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.

54 thoughts on “Palm’s small-screen bet doomed the Pre

  1. I agree with the basic premise. Palm decided to urinate on the shoes of many geeks when they withheld wi-fi functionality from the Treo 650. I had purchased and used EVERY Palm device from the very first Palm Pilot, purchased with days of going on sale in Fry's Electronics in Palo Alto, through the Tre 650. At the time I bought the Treo there was an expectation that it would be hackable, that wi-fi would work, eventually. Dead wrong as it turned out. Palm caved to the telcos on this. I doubt it would have changed the developments in the market as a whole, given I certainly decided not to buy another Palm at that point and I went with an iPhone 3G in due course. Here in London it works well (no AT&T).

  2. “I've stood next to people as they make this decision and screen size is definitely a factor, even if they aren't able to articulate it in surveys”

    Scoble, the only thing that proves is that you saw a random, miniscule sampling of the cell phone buying public. No logical thinking person would drawn any type of definitive conclusion from that observation.

    “Walking around the Olympics I saw just how many people are stabbing at screens while walking around”

    Really? How many? 10? 50? 100? 1,000? 10,000. Again, the only thing that proves is that you observed a miniscule sampling of the overall cell phone user population. Not logical thinker would draw any type of definitive conclusion from that type of sampling. Do you know what the word “anecdotal” means?

  3. The only reasons i'm not using pre is that it's screen is so small, and there is close to none support for the OS by developers. Not many apps or games :(

  4. After reading this column I said to myself, “Self, could it be that simple, a larger screen?”

    Then it hit me on my evening commute home, two words “Blackberry Storm”

    If it was as simple as a larger screen. Robert, you are smart but you may be showing some smartphone bias

  5. “Most of the time these users are not on the phone, but are stabbing at the screen with their fingers doing various things.”

    Fail. The only smartphone OS that alows you to do “various things” is WebOS… At least at the same time! :P

    Though, my Pre screen could be larger. Sometimes it's dificult to walk and read on this screen.

  6. I prefer the smaller form factor precisely because it is smaller. All these people you see “stabbing at screens” are using two hands. I don't have to with my Pre. I can hold it in either hand and use my thumb to reach every corner of the device (unless I'm holding it landscape.)

    Yes, there are occasions where a larger screen would be nice, but it has to stay in balance with pocketability and that balance point is different for everyone. Would I buy a larger webOS device? Maybe. Would I buy a larger non-webOS device strictly because of screen size? Not a chance.

  7. While I *love* the small size of the pre and how well it fits in my hands, it certainly would be a good idea to also have a iPhone/Nexus sized model.

    Cheers,
    Hans-Peter

  8. I guess I'm in the huge minority, but I compared the Pre and BB on Sprint to switching carriers for
    an iPhone and went with the Pre. I do not need enterprise email as a small business owner and the Pre does IMAP push email and reliability just fine for me against the BB. The ability to multitask, cloud sync, universal search, and far superior message notification system made it a communication winner IMHO over the BB. The keyboard is a bit slower to use, but I'm no Mavis Beacon and typing 30 wpm vs 28 wps doesn't direct a phone purchase decision. Once the productivity comparison to the BB came to a draw IMHO then you look at the rest of the features and OS and the Pre just kills the BB.

    Comparing to the iPhone was an easier decision. No one has mentioned yet that the iPhone contract would cost like double on AT&T vs the Sprint Pre. I have unlimited data, phone, text, GPS with a corporate discount on Sprint (very reliable in my area) for $45/mo. The iPhone has a bigger screen and many more apps vs the pre which is less costly, FAR superior OS, and a physical keyboard….I have tried the non-physical keyboard a ton of times and just don't get the allure vs a real physical keyboard. But in the end the Pre can mulitask beautifully and the iPhone simply can't. I can listen to live Pandora while typing an email, while checking the weather, while keeping an IM chat window up and going back and forth, while surfing the web, while pausing a game still open in the same placed I stopped, while answering a call and having all of the aforementioned programs still up and running.

    The marketing failure and just being exclusive to the Sprint market is what put them in this huge hole.

  9. I live in Bangkok and the BB is a major winner here, not so much for email it has to be said but for the same reason (keyboard use). A lot of local people here love MSN Chat and use the keyboard to type for hours sitting on the BTS.

  10. Yah called the Pre an iPhone killer after the golly-gee-whiz CES demo. “Anyway, the bottom line is Palm has a real winner here”, hence this outcome was a forgone conclusion.

    But access, and carrier horrid marketing more the issue, as WebOS is quite the deal. Screen size, lack of apps, and all that geek nonsense, is mainstream/corp market irrelevant. However, Palm is still no Blackberry, buggy for Enterprise, imho.

    Yet I see more BBs, Samsung Impression/Mythic/Highlights and LG enV3/Chocolate Touch's than anything…

    And WM7? Will anyone pay attention? I seriously doubt it, even if great as all out, Microsoft's track record in the phone, customer space will, once again, screw it up.

  11. I think when you say I'm coming to a technocentric conclusion that you are still misreading the market. Walking around the Olympics I saw just how many people are stabbing at screens while walking around. The Palm's screen is just not a good experience for that and the numbers of people who care about keyboards are less than you might think and RIM has most of those anyway (I actually really hate physical keyboards and far prefer on screen keyboards on these devices, even on my Droid which, admittedly, has a sucky keyboard).

  12. I didn't say it's never a factor. I said it's rarely a factor. And certainly not something that, as you put it “doomed the Pre” (your words, because it's not doomed). I just think you're jumping to a very technocentricic conclusion based on your own technocentricic experience. That's all.

  13. You're telling me that when people go into a store, pick up the two devices, that screen size isn't a factor? You have got to be kidding me. I've stood next to people as they make this decision and screen size is definitely a factor, even if they aren't able to articulate it in surveys.

  14. I had the pre for 6 months before jumping ship and picking up an iPhone 3gs. I can tell you, the screen size wasn't an issue for me. the keyboard was a constant issue – too small, and after just 6 months, starting to breakdown. Lack of apps was another one, from Palm and 3rd party developers, an aggravating lack of small features was another nusiance for me – no index on the contacts, for example. I think though the final blow for me was when, two months running, the OS software updates pushed to my phone managed to render useless the apps I did have installed on the phone.

  15. P.S. That comment was supposed to end after the second paragraph. The third paragraph is an artifact of the comment box–didn't see it before posting and intended to edit it into another part of the comment. Sorry for the incongruity.

  16. Robert, always appreciate your insight, but as other people have noted, your view is very technocentricic. As someone who has worked at Apple, Google and now Palm, I know first-hand that it's sheer ability to project out to consumers that helps a product get volume. Screen size may have prevented you (and perhaps other technophiles who don't have a well-read blog) from buying a Pre, but I can tell you that “small screen size” is not even on the radar when we do our research on why someone may have chosen an iPhone or Android device over a Pre.

    As easy as it is for all of us in Silicon Valley to think that the world follows our lead, they simply don't. Yes, we make the things they like even before they know they're going to like them, but it all comes down to making a spectacular product, then making sure people know about it. WebOS is unarguably spectacular (don't ask me….ask the critics), and we're working on getting the word out.

    I agree that people sometimes don't know what they want until they have it, but bear in mind that the Pre's screen size is 3.1 vs. iPhone's 3.7. That's not a huge delta, and you get a real keyboard with that.

  17. For once, I completely agree with you!

    Apple redefined the market for smartphones, and any competitor that tries to mimic it is only a “me too” – it won't have the ubiquity, the branding, or the network effects (e.g. from app store users). And for a disruptive technology, the iTouch has been invaluable in teaching people the interface before they adopt the phone.

    BB has the enterprise market. Nokia and Motorola have, to an extent, the legacy effects of a familiar and trusted brand name and user interface. HTC/Google are aiming for sheer scale, which will bring their phones down in value to more affordable prices/plans, and lead people upgrading when they renew their contracts, since it is the best phone available. Palm have been really caught in no-man's land – one device does not help you make inroads into a market unless it is truly revolutionary. And the pre isn't.

  18. Completely agree. In my little corner of the universe (business lawyers), Blackberry has close to 100% market share because email is the critical app. I'm the rare exception who uses an iPhone because (1) I have my own firm and can choose my device, and (2) I focus on tech startups and social media, so the allure of app geekery is irresistible and outweighs the usefulness of a BB keyboard.

    At the end of the day, though, I still want to have my cake and eat it too: An iPhone with a useable keyboard that runs on Verizon's network domestically and can also roam internationally on GSM. Pipe dream, I know. :P

  19. “because the market follows the geeks.”
    ———-
    I think you're off on this in this category – 85% of the people I know that bought iPhones did not follow the geeks. They saw the ads, saw it in an Apple store, fell in love, bout it – no geeks anywhere in site.
    It might be true with Android phones though.

  20. I have had the original iPhone and the iPhone 3g. Now, I have the Pre. WebOS is a great platform, it handles multi tasking phenomenally. However, occasionally the Pre has some opportunities with the lag and overall performance of the device. Sometimes the phone function is unbelievably slow. This is an issue that I never had with the iPhone. Just going back and forth between the dial pad and the called log is laggy on the pre.

    The form factor is a little small but, the screen on the pre is beautiful, crisp and sharp . As for the slide out keyboard it does become a little of a nuisance. The optical keyboard is better because it can just appear on the screen.

    One last thing… A big reason why the Pre isn't doing that well in my opinion is the amount of advertising or lack there of. Every where I go I see iPhone and Android advertising both in print and on TV. Palm needed to do a better job at selling the device that they made. It just wasn't there from the beginning.

  21. Perhaps Rubenstein should have at least tried an iPhone before making an iPhone competitor ( http://digitaldaily.allthingsd.com/20100108/rub… ). Maybe then he'd have realized the importance of the screen size!

    I hope that the WebOS technology will live on long after Palm. WebOS is a great next-gen smartphone platform but it could also make the basis for a nice multi-tasking tablet computer. With Palm's current stock price they are a takeover target. I'm just not sure there's a buyer.

  22. I was given my Pre at the launch event in NYC by Dan Hesse. I am CTO of a company where because of a Truck Tracking and Routing Solution we are forced to use Nextel (and thus now Sprint), so to agregate our purchase power and get the largest discount we use solely Sprint. So aside from our 40 trucks and their devices, we end up with about 50 Salespeople users that I currently have on Sprint Blackberries (BTW, no problems here in NYC with Sprint service).

    I, being the “tech” guy at the company, am always trying new things. My hopes were to deploy the Pre to our Salespeople, but my conclusion is that it is just not as good as the Blackberry for simple Phone/Email/Contacts/calendar. Period.

    I agree with Robert about people wanting to use their devices for more than just phone/email/contacts/calendar, but when you have a person running a business they cannot wait. THE PRE CONSTANTLY MAKES ME WAIT. So my comment on the Pre is that while I like the idea of it, if I deployed it to my salesforce they would all be throwing against the wall in total frustration.

    I planned to buy fifty of these, and I could not with this user experience. This is why the Pre has failed. In the real world it is awful.

    I am now waiting for a proper Android device on Sprint to be available, and for the Exchange operability with Android to be flawless. I am hoping then to have the “perfect” device. I would, BTW, buy another WebOS device, but only if it a TON faster.

  23. Well, i’m too a big fan of big resolution cell phones. I used to have symbian version of putty on a Nokia E71 and it sucks. I now have a Samsung Omnia and SSH client looks way better than on Nokia’s resolution. Well, if you want bigger cell phone, HTC HD2 should be enough for a start. My girlfriend is not that technical, she only bought it just for the co-workers envy that they don’t have the same. She’s not using most of its features, but i’ve seen it, its screen is HUGE!

  24. Robert, I think you put too much emphasis on the screen size. I'm not saying it's not a problem, but I don't think it was THE fatal flaw. I think you rightly imply that it was designed as a tweener device, trying to compete against both iPhone and BB at the same time, but not being superior to either along any of the characteristics that make customers buy the respective devices. And in an app-dominated world, Palm was just too far behind and didn't have the core of dedicated developers that Google does. In roughly the same time Google has 2 orders of magnitude more apps available than Palm.

    Personally I have more issues with my Palm Pre for performance and battery life issues than I do the screen.

    Palm also didn't help itself (not that they probably had a choice) working with Sprint. The Sprint network is fine, but they have almost no market power. People who want cheap go to T-Mobile, people who want dependability choose Verizon and people who travel internationally and/or want the iPhone choose AT&T's GSM-based service. Again, Sprint, much like Palm doesn't surpass their competition along any single dimension.

  25. Robert, do you think we have already reached the maximum screen size with the iPhone and the Nexus One? Or could there be something bigger around the corner? (And I do not mean the iPad!)

  26. If your buying a smart phone you are by definition looking for something other then just a phone. If Palm’s customers said they wanted a better phone, well they didn’t listen to the customer since that would mean call clarity and reception something that is still lacking on most cell phones.

  27. I was super excited about the Pre and it's WebOS long before it even came out. I'm a Web developer and I was really excited about coding apps on the Pre.

    But when the Pre was actually released my excitement level just dropped big time.
    All the OS and geeky behind the scenes stuff hadn't changed.

    What changed was they revealed the hardware.

    It struck me as this tiny, flimsy looking, plastic toy that wasn't going to last on the market.

    Then people kept talking about how for their next trick they were going to make.. get this… a SMALLER one.

    I haven't really considered working on a palm Pre since then.

    Come out with a TABLET based on the palm WebOS and multi-touch, then I'll be interested!

  28. I also think that Palm thought they were doing battle against both the Blackberry and the iPhone. In reality the product they created was a direct competitor to the Blackberry and not the iPhone. The keyboard and small screen will is proof of that. Sure they loaded up the OS with lots of consumer goodies but the keyboard and small screen classified it in the second rate BB camp out of the gate. Trying to be a better Blackberry is tough and with the split marketing campaign they failed to communicate the devices advantages very well to either of the competitors potential defectors. Blackberry users were not going to switch to a Palm because the device was percived as too close to what they already had in their BB's. iPhone users looked at the Palm and “Wow a keyboard how dated and old technology….pass.”

    Choose one target and go for the kill. The attack and final product was seen neither as a great biz email device nor leading edge consumer device that had apps to satisfy the dime store desires to be entertained.

  29. The market isn’t rejecting the Pre; the market couldn’t GET a Pre unless they were willing and able to be on Sprint, a smaller carrier. It’s only recently that Verizon customers could get one, and AT&T customers still can’t. Given contractual lock-ins, it’s not like customers can easily hop from one carrier to another, no matter how much they like the devices on them.

  30. As big as the market is, it seems unlikely to sustain 5 separate platforms going forward (at any reasonable volume).

  31. It doesn’t help that Palm loyalists, who want all their memos and contacts and calendar data to easily slip from the old Palm OS into the new devices, are frustrated at every turn.

  32. You don't understand the market. People who need to do email need a great keyboard first. As long as Blackberry has the best keyboard on the market (they do) they will keep the people buying in droves. But as soon as someone comes out with a great keyboard on a device with a bigger screen (Motorola's Droid's keyboard sucks, for instance, it's nearly unusable) then you'll see a lot of people switch. People hate their Blackberries but are forced to use them because of the keyboard (and corporate momentum, but Apple is even getting into corporate buying plans).

  33. Is the small screen the factor? Maybe….at least part of it. I have a blog entry that I plan to write over the weekend that looks at Palm in a very different way (though screen size was a topic) and how others are beginning to head down the same (wrong) path.

  34. 100% agree that on the hardware size, this is the fundamental flaw with the new Palm devices (Pre and Pixi.) Also, in general I can't stand the slider form factor. With such a small screen, there's no chance for an onscreen keyboard, and having to physically slide out a keyboard every time I want to reply to an SMS or email is just cumbersome.

    I also attribute it to the marketing campaign. iPhone and Droid both have killer TV commercials. What did Palm bring to the table: that creepy woman. Very surprised with the utter lack of a compelling advertising campaign for the Palm devices.

  35. If Pre had tied their fortunes to Verizon instead of Sprint, Palm would have had a hit for six months before the Droid came out. After the VZW CEO said they were getting the Pre, I waiting for it. When the Droid came out, I didn't need the Pre anymore.

  36. Good post, but I don't completely agree with your conclusion as to the screen being the cause of failure. It certainly didn't help.

    Fundamentally I believe the Pre didn't have *any* target market in mind. It couldn't touch the iPhone (duh) for personal/consumer/lifestyle devices, nor the Blackberry for business devices. And it tried to compete with both.

    Now Android is effectively trying a similar path, only with numerous manufacturers – a much more effective path to ubiquity…

  37. After switching from the Pre to a Droid I went back to my Pre after a week and was disgusted by how small it was. I couldn't see it bef0re I switched.

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