Motorola vs. Palm: Right and Wrong

Late last week the NY Times published an article on the diverging fates of Motorola and Palm: Palm failed, Motorola has thus far apparently succeeded. The success factor? Android, says the piece: 

On Wednesday, Hewlett-Packard, the PC giant, announced it would buy the loss-ridden Palm and use its technology across a range of H.P. devices. On Thursday, the similarly loss-ridden Motorola, however, announced it made an unexpected profit during its first quarter, beating Wall Street expectations . . . The reason for the different outcomes, in a word, may be Android, Google’s operating system for mobile devices.

Perhaps. While adopting Android may have sped Palm's time to market or enabled it to diversify in a way, Palm screwed up on a number of fronts:

  • While WebOS is a powerful mobile OS, it's "expression" in the Pre in particular is underwhelming. 
  • Palm underestimated the importance of apps and developers and launched with a paucity of apps, making the device far less appealing on that front than the iPhone or Android.
  • It launched with Sprint when it should have launched with Verizon

HP suggested that the reason for Palm's lackluster performance was the Palm brand itself. That's pure spin, however.

The Pre was partly dragged down by Sprint's tarnished brand, though the carrier did spend marketing dollars on the Pre trying to position it as an "iPhone killer." The problem there was that it simply wasn't competitive with the iPhone and so the advertising just didn't ring true. It should have been priced more aggressively and positioned differently. But the user experience itself was not optimal overall. 

Motorola's Droid has succeeded in part because of Android and the fact that it's a strong though not great phone. But perhaps more importantly, Verizon put millions behind marketing it in an effort to combat AT&T and the iPhone. Motorola is unlikely to get such a gift in the future and the "Droid Does" campaign will end if/when the iPhone comes to Verizon, which some anticipate will be in June. 

If Apple fails to deliver a Verizon iPhone in June it will be a massive strategic blunder for Cupertino. However if it does come through as promised, Android's reign at Verizon will have ended and so will the anti-iPhone marketing that has driven its success. 

Accordingly it's premature to declare Motorola a success with Android. It will be fending off HTC, Samsung, Dell and others in the very near future and its handsets could well get lost in the blizzard of all the Android releases. 

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Related: Apple now largest US-based maketer of handsets, Motorola number two