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Palm Pre January 11, 2009 [Pocket PC phone] | By Tadd Rosenfeld. You might have read that Palm's stock soared over 35% this week. What's the excitement about? It's about the Pre smartphone, which is one of the most searched terms on Google today (according to Palm). The Pre is nothing like Palm's past products. The form factor is new, including a slide out qwerty keyboard and finger swipe area instead of hard buttons. Pre runs a newly developed and proprietary platform webOS, which supports third party software written in HTML, CSS and JAVA Script, commonly known programming languages. Palm believes Pre will attract substantial third party development as a result. Pre boasts true multitasking, multi-touch, autonomous GPS, WiFi, Bluetooth, 8 gigabytes of memory, a fast processor and host of other high end features. Does this mean that after years of evolutionary device releases, deteriorating balance sheet statistics and declining market capitalization, that Palm is turning things around? Perhaps. Palm took a "poison pill" in 2007 to reduce the likelihood the company would be acquired. The firm assumed $400 hundred million in new debt and paid out much of the company's cash as a special dividend to shareholders. At the same time, Palm lost market share to Apple and RIM, and saw it's sales fall nearly in half. The company began losing the most money per quarter in its history. Can Palm refinance its loans? Can the company raise additional cash? These are important questions in context of the recent stock market crash and tightening credit environment. Clearly the Pre is tremendously important for returning Palm to profitability and ability to raise money. We believe Palm's new shareholder and Chairman are helping turn the company around. Elevation Partners bought 27% of Palm's outstanding shares, and installed Jon Rubinstein as Chariman of the Board. Rubinstein is well known for leading the original Apple iPod design team, a tremendously popular device. He led design of Palm's webOS and Pre. We had a rare opportunity to hold and use a demonstration model of the Pre today. In our opinion it's better than the iPhone. There are more features, a more compelling interface and we believe there will be substantial third party development. Palms' Pre is perhaps not as intuitive to use an iPhone, and the vast number of iPhones in circulation (around 20 million) mean developers will continue to focus heavily on that device. We would point out, however, that the iPhone taught us how quickly a great device like Pre can proliferate. Apple has an exclusive agreement with AT&T for three more years. Sprint, which has been losing market share to AT&T and is the first carrier in the United States to offer Pre, therefore has a big incentive to push Pre in their stores and marketing. Check out our 17 minute video recording of Palm demonstrating the product:  Post your comment (free registration is required to post, but if you register you can edit your posts later) [ 14 Comments ]
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