The consumer market has taken a hit during the recession, and some companies are feeling it more than others. One of the hardest hit companies is PDA and cell phone manufacturer Palm.
The company recently attempted to revive its sales figures with the release of the Pre and its breakthrough WebOS mobile operating system. The company then followed that up with the release of the Pixi, a dumbed-down, candy bar version of the Pre.
Despite the company’s major advances, it is barely afloat. Palm’s stock is at $4 a share, down from $17 in October, and it has very little money in the bank to create a new product or launch a reinvigorated marketing campaign. It seems as though the once-great company now has two options: acquisition or dissolution.
The recession has put consumer companies under a magnifying glass. Many companies no longer have vast amounts of cash to cover up mistakes in either hardware or marketing, which is exactly what happened to Palm.
The most apparent failure was the hardware in the Pre. The issues range from dead pixels in the screen to cracks in the case to rare instances of the screen twisting right off. A survey from Precentral.net showed that close to 50 percent of Pre owners have had to exchange their units at least once.
That means that almost 50 percent of all Pre phones have been given away for free, and that’s assuming only one exchange per person. That is not something a struggling company needs to deal with during an economic downturn.
The second major issue fell in the developer realm with Palm’s application catalogue for its WebOS. The company failed to launch a software development kit with enough bells and whistles to attract a hoard of developers; it also wasn’t launched until the Pre had already gone to market. Eventually, developers were able to use all the functionality of the Pre through a development kit, but it was too late for the platform.
More misfortune came to the company with the release of the Pixi. The overall hardware of the Pixi is actually impressive; the keyboard is nice and the form factor is better than the Pre.
But WebOS can’t run very well on a hardware setup that only meets the minimum requirements. Also, at the time the Pixi was released, people were able to buy an iPhone or the Droid Eris running the Android operating system — both comparably better phones — for the same price.
The economic recession is forcing companies to trim their own fat. Palm made some bad decisions when it came to hardware design and marketing, and the company is now suffering in a big way.
It no longer has cash to use in bandaging its problems.
If the company manages to survive this low point in its existence, we can expect it to emerge from the recession as a technological powerhouse. But right now, everyone is tightening their belts, and some companies are just too fragile to handle the pressure.
Michael Padon is an engineering sophomore and may be reached at [email protected]
