Palm Pre: Nowhere to go but down

The problem with the Pre is not that it's a bad product so much as it's a bad idea.

Ed Colligan is a nice guy and visionary marketer who, nevertheless, deserves blame for most of Palm's problems, including the failed launch of the Palm Pre last weekend. At least by sacrificing Colligan so quickly, that must be what "the new Palm" hopes we'll think.

Ex-Apple exec Jon Rubinstein, who replaces Colligan, joined the company two years ago, when Evolution partners sunk $325 million into trying to recapture Palm's magic. If there is anyone to bless or blame for the Pre, it's Rubinstein.

The problem with the Pre is not that it's a bad product so much as it's a bad idea. A business plan that begins with, "First, Apple or Research in Motion needs to screw-up royally," can't be a good one.

Yet, that is what has to happen for the Pre to gain serious traction.

Apple's response? Sell a product that is at least as good as the Pre, its iPhone 3G, for half the price of Palm's wonder child. Granted having AT&T as sole carrier has become a ball-and-chain for Apple of late, but anyone who buys a US$199 Pre over a US$99 iPhone 3G is seeing something that has quite eluded me.

The best hope for Pre, in the short term, is for Sprint to take such decisive pricing action on its service contracts that it makes Verizon and AT&T look hideously overpriced. How likely is that?

As for Research in Motion screwing up, I don't really see the BlackBerry has having any place to go but down, but it will happen slowly. Big companies are not likely to switch to the Pre in large enough numbers to really help Palm do more than limp along, at least in the near term.

If I am right and this scenario plays out, Colligan will end up either totally scapegoated (which he doesn't deserve) or looking like a genius (ditto) for getting out now.

Meanwhile, the Pre will never develop the serious developer mojo it needs to have a reach chance at success. This needs to happen before the expected tsunami of Google Android devices later this year again takes the marketplace's attention away from the Pre.

That, of course, presumes the Pre will be able to regain some of the glory that it, in less than three days, lost to Apple.

It is, of course, possible that Palm has a next-generation Super Pre, a real game-changer, waiting in the wings. That is hard to imagine, but not impossible. At least for Palm's sake, I hope it isn't.

Sadly, Palm has had its chance in the marketplace and Colligan had a large role in the company's failure. But, he doesn't deserve to get tagged with the failure of Palm's rebirth. That honor goes to Rubenstein and a group of investors--again nice folks--who offered too little, too late.

It may turn out that the Pre's best days are already behind it.

David Coursey doesn't hate the Pre; he just doesn't see how it can become a real success. He tweets as techinciter and can be e-mailed using the form at www.coursey.com/contact.

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