Spray and Pray. That's how I would describe Palm's hunt for "real reviewers". As Dell's Andy Lark pointed out recently, it's easy to identify the "influencers." Just start Googling!
Pressure is mounting on Palm as it gets closer to launching its new Pre smartphone, rumored to be just a couple weeks away, in mid-May.
For Collins Stewart analyst Ashok Kumar, Palm may be facing much more challenges than it can bear.
Pre faces multiple software and hardware issues
In a report this morning, Kumar writes about multiple hardware and software issues that forced Palm to dramatically reduced its production orders for the Pre; calling Wall Street’s expectation of Palm shipping 1+ million smart phones in 2H09, highly unrealistic.
Palm's future depends on the success of its Pre smartphone
Pre must sell at or below $199
For Kumar, if Sprint does not match or beat AT&T’s subsidized iPhone price of $199, which translates to a subsidy in excess of $200, the Pre is Dead On Arrival.
According to a virtual teardown done by analyst firm iSuppli, the material cost for the Pre is $170. iSupply expects Palm to charge Sprint $300 for the Pre, which in turn would subsidies the device to reach the iPhone level.
Running out of cash… again!
Kumar said that Palm’s cash burn was about $90 million last quarter, which should increase significantly with higher marketing cost associated with the launch of the Pre platform.
With only $220 million in the bank, time runs out in two quarters, Kumar notes.
But Palm might found a way to reduce its marketing “spend” by recruiting “Real Reviewers” of Palm phones including the Palm Pre. Every reviewer, will receive for free, a current model Palm phone and a data plan for six months. The only requirement is to regularly post about the Palm phone on blogs and social networks.
It’s smart for Palm to try to target “influencers” (journalists, bloggers, soccer Moms…). A strategy that was highly recommended at yesterday’s PRSA event on “PR Secret Strategies For Success” by PR pros from Dell, FICO and Sun. For the bloggers, it’s a double-edge sword: get an early access to the Pre, but risk selling your soul or at least the perception of it.
We already played with the Pre at CES, last January. The keyboard is nice – similar to the Palm Treo Pro – but the rest of the experience (features, applications) will need time to get use to it. We’ll stick with our iPhone, Blackberry and soon Google G1 for now!
Still, no takers, for Palm
Finally, Kumar does not believe that Palm is an attractive take out candidate.
“Their crown jewel is the operating system, but the smart phone industry is migrating away from closed to open platforms. As such PALM is on the wrong side of the fence,” writes the financial analyst.
While I agree that in this distress economy, Palm is an expensive and risky buy – which generally does not go well together – Palm’s WebOS is a much more “open” system than the highly successful iPhone.
Posted by TechPulse 360 
