Palm’s small-screen bet doomed the Pre

Some of you might not know, but if I like a mobile phone I buy it. I have purchased several iPhones for my family and I own a Droid as well (I don’t recommend buying that one, instead I am telling my friends to get the Google Nexus One, which is a better device due to its speed).

Yesterday Palm announced that its smart phones are selling disappointingly poorly.

I’ve been doing a lot of thinking about why Palm didn’t get my money or get most of my friends excited. Yes, my friend Luke loves his Palm, but he just hasn’t been able to convince me.

Why not?

I believe Palm made a fundamental market miscall. They assumed that people would adopt a small phone with a decent experience and web browser.

They bet against the geeks. They bet against the web.

They bet wrong.

As I walk around Vancouver’s airport you can see why. A phone is no longer just a phone. People walk around holding their gadgets in front of them. Some, like Blackberry users, do email. Every Blackberry user I know wants a bigger screen.

But more and more I’m seeing iPhones and Android devices in airports. Most of the time these users are not on the phone, but are stabbing at the screen with their fingers doing various things.

Palm bet against these users by putting a small screen in their Palm Pre. What Palm didn’t realize is that users who actually go into stores and buy phones now need more than just a phone, they need a Web device.

By betting against the geeks they made a HUGE market misjudgment because the market follows the geeks. People get this wrong all the time.

It’s really a shame, too, because Palm has a very nice OS and a great stance toward developers.

But until they give me a device with a glorious huge screen with super high resolution they aren’t going to have a chance with the new users.

Compare to what Microsoft is showing off with its new Mobile 7 devices. Huge screen. Android devices? Huge screens. iPhones? Huge screen. Nokia N900? Huge screen.

These are the devices that are pushing the industry forward. It’s too bad that Palm’s CEO Jon Rubenstein made such a fundamental misjudgment. Why did he make that misjudgment? I think it’s because he probably did customer research and the research kept telling him that people wanted a great phone first.

See, customers lie about what they really want. Truth is, they don’t know what they want until you show it to them.

Remember what Henry Ford said? He said that if he asked people what they wanted they would have told him to build a better horse-drawn carriage. Well, we all know how that worked out.

Rubenstein shouldn’t have listened to the marketers. People want big screens with easy to use email and web. Palm didn’t deliver that and now it’s the loser.

About Robert Scoble

As Startup Liaison for Rackspace, the Open Cloud Computing Company, I travel the world with Rocky Barbanica looking for what's happening on the bleeding edge of technology and report that here.

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