Smartphone pioneer Palm’s business is terrible right now. The company lost $80 million last quarter on $192 million of revenue because its Treo and Centro lines are old and stale. That was 40% below the Street’s revenue consensus.
But everyone at Palm (PALM) is working on Nova, the next-gen smartphone platform they’ll unveil next month at CES. Nova is the hail mary pass that Palm thinks will bring it back to glory (and profitability).
We hope Nova is awesome and kicks Apple’s (AAPL) iPhone’s butt. But we’re not the only ones who fear it could be too little, too late.
So what did Palm CEO Ed Colligan have to say about his new platform during yesterday’s earnings call? Via Seeking Alpha:
Paul Coster – J.P. Morgan
OK, and then the big picture question really for Ed, how do you respond to the argument that you are too late with Nova or the next generation platform and products?
Edward T. Colligan
I think it’s ridiculous. I mean, it’s early in the space. There’s an enormous amount of opportunity left. If you look at just the replacement market in this business, every year there’s phenomenal numbers of even just replacement devices, so the chance that there’s not another opportunity ahead or we can’t build a platform position here I think is not real. So it’s incumbent upon us to create really compelling products and a differentiated enough platform that people will recognise that and come to Palm. We have millions of users that recognise our brand of delivering them fantastic solutions over the years. We expect they will look to us again and we hope as feature phone users migrate to smartphones that we will get more and more of them as well.
Colligan is right to an extent: Palm will get the benefit of a growing smartphone industry.
But that doesn’t mean that Nova is going to win just because it’s there and has Palm’s name on it — it has to be good. Especially as Apple (AAPL), BlackBerry maker RIM (RIMM), and Google’s (GOOG) partners like HTC and Motorola (MOT) kick into high gear.