currently have an original iPhone. As soon as a GSM version is available for AT&T or T-Mobile, I’ll buy a Pre.

    • Do you happen to live or work in an area with poor Sprint coverage (and VZW for that matter, since you can roam for free)? Or do you do a lot of overseas traveling? Those are about the only two reasons I can think of for preferring AT&T over Sprint, honestly.

      • seem like pretty good reasons to me.

        the sprint network is not as robust as ATT’s and many people do travel outside the US quite often.

        • Depends on where you live. For me at&t sucks and my iPhone drops calls all the time. My main cell is on Sprint and works MUCH better. Oh, and I’m in Austin.

          When looking at how many people own cell phones, not that many of them travel outside the US, let alone often.

        • continuing Parker’s point, Sprint is orders of magnitude better in most parts of the Bay Area and Los Angeles metro areas. I’ve used both services in those areas and can say that unequivocally. Also, with an expected drop rate of 30% in NYC (there was an engadget article to this effect yesterday), you would be hard pressed to call that “more robust”. Not to mention Sprint’s recent JD Power for best coverage in the West US. Plus, you ignored that Verizon free roam thing. Please explain how AT&T is better coverage than Verizon. All that said, one MIGHT live in a CDMA black hole, in which case there’s no choice.

          And yes, travel is a real reason for needing GSM. But honestly, as Parker said, the majority of cell phone users do not travel outside the US at all, let alone often enough to warrant paying an extra ~$1,200 over the course of a 2 year contract.

  • Ohh well so much for over supply, Amazon ran out of Pre’s
    http://www.amazon.com/gp/bestsellers/wireless/301187/ref=sv_cps_2
    In stock on October 9, 2009

  • quite possibly the worst reasoned article on this site and that’s saying a lot. only a fool would believe this.

  • no body beats the wiz - September 30th, 2009 at 2:54 pm GMT+5

    f the Pre.. its a shoddy knockoff from a company desperate to be bought and merged.

  • First, Palm IS laying people off and they are NOT just the WinMo team. How do I know? Because my neighbor just lost her job there yesterday. What does she work on – the PRE!

    Second, while Palm “sold” 810k phones they did not have that many activated. Palm counts sales to retailers (not customers). All Things D had an article about this misconception this morning. They estimate there is 11 weeks(!) of unsold inventory in the channels. The Pre and Palm are NOT doing well at all.

  • Wow, John, you have a surprisingly tenuous grasp on this subject. Poor article all around.

  • What an absolutely shite article.

  • “We are not laying people off. As we continue our transformation we are better aligning our staff with our business objectives.”

    That’s MBA speak for “we’re firing expensive people and replacing them with cheap people since our business objective is to reduce cost.”

    I should know. I’m an MBA.

  • To be fair, in this era of Glenn Beck baseless declarations, this post makes sense.

  • I’ve removed Tech crunch from my RSS feed reader after reading this article.

    I switched from iPhone to Palm Pre a few months back and haven’t regretted it for a second. Many coworkers have done the same, and more are moving from Blackberry to Pre all the time too.

    The Pre’s user experience is simply better and more innovative. There are hundreds of apps, and I actually use the apps which I’ve installed.

    TechCrunch needs to get a clue, and at minimum give the technology companies that are trying to build something the praise and good wishes they deserve. Not to throw rocks at Apple, their products are great.. but the Pre is awesome.

    bye bye for now.
    J

  • Considering Palm’s Stock is up about 1500% since January, they just had a $300 million dollar stock offering, they are about to release the Pre globally on no less than 5 more carriers by January and they have an other new phone out by Christmas, this story rings hollow.
    Besides the naysayers that somehow expect Iphone sales stats on Sprint’s network, there has been nothing really wrong with this phone’s release.

  • Can someone explain the anti-Palm attitude from TechCrunch? Is there some bad history involved? Also explain how “the end will come quickly this time”? Was there a previous slower end to Palm?

    • From what I can gather: Mike Arrington, founder and co-editor of TechCrunch, must have asked Palm for a “free” review unit of the Pre way back when, and he didn’t get one. Back then, lots of media peeps were scrambling to get their hands on one, and there was plenty of verbal envy amongst those who didn’t. Who knows what the back story is, but my guess is that Arrington’s TechCrunch ego was bruised, and he was probably pissed that Palm didn’t give him precedence over other news sources. Following that, if you ever heard anything about Palm from TechCrunch, it was negative.

      In case you’ve never seen it, check out the video of Arrington’s call on Leo Laporte’s Gillmor Gang: http://www.youtube.com/watch?v=IsV-lgnAjps

  • Bashing palm is so easy. Even a caveman can do it.

  • Its official, TC is garbage and Biggs is a moron.

  • smartphone-programmer - October 1st, 2009 at 2:03 pm GMT+5

    Palm Pre’s 1st generation model has already taken about 500,000 units of sales away from the iPhone in the 1st quarter. Because of this unexpected success, iPhone sales lost to 500,000 consumers. Consequently, Apple will need to layoff some of their employees to make up for their disappointment.

    Meanwhile, Palm Pre’s 600 MHz chip whips iPhone 1G, 2G, and 3G models to the dirt. At the same time, true multitasking is running circles around iPhone 3Gs.

    Palm Pre is a linux-based operating system, so is the Google Android. Nokia holds 45% of the world’s smartphone market while iPhone at a low 13%. Nokia will soon be releasing their own linux-based smartphones. And by that time, iPhone will surely be obsolete while the majority of the industry lean towards linux-based mobile operating systems along with the crowd of computer programmers that are key in making smartphones useful.

  • Thanks for everyone who cleared up the rumors and false information about the PRE–I won’t rehash any of that. And, I know this blog is a few weeks old–but it just showed up in the news, so I’m responding now.

    Anyone who has dismissed the Pre as something less than the iPhone or any other smart phone on the market has either never used one, went into the purchase with biases, or has been so hypnotized by the toy called the iPhone they can’t think clearly. The Pre integrated my life as a contractor working on multiple jobs, with multiple calendars, multiple address books and my personal life within minutes after I bought it. The Pre works. Simple. Intuitive. I’ve thought a smart phone should work like this for ten years–and after a decade of fighting with synch tools, duplicate removers, multiple Exchange profiles, etc., I finally have a tool that just works. And it works fantastically.

    I am a huge fan of the Pre–and I hated the Palm 755p (I was ready to, like a lemming, get an iPhone because I hated the Palm products of the last few years). The Pre, for anyone who uses their phone for a tool and not a toy in their life, has no competition.

    And from what I’ve read and understand, Palm and Pre aren’t going anywhere.

Leave Comment

Commenting Options

Enter your personal information to the left, or sign in with your Facebook account by clicking the button below.

Alternatively, you can create an avatar that will appear whenever you leave a comment on a Gravatar-enabled blog.

Trackback URL
Short URL
bugbugbug