Palm has gone from first to worst in a product that they revolutionized over 12 years ago. Palm’s overall performance has continued to deteriorate with its loss of market share from the continued strength in Blackberry and the recent introduction to the iPhone. They went from being a key player in the industry by generating revenues of $1.579 billion with an operating profit of $105 million in FY06 to losing over 16% in revenues to $1.319 billion realizing an operating loss in excess of $126 million.
Palm has been working on their own operating system for over a year to introduce in the new line of products to compete with Blackberry and Apple. The article describes how they should just scrap the idea of using their own system and jump on board with the free Android system. I believe that Palm should definitely scrap the idea of continuing to develop its own operating system in order to compete with Blackberry and the iPhone. I believe that Palm should take a risk by using Android’s OS even with the money and time spent for the research and development on the operating system that they could call their own and focus more on the overall product. Palm was moving away from its core competency with the idea of developing an operating system – Leave that up to the folks that make life easier for everyone – Google. This is an opportunity for them to customize the Android OS to their liking and sell products at a more competitive price that will hopefully more than make up for the loss in market share. However, Palm Treos use Microsoft applications which might cause some friction in the relationship with Microsoft or the threat to use the Android might pay off with lower prices for Microsoft applications and operating systems. Overall, something needs to be done for Palm to get back market share – this might just be that drastic change that is needed to put Palm back on that pedestal and allow them to focus on the applications that will compete with Blackberry or the iPhone.
