Comments for Palm Pre: Like the iPhone, But Also Not

Palm Pre: Like the iPhone, But Also Not

2009-03-20T13:14:23Z

If there was any doubt that the upcoming Palm Pre is being poised as an iPhone competitor, some recently discovered documents about Palm's financial plans can put those thoughts to rest. According to Palm's Subscription Accounting plan for the Palm Pre (PDF link), all revenue and expenses for the device will be distributed across 24 months - the required 2-year contract period for new Pre owners. What this means is that Palm will account for device sales immediately, but plans to use the subscription fees to fund ongoing R&D efforts. For Pre owners, the documents promise "new software features free of charge." Sound familiar? It should - it's the same accounting model used by Apple for their iPhone.

]]> But while Palm's subscription accounting plan mimics that of the iPhone, statements from the company's CEO prove Palm has other intentions for their webOS platform - and Pre is only the beginning of their efforts.

Free Updates, Just Like the iPhone

With subscription accounting, a company can use the revenue generated from the subscription service and spread it across the life of the service while revenue generated from the device is accounted for immediately. This allows a company to present a gradual increase in revenue as more devices are sold. The revenue generated from the subscription service can then be used for other things, and in Palm's case, those other things will be ongoing R&D efforts leading to improvements to the phone.

For Pre owners, this means they, like iPhone and iPhone 3G owners, can expect to receive free software updates for as long as they have the phone under contract. (This is also why iPod Touch owners have to pay for their updates.) In other words, whatever the Pre looks like upon launch, it's only going to get better.

Not Just One Handset: More WebOS Phones Coming

Another interesting note from these new documents is the fact that, when referring to these promised updates, Palm didn't just say they were for the Pre. Instead, the documents state that the free updates will be for "customers of its webOS products, including the recently announced Palm Pre."

That statement points towards Palm's intentions to build an entire product line built on the webOS - something that was basically confirmed Thursday when, on a conference call with analysts, Palm Chief Executive Edward Colligan promised that a road map of smartphones and an entire application ecosystem was in the company's future.

This is where Palm differs from Apple. Apple built one software base and installed it on one handset, albeit one that has seen hardware upgrades over time (i.e. iPhone to iPhone 3G). Palm, however, is envisioning a software product line that can extend itself across a variety of handsets. For customers, this means more choice when it comes to handsets. And for Palm, they hope this ecosystem will return the company to financial stability - just like they had back when Treos ruled.

If Palm fumbles in any way, it could be the end for their company. Let's hope that's not the case. Anticipation for the Pre is high - all Palm has to do is deliver.

Comment from Mike Nayyar on 2009-03-20

2009-03-20T14:13:15Z

The mobile wars over the next 3 years are going to be kick ass.

Comment from Bec Rowe @d0tski on 2009-03-20

2009-03-20T14:15:24Z

*huggles teh berry*

Comment from Daniel Woolstencroft on 2009-03-20

2009-03-20T14:24:23Z

"This is where Palm differs from Apple. Apple built one software base and installed it on one handset"

I disagree - Apple haven't constrained themselves to one handset at all. The operating system is unix based, therefor could be ported to any future platform. Indeed, if Apple release the much fabled iTablet, I'm almost certain it will run on the same "software base" that the iPhone does, albeit with different drivers.

The only difference between Apple and Palm here is that Palm are ADMITTING that they're planning future devices. Assuming they've got the resources to do it. Apple are almost certainly planning future devices, almost certainly have the resources, but would never admit it until they've got something to show people.

Comment from Sarah Perez on 2009-03-20

2009-03-20T14:26:45Z

@Daniel: Good point - Apple would never tell us their future plans. However, an Apple tablet is still just speculation at this point. Let's just say this is how they differ "for now"....

Comment from Eğitişim Kariyer Enstitüsü on 2009-03-20

2009-03-20T15:37:08Z

İt does not attract us to buy for iphone.

Comment from vigosshong on 2009-03-20

2009-03-20T15:50:57Z

The only difference between Apple and Palm here is that Palm are ADMITTING that they're planning future devices.

Comment from Larry Crain on 2009-03-20

2009-03-20T15:52:52Z

"Apple built one software base and installed it on one handset..."

Two words: "iPod Touch". Apple has sold 17 million iPhone and iPhone 3G handsets... but it's also sold another 13 Million of the first and second gen iPod Touch. Within two years, I expect that the iPod "handset" will significantly outsell the phone version.

Comment from iphonerulez on 2009-03-20

2009-03-20T17:07:45Z

Palm has built one or two prototype Pres. Other than that, the Pre is basically vaporware. The Pre was only built with the intention of getting Palm to be bought out by another company that believes the Pre has a chance of selling in large numbers. Palm, the company, is barely afloat due to lack of incoming revenue. They'd be lucky if they could pull enough cash together to put a 100,000 units into production. The rest of their handset business is nearly down the tubes. Plunging sales and profits have just about put the final nail in Palm's coffin. It's very difficult for a company such as Palm to get financing in these poor economic times.

The carrier, Sprint, that the Pre is supposed to debut on, is in even worse shape. Even combined, they stand very little chance of providing any market penetration. So even though the prototype Pre is a handsome little device, there is just the hard fact of finance stopping the production Pre of ever seeing the light of day.

So all of your visions of seeing the Palm Pre "kill" the iPhone are just dreams. The Pre hasn't even been born yet. It's just a tiny seed of hope sitting in the womb of Palm's marketing hype.

Comment from Sarah on 2009-03-20

2009-03-20T17:51:32Z

@Larry: keyword = "handset"

iPod Touch, while awesome, is not a handset.

Comment from Troy on 2009-03-20

2009-03-20T18:39:45Z

@iphonerulz

I for one will be switching from the iPhone to the Pre. Why? Because AT&T's customer support sucks and their network is even worse.

Comment from mark on 2009-03-20

2009-03-21T00:21:07Z

Why does handset = phone?

Palm used to make devices other than phones, so why wouldn't their use of the word handset not also include WebOS on non-phone devices?

Comment from Cyril on 2009-03-20

2009-03-21T00:38:48Z

I think there is some confusion about the Palm revenue model. Revenue from the device sales will be amortized and recognized over a 24 month period from the sales date. Palm will not "account for device sales immediately" as the post states. Similar amortization treatment will be given to cost of goods sold (e.g. electronics, plastic case, manufacturing costs...) On the other hand, R&D and other costs will be reported at the time they incur. There's no such thing as subscription fees or amortization of engineering costs as the post states.

This is the same model that Apple uses, as the post correctly states. The reason for this accounting model is to allow the company to provide (software) upgrades to already shipped devices free of charge.

Comment from JS on 2009-03-20

2009-03-21T03:04:42Z

Apple is systematically building a platform...the rest are just building a phone & all the usual idiots are whining about cut & paste. Meanwhile Apple has (in 3.0) given hardware manufacturers the ability to build devices that can be controlled remotely with an iPhone or an iPod touch. This is going to be huge. Web OS? Apple would just have to add a layer for widgets which already exists on OSX...which is what powers the iPhone.

Comment from JS on 2009-03-20

2009-03-21T03:51:09Z

http://www.roughlydrafted.com/2009/03/19/iphone-demonstrated-as-a-wiimote-at-igames-summit/

.....but, but, they only just added copy & paste. The tech media is lost.

More choice? Who says Apple is not going to build an iPod touch tablet or other device. Apple actually has a platform. What exactly does Palm have? A phone that can run web applications...less than iPhone 1.0. How exactly do they offer more choice for consumer if Palm is making all the devices? When Apple does this it is always portrayed as a lack of choice. There seems to be a double standard here. iPhone 1.0 could run web apps...now it is a big deal that Palm is doing it 2 to 3 years later? As mentioned above Apple already has widgets & have had them for some time. The tech media is a joke.

Comment from Kontra on 2009-03-21

2009-03-21T09:01:23Z

The chattering class has a fetishistic indulgence with smartphones bordering on techno-porn.
[...]
While analysts and competitors were busy making feature-level comparisons (of mostly hardware), Apple consolidated its platform lead and laid the foundations of a new growth engine the likes of which the mobile industry has neither yet seen nor fully comprehends.
[...]
While [the iPhone OS 3.0] garnered a collective yawn from the features-fetishists, barring a product introduction disaster, the iPhone OS 3.0 will do to iPhone-killers what it did do to iPod-killers half a decade ago. Apple consolidated its gains, marked its territory of 30M users+25K apps+800M downloads and built a very deep and wide moat around it. A moat so formidable that there’s not a single smartphone player capable of overcoming it.
[...]
By the end of 2009, we expect the virtuous cycle to kick in and the moat strategy to reveal just how difficult it will be to compete with Apple’s touch platform, thereby ushering in consolidation in the rest of the smartphone industry.

iPhone">http://counternotions.com/2009/03/19/moat/">iPhone OS 3: The moat strategy vs. features-fetishism

Comment from Kontra on 2009-03-21

2009-03-21T09:02:27Z

iPhone OS 3: The moat strategy vs. features-fetishism

Comment from Marin on 2009-03-21

2009-03-21T19:30:50Z

Am I the only one hoping we don't see an Apple tablet/jumbo iPod Touch until the OS can do background processing?

Comment from Splint on 2009-03-21

2009-03-21T19:42:39Z

Am I the only one hoping we don't see an Apple tablet/jumbo iPod Touch until the OS can do background processing?

The iPhone has always performed multitasking, that’s why you can receive text messages and calls while playing a game as the iPod app also plays music. It just doesn’t allow third parties to install background software for practical reasons, not some technical deficiency.

Comment from george on 2009-03-21

2009-03-22T00:08:42Z

Am a user of Iphone

and i love it

Comment from Sie on 2009-03-21

2009-03-22T00:12:04Z

I PREFER iPHONE than blackberry

Comment from sohbet on 2009-03-22

2009-03-22T12:05:23Z

thank you

Comment from Walt French on 2009-03-22

2009-03-22T19:36:04Z

This is where Palm differs from Apple... Palm, however, is envisioning a software product line that can extend itself across a variety of handsets.

So if I understand this correctly, Apple has told the author that it will only ever offer a single handset-sized device at a time. The iPod Touch is really just an iPhone, folks. Without the phone. Rumors of tablets, netbooks cannot possibly be true.

Is this supposed to make sense?

Comment from ex2bot on 2009-03-22

2009-03-22T20:10:38Z

I love the bullet points and SUB bullet points. That's classy and such effective communication. *

* Sarcasm

Bot
Sometimes Sarcastic Mac Fanbot

Comment from lrd on 2009-03-22

2009-03-22T22:49:28Z

Dude-

My only questions about this iPhone killer is when is it going to go on sale? Right now there are 12 million peopled laid off. Will the Pre come out before another 12 million are laid?

Comment from KenC on 2009-03-22

2009-03-23T04:53:12Z

Hmmm...devices, let's see, Palm doesn't just sell cellphones. They sell other devices like a PDA, and they tried to float a Foleo, a notebook companion thingy. Are you going to tell me that they aren't going to stick WebOS on future PDAs and Foleo-type devices, and that they are only referring to cellphones?

As for Apple, they had two devices that both had to be cleared by the FCC, the EDGE iPhone and now the 3G iPhone, and if Palm can stick WebOS on PDAs and Foleo-type devices, then surely the iPod touch qualifies as a device, and we've seen two generations of that, as well.

So, I'm totally missing what Sarah is getting at with differentiating what Palm let slip, and what Apple is doing. Why wouldn't Apple put their mobile OS X on multiple devices? They already have.

Comment from gta02:) on 2009-03-25

2009-03-25T16:32:20Z

I find it strange that there has been no mention of the openmoko freerunner on this site. Certainly it is not a rival to the iphone and may never be, but surely it is as relevant as the palm "pah_lm". Although I find it strange neither is there mention of CentOS here, go figure.

Comment from Ricky on 2009-04-07

2009-04-07T08:18:26Z

sprint really betting big time with the pre, but they didn't do so well with the instinct when spent $200 million on promoting it.

Sprint is famous for spending big bucks on advertisements, but i seriously hope they will do well, at least folks at http://www.PalmPreForum.org spent sleepless nights try to find out the lastest and greatest info about the Pre!

Comment from fjpoblam on 2009-06-07

2009-06-08T02:57:07Z

iPhone or Palm Pre [or Android or ...whatever...] which is better? Makes no never mind to me! The more, the merrier! Let the heartache begin! Competion! Lust! Gimme one of each! [So long as I don't have to pay the bills, of course...]

Comment from Garance on 2009-06-08

2009-06-08T21:05:11Z

"This is where Palm differs from Apple. Apple built one software base and installed it on one handset, albeit one that has seen hardware upgrades over time"

Please note that the OS used on the iPhone is a stripped-down version of MacOS 10. When programmers write apps for the iPhone SDK, they do it using the exact same developer tools which are used to write a MacOS app. It would be odd to think that this OS which is running on desktops, laptops, and iPhones would never show up on devices which would be somewhere between a laptop and an iphone.

The only question for any such mythical devices is whether they'd get the stripped-down OS of the iPhone, or the full-fledged OS that comes with a Macbook.

Comment from chat on 2009-07-05

2009-07-05T10:37:01Z

BEDAVA